FROM: Barbara Hannah, Chief Counsel
SUBJECT: Investments Policy No. 008 (Securities and Antitrust Litigation Policy)
RECOMMENDATION:
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Recommend that the Board approve and adopt updates to Investments Policy No. 008 (Securities and Antitrust Litigation Policy).
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BACKGROUND:
General Policy No. 005 requires periodic review of SBCERA Board policies and indicates that such review shall be conducted every three years. Accordingly, SBCERA staff completed its review of Investments Policy No. 008, which was last approved by the Board on October 3, 2024.
Securities litigation monitoring is an important component of SBCERA’s responsibility to protect SBCERA’s investment assets. As an institutional investor, SBCERA may be eligible to recover losses resulting from securities fraud, antitrust violations, or other misconduct affecting securities in which it has invested. Since these claims may be subject to statutes of limitation, class action filing deadlines, opt-out deadlines, and other procedural requirements, timely and comprehensive monitoring is essential to identify potential claims, preserve SBCERA’s rights, and ensure that SBCERA can evaluate whether participation in a particular matter is warranted and in its best interests.
SBCERA historically has utilized separate service providers for securities litigation monitoring and claims filing, including SBCERA’s custodial bank and law firms. SBCERA’s custodial bank previously performed claims filing services, but has moved away from providing those services directly and now relies on a third-party service provider to perform this function. Rather than maintaining separate arrangements for securities litigation monitoring and claims filing, with the custodial bank relying on a third-party service provider and SBCERA’s existing panel of Financial Recovery Technology (FRT) and law firms providing monitoring services, staff determined that expanding FRT’s scope of services to include claims ...
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