July 30, 2009

NERA Releases Study on "Recent Trends in Securities Class Action Litigation"

NERA Economic Consulting has released a study entitled Recent Trends In Shareholder Class Action Litigation: 2009 Mid-Year Update. The study reaches the following notable conclusions:

(1) There have been 127 cases filed in the first half of 2009, on pace for over 250 for the full year. As usual, this is a higher number than reported by Cornerstone, presumably due to differences in counting methodology (see footnote 2 of the NERA report).

(2) The credit crisis continues to dominate the landscape, with approximately 67% of the filings in the first half of 2009 naming at least one financial company as a primary defendant or co-defendant (compared to 50% of filings in 2008).

(3) Median settlement values are holding steady at $8 million.

(4) Following the U.S. Supreme Court's decision in Dura on the pleading of loss causation (April 2005), the dismissal rate for resolved claims appears to have slightly increased.

(5) Securities class actions can take a long time to resolve, making it difficult to accurately assess dismissal rates. Interestingly, the study takes one year's filings - the 238 cases filed in 2000 - and reports on their status. The result: 60% settled, 34% dismissed, 6% pending or abandoned.

The press release accompanying the study can be found here.

Posted by Lyle Roberts at July 30, 2009 9:59 PM | TrackBack
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