A NERA news release said there were 101 securities class actions filed from January to June 2010, which the announcement said put the pace on track to total 202 for the full year. NERA said that would represent a decline from the 221 filings in 2009 and the 248 filings in 2008.
A key factor in the decline of securities class action filings was the dropoff in cases related to the global credit crisis. In the first half of 2010, there were 17 credit crisis cases filed; if the pace of such filings is maintained there will be 34 such cases filed in 2010.
NERA said that would represent a sizeable drop from the 57 credit crisis-related cases filed in 2009 and the 103 filed in 2008.
The consultant said the falloff in credit crisis-related filings was partially offset by an increase in the frequency of other types of suits including cases alleging breaches of fiduciary duty and cases filed against companies in the life sciences and technology sectors. Recent developments such as the BP Gulf of Mexico oil spill also produced new filings.
Also, the median settlement in the first half of 2010 was considerably higher than in any prior year. At $11.8 million, the median settlement exceeded 2009’s value of $9 million by almost one-third, crossing the $10 million mark for the first time, NERA said.
According to the announcement one factor driving the jump in median settlement values was a substantial hike in median investor losses—a variable which correlates strongly with settlement size. Median investor losses in cases settled in the first half of the year were $436 million, the highest level since 1996.
The NERA report is at http://www.nera.com/nera-files/PUB_Mid_Year_Trends_0710.pdf.