Securities class action filings were flat, but regulator suits rose sharply
NEW YORK–(BUSINESS WIRE)– Economic turmoil drove a surge in securities lawsuit filings in 2009, according to a new report from Advisen Ltd. The year saw securities lawsuit filings grow at a robust 13 percent rate to 910 suits, eclipsing an already-elevated 2008 at 804 suits. The number of securities class action suits filed was essentially unchanged, with 234 suits filed in 2009 compared to 239 the prior year, while the number of securities fraud suits filed by regulators grew sharply, with a 22 percent increase over 2008.
“Litigators and regulators stayed busy in 2009,” noted John W. Molka III, the author of the report. “The first half of the year was dominated by credit crisis- and Madoff-related lawsuits. Those types of suits fell off sharply in the second half, but plaintiffs’ attorneys had a backlog of other cases waiting to be filed.”
Although securities class action filings were essentially flat as compared to 2008, they decreased as a percentage of all securities suit filed, coming in at about a quarter of the total. That represents a continuation of a downward trend that began in 2005, when securities class action suits represented about half of all securities suits filed.
“Securities class action suits filed in federal courts account for many of the largest settlements, but every year they represent a smaller percentage of the total number of securities suits filed,” explained Dave Bradford, Advisen’s executive vice president. “A growing threat to companies and their directors is escalating enforcement actions and lawsuits by regulators. Also, breach of fiduciary duty suits and other securities suits filed in state courts are on the rise.”
Advisen’s report, Securities Suits Abound in a Harsh 2009, also reviews trends in awards and settlements, and analyzes the factors likely to influence settlement values in the coming years. Sharply higher losses to shareholders in securities class action suits, as measured by Advisen’s Market Cap Impact Metric™, suggest that settlements may be larger for suits filed in 2009, but it is likely that a higher than average percentage of 2009 suits will be dismissed. The report is available at http://corner.advisen.com/reports_topical.html.
On Friday, January 22 at 11am EST, Advisen will host a free one hour webinar, “Review of Securities Litigation 2009 and Expert Views for the Year Ahead.” Panelists are Oakbridge’s Kevin LaCroix, Travelers’s Mark Lamendola, Beecher Carlson’s Jeff Lattmann. Advisen’s Jim Blinn will moderate the panel and John Molka III will present findings from Advisen’s report. Register for this free event at https://www1.gotomeeting.com/register/286180112.
Advisen integrates business information and market data for the commercial insurance industry and maintains critical risk analytics and time-saving workflow tools for over 530 industry leading firms. Through its work for the broadest customer base among information service providers, Advisen delivers actionable information and risk models at a fraction of the cost to have them built internally. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry’s deepest data sets with proprietary analytics and offers insight into risk and insurance that is not available on any other system. Advisen is headquartered in New York. For more information, visit http://www.advisen.com or call +1.212.897.4800 in New York or +44(0)20.7929.5929 in London.
David Bradford, +1-212-897-4776
Source: Advisen Ltd.