Investors each year have lost an average of $39 billion from securities class action lawsuits to collect only about $5 billion in settlements per year since the enactment of the Private Securities Litigation Reform Act in 1995, according to a U.S. Chamber Institute for Legal Reform (ILR) study released Friday.
During the past 18 years, the suits cost shareholders at least $701 billion, while they only recovered about $90 billion, says “Economic Consequences: The Real Costs of U.S. Securities Class Action Litigation” [PDF], the analysis Navigant Consulting Inc. conducted for the ILR. Plaintiffs lawyers in securities class actions during the 18-year period took in fees of $19 billion, an average of about $1 billion per year.
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