Corporate & Securities Law

Woes in US forewarn of ?f-cubed Americana?

By Werner R. Kranenburg

(Subscribe) How long will it take for a US pension fund to be appointed lead plaintiff against a US company in a euro-class action? That was the question that came to mind reading an article in the Wall Street Journal today, entitled Adding to Woes of U.S. Stocks, Pension Funds Are Pulling Back. The article details US pension funds offloading billions of dollars in US equities in favour of investing outside the US.

From the article: “Among the funds that are part of this trend: the New York State Teachers’ Retirement System, the New York State Common Retirement Fund, the Teacher Retirement System of Texas and the Florida Retirement System Pension Plan. Collectively, these plans control more than $500 billion in assets.”

California Public Employees’ Retirement System (Calpers, US$250 billion in assets) may “reduce its U.S. stock position to 24%, from 40% of its portfolio, which would represent the fund’s lowest allocation to U.S. stocks in more than 20 years. […] The New York State Teachers’ Retirement System, with $100 billion in assets, also disclosed plans to cut its target rate for U.S. stocks to 46% from 51%.”

Follow all that money (and experience of the US legal system) and add two elements to the mix, namely the emergence of class action legislation across the EU and the increase in the number of US listings on EU exchanges. Cases are being added to the ‘f-cubed’ list, ‘foreigners’ (i.e. non-US entities) suing fellow foreigners in US fora, the reverse, a first ‘f-cubed Americana’ action might well be a logical next step. You read it here first.

Full post as published by With Vigour and Zeal on November 28, 2007 (boomark / email).