The London Stock Exchange, with more than 2,000 listed global companies and a market capitalization of around £6 trillion, is one of the world’s largest stock exchanges. Even for the savviest investors, playing the market is inherently risky. But when shareholders lose money from a stock due to corporate malfeasance—rather than simple market fluctuations—they may be able to recover their losses by joining a securities group litigation.
Milberg London’s securities litigation department has the experience and resources to pursue group securities litigation in the UK on behalf of investors. If you purchased shares of a company that’s been implicated in misleading investors, you might qualify for compensation.
History of Securities Litigation in the UK
Since Queen Elizabeth opened the Royal Exchange in 1571, London has been home to a vibrant and successful stock market. Throughout the market’s history there has been a tension between the free-wheeling ambitions of London’s brokers and financiers, and the government’s role to protect innocent market participants. This started with the Parliamentary Act of 1697, which levied heavy penalties on brokers acting without a licence, and culminated in the Financial Services and Markets Act of 2000 (FSMA).
FSMA implements the European Prospectus Directive (EPD) and the European Transparency Directive (ETD). The EPD gives investors a right to compensation when they have lost money as a result of investing pursuant to a prospectus that is misleading or omits necessary facts. The ETD gives investors a right to compensation for losses arising from relying on publications by listed companies (such as annual accounts and interim statements) that dishonestly contain misleading statements or omissions.
Group Security Claims for UK Shareholders
Whilst legislation permitting shareholder group actions has been in place for some time, UK shareholders traditionally pursued their right to compensation via U.S. class actions in U.S. courts. However, a 2010 U.S. Supreme Court decision forced investors in UK listed stocks to pursue their securities claims in UK courts. As a result, there has been a corresponding rise in UK shareholder group securities litigation.
These cases can involve anywhere from hundreds to tens of thousands of claimants seeking financial redress in the millions or even billions of pounds. For example, around 10,000 shareholders brought a collective FSMA action and won compensation from supermarket chain Tesco after the company admitted to overstating it annual profits in 2014, causing the Tesco share price to fall. A similar collective action was brought against Royal Bank of Scotland for allegedly misleading investors about the financial health of RBS just months before it collapsed. The RBS shareholder case settled in 2017 for £200m.
Milberg London Pursues UK Security Claims
Milberg pioneered shareholder class actions in the United States and won some of the biggest securities litigation verdicts and settlements ever recorded, including multi-billion dollar awards against Prudential Insurance, Tyco International, and Nortel Networks. The firm’s work in this area has not only returned significant money to investors, but also promoted meaningful changes in corporate governance.
Milberg is now bringing its resources and experience to bear on securities litigation in the UK. Building on the firm’s long and proud tradition of shareholder justice, Milberg London runs high-value, complex securities litigation on behalf of institutional and personal investors alike. Our team of top-flight, conflict-free commercial litigators has the expertise to secure maximum compensation for investors who lost money in the stock market due to no fault of their own.