US-based Labaton Keller Sucharow is opening a London office as securities litigation is expected to be on the rise.
Labaton’s London office will provide a wide range of services, including comprehensive global portfolio monitoring, US and non-US securities litigation, and corporate governance and shareholder rights litigation.
The office will cater to institutional investor clients in the UK and Europe, as well as clients in the US, that are involved in non-US securities litigation.
The London office will work closely with attorneys in Labaton’s New York and Delaware offices, strengthening the firm’s capability to provide complete and seamless legal services to clients.
Labaton’s chair, Christopher Keller, said the expansion “is the next phase of Labaton’s growth strategy”, adding that the firm is “well-positioned to address the dynamic needs of our diverse client base”.
Hanley noted that establishing Labaton’s first office outside the US was an “extraordinary opportunity”.
Increase in securities litigation
Securities litigation has previously been dominated by US class actions and US firms. However, since the landmark Morrison ruling over a decade ago, there has been a steady stream of jurisdictions outside the US implementing their own procedures for collective redress, all of which are relevant to internationally investing institutions.
There have been numerous examples recently where institutions have come together to challenge certain information being withheld from shareholders (Wirecard), allegations of bribery and corruption (Rolls Royce and Glencore) or the withholding of material information to investors (Volkswagen).
And litigation is expected to continue to increase. One of the reasons for the increase in securities litigation could be due to the Financial Conduct Authority’s (FCA) listing regime reform.
According to law firm Herbert Smith Freehills, every market announcement creates a potential trigger for liability under s.90A of the Financial Services and Markets Act (FSMA).
It pointed out that the statements which form the basis of FSMA claims against companies are often the result of a trawl through publications to identify isolated statements which are, in hindsight, asserted to be false or misleading.
It added that the new Class 1 under the FCA’s listing regime will lead to more market announcements and therefore more potential hooks for shareholders to raise s.90A claims.
Caroline Goodman, chief executive officer of Institutional Protection, said the firm is continuing to see an uptick in collective investor litigation across Europe and particularly in the UK.
“We have seen huge growth in litigation funding and a swell in the ranks of law firms bringing group investor claims. Likewise, there is a marked difference in investors’ appetite for bringing group claims and for holding corporate wrongdoing to account,” she said.
“We are expecting plenty more growth, particularly as more opt-in cases across Europe resolve,” she added.
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