Browsing a litigation magazine borrowed from my favorite legal beagle – as a non-lawyer, I’m a little put off even by the idea of a litigation magazine – I ran across a neat online resource from Stanford Law School on shareholder lawsuits.
Stanford’s Securities Class Action Clearinghouse, in collaboration with litigation consultant Cornerstone Research, tracks shareholder lawsuits, reports recent filings and settlements, and slices and dices data on different kinds of cases. The website is like a special cable TV channel: all securities lawsuits, and nothing but.
Professor Joseph Grundfest of Stanford Law and John Gould of Cornerstone offer analysis that will interest many investor relations people and corporate lawyers.
- Not so many securities class actions were filed in 2009, after 2008 gave plaintiffs’ attorneys a robust year via the financial crisis. In 2009, the lawyers just about ran out of financial institutions to sue, and some even went back to file suits based on older issues, Stanford says. The high point was 2001, when the dot com bubble turned into a litigation bubble related to IPO allocations. We’re off to a so-so start in 2010.
- More securities class actions were settled in 2009, on the other hand. This reflects lawsuits filed 3 to 5 years earlier, since it usually takes awhile for both sides to get down to settling. Median settlement was $8 million, but the total was $3.8 billion.
- The biggest settlements tend to involve alleged accounting violations, especially if there is a parallel SEC action. Also, when the plaintiffs are public pension funds rather than individual investors, settlements are typically higher.
- Stanford also provides articles and papers on topics like D&O insurance and litigation outcomes and a page of links to news stories and releases.
So, for those of you who are intrigued – or scared stiff – by securities litigation, happy browsing!