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August 02, 2010 at 08:00 PM
Securities class action law suits dropped dramatically in the first half of 2010, according to the recently released Securities Class Action Filings–2010 Mid-Year Assessment, a semiannual report prepared by the Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research. The report found that the decline in filings is associated with a decrease in credit-crisis-related litigation, which accounted for only eight filings in the first half of 2010 compared with 37 filings in the first half of 2009.
“The securities fraud litigation wave stimulated by the credit crisis now appears to be history,” said Professor Joseph Grundfest, Director of the Stanford Law School Securities Class Action Clearinghouse, in a statement. “We have an inventory of cases waiting to be dismissed, settled, or tried, but to borrow a phrase from the current Gulf oil spill crisis, it seems that this flow has largely been capped.”
John Gould, Senior VP of Cornerstone Research, added in the same statement that in addition to the low level of filings, “what is interesting is the large decrease in the median lag time between the end of the class periods and the filing dates, which may indicate that plaintiffs have caught up with old cases after being inundated with cases involving the credit crisis.”
According to the report, which is available at securities.stanford.edu or cornerstone.com, 71 federal securities class actions were filed in the first half of 2010, a 15.5% decline from the 84 filings in each half of 2009.
The report notes some other key findings:
