Opting out of securities class actions: Why wait?

Abstract

The benefits available to institutional plaintiffs who opt out of securities class litigation have been extolled by legal practitioners and academics alike. Few, however, have cast a light on the lesser-known, but increasingly import­ant, temporal component to this strategy. This paper aims to cure that deficiency by examining the emerging split between circuits over tolling the statute of limitations for plaintiffs who opt out prior to class certification. By examining pre-certification tolling through the lens of a hypothetical California public pension fund, the paper will squarely address the immediate significance this rule bears upon the litigation strategies of institutional investors, and will outline the overwhelming success that can be achieved by properly capitalising on the device.