Foreign Institutional Investors Opt-In to U.S. Securities Litigation: In an earlier post (here), I discussed the involvement of foreign institutional investors in U.S.-based securities class actions, and the fact that courts are certifying classes including foreign investors who bought shares overseas, at least foreign investors from countries whose courts it is believed would recognize the U.S. court’s judgment. This class definition necessarily precludes investors from other countries.

As Adam Savett notes on the Securities Litigation Watch blog (here), this process has the “altogether predictable consequence” of encouraging large institutional investors that are excluded from the class definition to file individual or group actions in the United States. In fact, that is exactly what has happened with respect to foreign institutional investors precluded from the class in the Vivendi securities class action. (A copy of the Vivendi class certification decision certifying a class to include only investors from the United States, France, England, and the Netherlands, can be found here.) There have now been over a dozen individual or group actions filed by international institutional investors after having been excluded from the Vivendi class. A copy of one of the group complaints can be found here.

Would-be reformers cite U.S.-style securities litigation as one of the factors undermining the competitiveness of U.S securities markets, on the theory that overseas companies shun the U.S. exchanges to avoid American litigiousness. However, it seems clear that overseas investors find U.S. style litigation attractive. It is not far-fetched to suppose that as overseas investors become habituated to these processes for holding company management accountable, they may come to expect or even demand procedural alternatives in the home countries to hold company management accountable.

The presence of these individual or group actions paralleling the ongoing class case represent but one set of factors testing the continuing utility of securities class action litigation. Another factor is the recently increased prevalence of class action settlement opt-outs (about which refer here). Both of these developments may illustrate growing limitations to class action procedures. While alleged class action abuse has long been a rallying cry for corporate reformers, class actions arguably may be far more preferable than the alternative of massive piecemeal litigation that multiplies litigation costs and complicates efforts toward efficient case resolution.

JDS Uniphase Trial Updates: In an earlier post (here), I noted the significance of the pending securities trial of involving JDS Uniphase and several of its directors and officers. It has proven difficult to follow the trial, but as Lyle Roberts points out on the 10b-5 Daily blog (here), the best way to monitor the trial is on, a motorsports website that is following the trial because former JDS Uniphase CEO Kevin Kalkhoven, one of the trial defendants, is also one of the owners of the Champ Car World Series.

Unfortunatly, the website is confusing and difficult to navigate. I found that the best way to find the reports of the JDS Uniphase trial is to enter a search on Kalkoven’s name in the search box on the left-hand column. The website reports that the parties expect to complete the submission of evidence by November 16, 2007, with argument, instructions and jury deliberations to begin after Thanksgiving.

Wecome Back, Nugget: We here at The D & O Diary were fans of the late, lamented PSLRA Nugget, a securities law blog that went dormant some time ago. Apparently the old blog has been reincarnated and will be reinvigorated as the Acquirelaw Nugget (here). The old Nugget was great, so we are looking forward to seeing regular posts again from the new Nugget.

Speaker’s Corner: On Thursday November 15, 2007, I will be speaking on a panel entitled “Exploring Director & Officer Liability” at the IQPC Securities Litigation Conference in New York. Further information about the conference can be found here.