Corporate Governance

Class Action Filings Down But Settlement Amounts Up

By Tamar Weinrib

As recently reported on DandODiary.com, NERA and Cornerstone have both recently published their mid-year Securities Litigation Studies. Though conducted differently, the bottom line result of both studies was the same. Securities class action filings are down this year from last year. Notably this decline has been offset by other types of lawsuits, such as breach of fiduciary duty claims and substantial credit crisis state court derivative litigation. Companies in the financial services industry are still the most frequently targeted.

Interestingly, the NERA study also notes that there is an increasing upward trend in median settlement amounts. The median in 1996 was $3.7 million, and only exceeded $6 million once between 1996 and 2004. However, since 2005, the median has exceeded $7 million every year, and the first half 2010 median is more than three times the 1996 median. Click here to access the NERA study and here to access the Cornerstone study.

Full post as published by PomTalk on August 04, 2010 (boomark / email).