Securities class actions down almost 10 percent
According to a study by Stanford Law School and Cornerstone Research, securities class actions against large American companies are becoming less of a threat.
July 26, 2011 at 06:37 AM
1 minute read
The original version of this story was published on Law.com
According to a study by Stanford Law School and Cornerstone Research, securities class actions against large American companies are becoming less of a threat.
The report found that a total of 94 securities fraud class actions were filed in the first half of 2011, which is nearly 10 percent fewer suits than were filed in the second half of 2010.
Filings against companies in the S&P 500 amounted to 8.5 percent of this year's total, which is the lowest percentage since 2000. Additionally, only one 2011 filing targeted a financial firm in the S&P 500, which is a historic low.
The drop in securities class actions is due to plaintiffs firms focusing on non-traditional filings, such as M&A suits alleging that shareholders were shortchanged. The Wall Street Journal says another factor in the drop of filings against American companies is the increase in securities filings against Chinese companies engaging in reverse mergers, in which private companies merge with public companies to gain access to capital markets.
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