While the U.S. is a major market for financial investors across the world, its complex financial laws represent a major hurdle for those looking to invest in the country.
For the New York-based law firm Kirby McInerney LLP, which specializes in complex commercial litigations, that blind spot offers handsome opportunities for business with largely Asian investors who need help to navigate through it.
The main business of the company is representing financial investors with U.S. assets ― securities issued by U.S. firms and foreign firms listed in the U.S. ― who have made losses due to fraudulent or other irregularities such as misinformation by companies to recover their investments.
According to Daniel Hume, Kirby McInerney’s antitrust and securities specialist, U.S. assets often account for as much as 40 percent of large Asian investors’ portfolios. But many remain relatively unaware of ways to recover losses incurred by the fraudulent or other illegal activities of the issuers.
“We found in Asia, very little involvement, especially by big investors. One of the reasons we are coming over here is to try to shed a little light on the subject. To educate people and give some inside information as to what sort of options are available,” Hume said.
“The U.S. is somewhat unique in the world in terms of the legal frame work that is set up to protect investors. There are laws set up investors can use to recover money that they have lost because an issuer commits fraud or did something else wrong,” he said. He added that such legal tools were not common knowledge among U.S. investors as little as 15 years ago and that his company operates within a niche area.
“Our job as lawyers is to make the complex simple, to take these complex tools and make them available to the client who wouldn’t necessarily understand them,” Hume said.
Hume said that an investor cannot foresee all eventualities and is therefore open to risks.
Daniel Hume. (Park Hae-mook/The Korea Herald)
“No matter how good a job you do in terms of research and no matter how good your money managers are, sooner or later you will invest in a company that will give you a loss because something was wrong,” Hume said.
Korea is just one of the Asian markets Kirby McInerney is looking for new opportunities in. According to Hume, the company operates an office in Singapore, through which Singaporean investors are currently seeking recovery of funds from a U.S. investment bank, and other markets such as China are also within Kibry McInerney’s plans.
As for the company’s plans for Korea, Hume said the company is looking to work with Korean investors with interests in the U.S. rather than compete within the Korean legal services market.
“At the moment, there are no plans to work in Korean courts, but that doesn’t mean there will not be plans in the future. This trip is literally putting the toe in the water,” Hume said.
“Ultimately we may get to know some Korean lawyers and partners and find something to do here. The focus is on litigations in the U.S because we think that’s where the greatest opportunities are for Korean investors.”
By Choi He-suk (
cheesuk@heraldcorp.com)