Expanding Securities Litigation

Securities class actions are only one of a rapidly multiplying array of securities-related suits that are transforming the D&O insurance market, according to a new report from Advisen. Traditional securities class action suits accounted for less than half of new securities litigation in 2008, while suits alleging common law torts, breach of fiduciary duty and violation of previously rarely-cited securities laws have become more common. Advisen says a competitive and newly energized plaintiffs’ bar is testing the boundaries of securities suits with novel theories of liability and far more complex complaints. As a result defense costs are surging as plaintiffs’ lawyers concoct new strategies to avoid dismissals and to prevent suits from being consolidated. The report examines the legal, economic and political forces at work in securities litigation in 2008 and assesses their impact on the D&O insurance market in 2009 and beyond.  

 

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