NERA Economic Consulting Releases 2009 Securities Class Action Litigation Trends Study

NERA Economic Consulting Releases 2009 Securities Class Action Litigation Trends Study

On December 15, 2009, NERA Economic Consulting released its annual study of securities class action litigation trends. The study, entitled "Recent Trends in Securities Class Action Litigation: 2009 Year-End Update," and written by my friends Stephanie Plancich and Svetlana Starykh, can be found here. The study concludes that, notwithstanding the decline in credit crisis related filings in the second half of 2009, the projected year-end filing levels will be within historical norms. Average and median securities class action settlements are also consistent with recent trends.
 
According to the study, credit crisis related filings, which predominated class action filings during 2007 and 2008, "gradually declined" as 2009 progressed. Despite this decline, the total number of securities suit filings has not dropped off, "as other types of cases replaced credit crisis filings."
 
Based on NERA’s own counting methodology (which, as is explained in footnote 2 of the report, counts separate filings in separate circuits as separate lawsuits until the cases are consolidated), NERA counted 215 securities class action lawsuit filings through November 30, 2009, which projects to 235 filings by year end. Though the projected total of 235 would be below the 2008 level of 253 filings, it is well within the 1997-2004 average of 231 annual filings.
 
Although the 2009 filing levels look as if they will fall within historical levels, the 2009 filings were swollen by at least a several phenomena that may be short lived. Thus, for example, 36 of the 2009 filings involve Ponzi schemes. Though there may continue to be Ponzi scheme revelations as we head into 2010, it does seem likely that there may be fewer of those stories ahead.
 
Read the entire article at The D&O Diary, “a periodic journal containing items of interest from the world of directors’ and officers’ liability, with occasional commentary,” authored by Kevin LaCroix, a Partner in OakBridge Insurance Services, Beachwood, Ohio. OakBridge is an insurance intermediary focused exclusively on management liability issues. Kevin has been involved in directors’ and officers’ liability insurance issues for over 25 years. He began his career as a coverage attorney and partner at the Washington, D.C law firm of Ross, Dixon and Bell.  Contact Kevin LaCroix at OakBridge Insurance Services, 2000 Auburn Drive, Suite 200, Beachwood, OH 44122, (216) 378-7817 or klacroix@oakbridgeins.com.

[This blog post originally appeared in the Corporate & Securities Blog of the Corporate and Securities Law Center.]