Securities Class Action Filings Accelerate

The number of securities class actions filed in the second half of 2010 has accelerated and  filings are  on track to exceed last year’s total, despite a decline in  cases related to the credit crisis.

The just-released annual report from NERA Economic Consulting shows that filings are projected to reach 239 cases by year’s end compared to 220 class action cases filed in 2009.

Filings related to the credit crisis fell 46 percent with only 31 such cases filed through 30 November 2010, compared to 57 filed in 2009, and 103 in 2008.

Another key takeaway from NERA is that the median settlement value hit an all-time high, jumping by more than 30 percent to $11.1 million in 2010 – the first time it has exceeded $10 million.

The decline in filings related to the credit crisis was offset by a resurgence in other types of cases, such as undisclosed product and operational defects, breach of fiduciary duties, and accounting improprieties.

Companies in the finance sector continue to be a target, NERA says, though more than half of the 2010 filings against finance sector companies appear unrelated to the credit crisis.

Check out Kevin LaCroix’s D&O Diary blog for more analysis of the NERA findings.

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