Advisen Says Corporate and Securities Litigation Up Slightly In First Quarter, But Below Annual Averages

During the first quarter of 2013, new corporate and securities lawsuits and regulatory enforcement actions increased slightly compared to the fourth quarter of 2012 but remained well below annual averages over the last two years, according to a new report from Advisen, the insurance information firm. The April 2013 report, which can be found here, is entitled "D&O Claims Trends: 1Q 2013," notes that "if the first quarter is any indication, it appears that this downward trend may continue throughout 2013."

Reeders reviewing the Advisen report will want to be very careful to note that the report uses its own terminology. In particular, the report uses the term "securities suits" to refer to all categories of corporate and securities litigation. Among the subsets within this larger category of "securities suits" is what the report calls "securities fraud" suits, which as used in the report refers to actions brought by regulatory and enforcement authorities, as well as private securities suits that are not brought as class actions. The category of "securities fraud" suits does not include securities class action lawsuits, which have their own separate category of "securities class action" suits, which part of the larger category of "securities suits." Readers will want to be very attentive to the report's usage of these terms.

According to the report, the first quarter, which traditionally is a busy period for corporate and securities litigation, saw a 40 percent decrease in the number of new corporate and securities lawsuits compared to the first quarter of 2012. Though the activity in 1Q13 was up slightly from the fourth quarter of 2012, the quarterly total of new corporate and securities lawsuits (313) was the third lowest quarterly total since 2009. The leading type of new corporate and securities lawsuits during the first quarter was what the report calls "securities fraud" suits (that is, the regulatory and enforcement actions plus securities suits that are not brought as class actions), which were up 13 percent from the fourth quarter of 2012 but down 33 percent from the 2012 quarterly average.

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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.

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