April 21, 2010

Settlement Week

It was settlement week in the world of securities class actions. No sooner did RiskMetrics release its SCAS 50 for 2009, which ranks plaintiffs firms by their total settlement amounts, when many of the contenders started making bids to be on next year's list.

The SCAS 50 "lists the top 50 plaintiffs' law firms ranked by the total dollar amount of final securities class action settlements occurring in 2009 in which the law firm served as lead or co-lead counsel." At the top of the list is Coughlin Stoia Geller Rudman & Robbins, which brought in $1,580,599,000 on 34 settlements.

Perhaps inspired by the SCAS 50, the rest of the week saw a number of significant settlements in cases both old and (relatively) new.

(1) Tyco International Ltd. and its TyCom subsidiary entered into a preliminary settlement of a securities class action pending in the D. of N.J. The case, originally filed in 2003, stems from a July 2000, $2.2 billion IPO by Tyco of TyComís common stock, and is based on allegations that the registration statement and prospectus relating to the offering contained misstatements and omissions regarding TyComís undersea-cable business. The settlement is for $79 million.

(2) In the HealthSouth securities litigation, the UBS defendants settled with shareholders and bondholders for $217 million and E&Y settled with bondholders for $33.5 million (after settling with shareholders for $109 million last year). The case, originally filed in June 2003, stems from allegations that the defendants materially misrepresented the company's earnings by failing to disclose the impact of certain changes in Medicare reimbursement on the company's profits. According to a Bloomberg article, these are the final settlements in the litigation and bring the total for shareholders to $601 million and for bondholders to $228.5 million.

(3) Charles Schwab Corporation announced the preliminary settlement of the securities class action pending in the N.D. of Cal. The case, originally filed in 2008, relates to Schwab's marketing and sale of a bond fund and was scheduled to go to trial in May. The settlement is for $200 million.

Posted by Lyle Roberts at April 21, 2010 10:29 PM | TrackBack
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