Many have been victims of fraud such as the Enron and Worldcom scandals
This is the rationale behind the Middle East launch on Monday, September 18 of Institutional Protection Services (IPS).
For the first time, investors from the GCC and the wider Middle East will be able easily to overcome the technical barriers that have until now made it very difficult to collect the money to which they are entitled.
IPS consists of securities, regulatory and IT experts. Its Chairman is Roy Leighton, a highly experienced international business leader, and its Managing Director is Caroline Goodman, formerly Head of International Business Development at the London Stock Exchange.
It has set up a panel of leading international law firms – including the long established Middle East office of Trowers & Hamlins – and other experts to advise investment institutions on how to collect money due to their members or shareholders in respect of existing awards made as a result of US securities class actions.
IPS believes that together its expert team and their legal partners have cracked the problems which have, till now, made it too difficult and costly for Middle East and other international investment funds and institutions to claim their share of the recompense won on behalf of all shareholders in US securities class actions.
The chief obstacles have been that, because of the bewildering number of separate components, the claims process has been:-
• Impenetrably difficult
• Prohibitively expensive
• Lacking transparency
• Not designed to be user-friendly for non-US shareholders – for example, accepting only US zip codes not international post codes, failing to tell international shareholders they have been beneficiaries of a judgment and failing to notify them of the cut-off dates for registering a claim.
Now IPS has perfected a new system which is cost effective – and can be easily integrated into the efficient management of the fund or institution.
The IPS team has previously designed systems which have paid out over $5 billion in international restitution payments worldwide, benefiting over 300,000 claimants – such as a $1.25 billion assets settlement against Swiss banks – valuable experience which they now bring to the service of Middle East investors and financial institutions.
Caroline Goodman, IPS Managing Director, commented:
“This is an overdue service for Middle East investors. At last they can cost-effectively access money due to them because of fraud, false financial forecasting or corporate misgovernance. We are dealing with money already on the table but which international institutions have had difficulty in seeking to access, until now. At most just half of all funds entitled to claim are doing so – so billions go unclaimed – and virtually no Middle east or European funds make claims. There is a real need for a service like IPS to help asset managers to carry out their fiduciary duties and enable their members or shareholders to get what they are eligible to receive. At last Middle East investors will have a level playing field and can recover their missing millions.”
Roy Leighton, Chairman of IPS, added: “The corporate climate is changing. Our aim is to redress the balance in the US system which fails adequately to cater for Middle East and European investors.
“Funds that have equity investments in the US and other international stocks are likely to have money to collect from US securities class action settlements – and even more likely not to be collecting what they are entitled to receive.
“IPS will enable institutions to ensure they are meeting their obligation to collect what is due to them. This is a very positive development for Middle East investors.”
Toby Duthie, one of IPS’ US directors commented:
“Most funds in the US now accept that recouping money from securities class actions is about good governance and is a must rather than an optional extra. This is not about condoning the US system, it’s about getting back what is due – Middle East investors have as much right to these entitlements as their US counterparts”.
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