Federal securities class action complants were down in the first half of 2011, according to Securities Class Action Filings—2011 Mid-Year Assessment, released July 26. Although overall activity was down, filings on Chinese reverse mergers and M&A activity rose over the last six months of 2010.
The report, prepared twice a year by the Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research, showed that in the first six months of 2011, 94 federal securities fraud class actions were filed. That is a 9.6% decrease from the second half of 2010, in which 104 filings were recorded.
However, Chinese reverse mergers and M&A activity were up in the first six months of 2011 over the last six months of 2010. In the first half of 2011, 24 filings related to Chinese reverse mergers made up 25.5% of all filings for the period. Despite the fact that, according to the report, Chinese companies tend to have small market capitalizations, as reported by AdvisorOne on Tuesday, Chinese reverse mergers have cost investors some $18 billion.
M&A filings totaled 21 for the period, equaling 22.3% of all filings. Together, the two kinds of activity made up 47.9% of all securities fraud class action complaints filed during the last six months; that is up from 32.7% in the last half of 2010.