Do RIAs Have a Duty to Recover Class Action Settlements for Their Clients?

In recent years, recovering class action settlements has increasingly been viewed as part of an RIA’s fiduciary responsibility, reflecting a simple idea: identifiable client assets should not be left unclaimed.

At the same time, the Investment Advisers Act of 1940 requires RIAs to act in their clients’ best interests and maintain ongoing oversight of their assets. Recovering settlement proceeds aligns with this responsibility, particularly when those proceeds are identifiable and collectible.

Is Collecting Class Action Settlements an RIA’s Fiduciary Duty?

Under the SEC’s principles-based interpretation of fiduciary duty, collecting eligible class action settlements is widely viewed as part of an RIA’s duty of care. While U.S. securities regulations do not explicitly require settlement recovery, fiduciary obligations are guided by broad principles rather than rigid rules.

RIAs are expected to:

Act in the client’s best interest;
Monitor client accounts and assets;
Exercise reasonable care in portfolio oversight;
Avoid preventable financial harm.

Settlement proceeds represent existing client assets, not speculative opportunities. When eligible recoveries are known or reasonably discoverable, leaving them unclaimed may conflict with fiduciary-care principles.

For this reason, many RIAs and institutional investors increasingly treat recovery as part of portfolio operations infrastructure, similar to dividend collection or corporate-action monitoring.

Does the SEC Require RIAs to Collect Class Action Settlements?

The SEC does not explicitly mandate that RIAs file class action claims for clients. However, SEC fiduciary guidance emphasizes:

Ongoing asset oversight;
Prudent supervision of client accounts;
Acting in the client’s best interest.

This guidance appears in:

SEC Fiduciary Interpretation (Release IA-5248, 2019)
Investment Advisers Act of 1940
SEC Fair Fund framework under Sarbanes-Oxley §308

Within this framework, settlement recovery is often seen as a natural part of asset stewardship, even though it is not formally required. As recovery systems become more automated and accessible, expectations around “reasonable effort” will continue to evolve.

Have RIAs Faced Legal Action for Failing to Recover Settlements?

Yes. Advisers have faced client complaints and legal scrutiny related to missed settlement recoveries.

One commonly referenced case is Mutchka v. Harris, where investors alleged their adviser failed to take reasonable steps to recover settlement funds owed to them. The case highlighted how unclaimed settlements may be interpreted as overlooked client assets, potentially creating fiduciary exposure.

FAQ

What is 11th.com?

11th.com is an AI-driven recovery platform that delivers class action settlements as seamlessly as dividends. Its AI agents continuously scan global markets, courts, and regulatory filings to identify recoveries, match them to investor holdings, file claims, and distribute funds back to investors. The platform is natively integrated with major custodians, TAMPs, and broker-dealers.

How much can I recover?

Recovery amounts vary depending on investment strategy, asset mix, and portfolio turnover. Historically, recovery alpha typically ranges between 3 and 30 basis points annually on portfolio value. These returns are additive and independent of market performance.

How can I submit a claim?

Investors can submit claims manually through claim administrators, a process that is often complex and fragmented. Automated solutions like 11th.com allow investors to connect their portfolios once and automatically collect eligible settlement proceeds. The experience mirrors dividend collection—fully passive, continuous, and operationally seamless.

How does it technologically work?

Proprietary AI agents scan all global markets, courts, dockets and filings, surface every recovery opportunity, match it to holdings, file claims and deposit funds back to investors.

In 2025, $9.3 billion was available to investors through securities class action settlements, SEC Fair Funds, and other regulatory compensation programs.