Council of Institutional Investors

CII Research and Education Fund

A 501 (c) (3) Organization
The Council of Institutional Investors has established the CII Research and Education Fund (CII-REF) to support and publish white papers, issue briefs and other reports on topics of interest to long-term investors. The fund is a non-partisan, tax-exempt organization under Section 501 (c)(3) of the Internal Revenue Service code. This fund is in addition to CII, which is a 501 (c) (6) organization. The CII Research and Education Fund will focus on educating the public, investors, corporations and policymakers about topical issues in corporate governance, investment, securities litigation, accounting standards and convergence and other areas. For example, CII-REF funds ensure the public availability of detailed data on proxy access provisions, and a CII-REF publication summarizes proxy access provisions.

CII-REF as a Residual Fund Recipient
CII encourages members and other organizations involved in class-action lawsuits to consider requesting that CII or CII-REF be the recipient of residual funds from settlements. Residual funds are monies from a securities class action settlement that are directed by the trial court to be distributed to a non-profit entity instead of to the class because it is too expensive to distribute to the claimants. In securities litigation cases, claimants generally receive their payments in a multi-step distribution process. Through this process, some claimants cannot be located, or those that have been located fail to cash the checks that have been issued to them. Once the vast majority of the funds has been distributed, it becomes economically impractical to continue to make distributions because the cost per class member of distributing the remaining funds exceeds the amount each class member would receive.

When distribution of settlement funds to class members is impractical, the court generally invokes the doctrine of cy pres to distribute class funds to a “next-best” recipient. In early cases involving the cy pres doctrine, courts sought to identify residual fund recipients with interests and purposes aligned with the class. More recently, trial courts have been allowed wide discretion in determining the residual fund recipient.

Under any test, CII or CII-REF would be appropriate recipients of residual funds, particularly in cases where the Council’s values and goals have a significant relationship to the conduct giving rise to the claim and the harm suffered by class members.

How You Can Help
We ask that organizations involved in securities class-action cases consider advocating for CII or CII-REF (if the recipient must be a 501(c)(3)) as the recipient of any residual funds. For more information, please visit our residual claimant filings page.

Members and others interested in supporting the work of the CII Research and Education Fund may contact Amy Borrus.