Insurance company Ageas (f/k/a Fortis) to pay foundation representing 180+ institutional investors from U.S. and Europe; claims stemmed from Fortis’ 2007 acquisition of ABN Amro bank; U.S. law firm Grant & Eisenhofer represents pension plans and other investors operating as SICAF in milestone settlement
Today a Dutch appeals court officially approved the largest securities settlement ever reached in Europe, clearing the way for international insurance company Ageas N.V./S.A. to begin payment of $1.5 billion (€1.3 billion) to multiple groups of institutional and individual investors from Europe and the United States.
The ruling was issued by the Amsterdam Court of Appeals, following seven years of litigation in the Dutch courts. The approved settlement resolves four separate cases brought against Ageas (formerly known as Fortis) by various investor claimant groups. The lawsuit of one of the claimant groups, the foundation Stichting Investor Claims Against Fortis (SICAF), had over 180 participating institutional investors holding more than 80 million shares. They are represented by U.S. law firm Grant & Eisenhofer and its co-counsel, Kessler Topaz Meltzer & Check, LLP and DRRT, Inc.
The settlement resolves all claims in connection with the litigation arising out of the 2007 record-breaking acquisition of Dutch bank ABN Amro by Fortis, at the time a Dutch-Belgian financial services company.
The claims, first filed in 2011, concerned the bank’s financial health and the value of its holdings tied to subprime mortgage securities in the United States, issued prior to the 2008 financial crisis. Between 2007 and 2008, the value of Fortis shareholders were largely wiped out as the price of the bank’s securities plunged, requiring the governments of Belgium, Luxembourg and the Netherlands to bail out Fortis and nationalize it in September 2008.
In approving the settlement today, the Court of Appeals declared it binding on all similarly situated claimants pursuant to the WCAM, the Dutch settlement statute for mass damages.
Jay Eisenhofer, managing director at Grant & Eisenhofer, stated: “The 2007-2008 episode involved the company’s previous management. We recognize that Ageas is a different company now, and we’re glad that new management has decided to put this matter behind it. We are proud to have played a lead role in the largest record investor recovery in Europe to date.”
Mr. Eisenhofer further noted that the settlement represents an unprecedented result that exceeds all but a few securities class action settlements in the United States, and is the result of years of litigation and months of mediation. “It is also the first among investment dispute settlements under the WCAM that stood on its own and did not build upon a prior settlement of U.S. litigation,” he said.
Olav Haazen, who led the settlement negotiations for Grant & Eisenhofer, noted that although there is no traditional U.S.-style class action mechanism in European courts, the application of the WCAM in the Fortis case resulted in a “class-like settlement” for investors similar to U.S. cases. All eligible shareholders will be entitled to compensation, and investors who chose to actively pursue litigation, through Grant & Eisenhofer or other organizations, will receive a 25% premium over absent class members.
Noteworthy is also that in addition to the litigating shareholders “absent” Fortis shareholders who did not participate will still receive compensation—a relatively rare achievement in European mass tort litigation. “We are pleased that the Amsterdam Court of Appeals has approved this historic settlement, which will provide meaningful collective recovery for shareholders across Europe and the United States who suffered massive losses in connection with the Fortis bailout during the financial crisis,” Mr. Haazen said.
Grant & Eisenhofer has pioneered pursuing shareholder claims in Europe via the WCAM paradigm, and is currently involved in a number of international shareholder actions there. The Fortis settlement exceeds two previous record shareholder settlements in Europe with which Grant & Eisenhofer was closely involved. One was the Royal Bank of Scotland case, in which Grant & Eisenhofer worked with a number of institutional investors to achieve a $1.1 billion settlement against the Bank in 2016, the second-largest recovery on record in the U.K. The other, in the Royal Dutch/Shell Transport case, Grant & Eisenhofer represented more than 175 European institutional investors in a 2007 settlement with Royal Dutch Shell valued at approximately $450 million – which was, at that time, the largest securities fraud settlement in Europe. Like the Fortis settlement, the Royal Dutch Shell settlement provided recovery to shareholders through the WCAM statute.
Sunak to use budget to expand apprenticeships in England
LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.
Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.
The scheme will extended by six months until the end of September, the finance ministry said.
Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.
Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.
Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.
“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.
(Reporting by Andy Bruce, editing by David Milliken)
UK seeks G7 consensus on digital competition after Facebook blackout
LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.
Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.
“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.
“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”
Dowden said recent events had strengthened his view that digital markets did not currently function properly.
He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.
“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.
Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.
“Nick strongly agreed with the Secretary of Stateâ€™s (Dowden’s) assertion that the governmentâ€™s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.
Britain will host a meeting of G7 leaders in June.
It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.
The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.
Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.
(Reporting by William James; Editing by Gareth Jones and John Stonestreet)
Britain to offer fast-track visas to bolster fintechs after Brexit
By Huw Jones
LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.
Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.
“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.
Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.
Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.
The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.
It also recommends more flexible listing rules for fintechs to catch up with New York.
“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.
“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)
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