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February 01, 2010 at 02:00 AM
The number of federal securities class action law suits filed in 2009 dropped sharply according to the recently released report, Securities Class Action Filings–2009: A Year in Review, from Cornerstone Research and the Stanford University Law School.
A total of 169 federal securities fraud class actions were filed in 2009, a 24% decline from the 223 filings observed in 2008 and 14% below the annual average between 1997 and 2008. After dominating filings activity in 2008, credit crisis-related filings declined even more dramatically in 2009. “The number of credit crisis filings fell 47% from 100 in 2008 to 53 in 2009, with only 17 credit crisis filings in the second half of the year,” the report states.
Professor Joseph Grundfest of Stanford, a former SEC Commissioner, says that “plaintiffs simply ran out of financial firms to sue,” in 2009. The 2009 filings “were also marked by an unusually long time lag between the alleged wrongdoing and the resulting legal action. This data suggests law firms that represent plaintiffs have been revisiting old cases, particularly in the last half of the year, when the median lag time of 100 days reached three times the historic average.”
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