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NERA Reports Securities Litigation Outside The United States Generally Increased

The number of actions settled by the SEC in the last fiscal year remained essentially constant, according to a report prepared by NERA Economic Consulting. In contrast, the number of securities class actions filed last year ticked up slightly in the U.S. compared to the prior year (here). Securities litigation in other countries such as Canada, the U.K. and Australia, however, generally increased, according to other NERA reports.


The filing of securities class actions in Canada increased significantly in 2011, continuing a recent trend. In 2011 fifteen new cases were filed, compared to ten in 2010 and nine in 2009. Indeed, the number filed in 2011 is almost triple the average number of actions brought from 1997 through 2010.

The largest number of cases filed in 2011 were so-called Bill 198 actions. Those relate to the adoption of a continuous disclosure system in late 2005. A number of the new cases involve Chinese issuers. This trend prompted the Ontario Securities Commission to announce in July 2011 that it is conducting a targeted review Canadian issuers with significant operations in emerging markets.

Many Canadian domestic companies also risk being named in securities class actions in the U.S. the report concludes. Those cases almost always involve companies with securities listed on U.S. exchanges. In 2011 five Canadian domiciled companies were named as defendants in six securities class action filings in the U.S., an increase from the three cases filed each year in 2009 and 2010. Since 1997 Canadian domiciled companies have been named as defendants in 74 U.S. securities class actions. Of those cases 28% had a parallel class action filed in Canada. Since Bill 198 was instituted at the end of 2005 however 46% of the U.S. class actions filed against Canadian domiciled companies have had a parallel action filed in Canada.

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For more cutting edge commentary on developing securities issues, visit SEC Actions, a blog by Thomas Gorman.

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