The Credit Crisis Loosens its Grip on Securities Litigation, Advisen Reports
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Far fewer credit crisis suits, but still a very active third quarter for securities litigation
NEW YORK--(BUSINESS WIRE)-- The third quarter saw a robust 169 new securities lawsuits filed, but the credit crisis is no longer leading the litigation charge. According to Advisen Ltd's quarterly update on securities litigation, Securities Suits Come Back Strong in Q3 2009, the pace of suits filed was up compared to the second quarter, but the number of new suits related to the credit crisis was sharply lower.
"An increase in both securities class action and securities fraud suits drove up the third quarter total," said John Molka III, the report's author. "It's shaping up as a very active year for securities litigation, but the action is moving away from credit crisis suits. Only nine suits were filed in the third quarter, compared to 24 in the second and 46 in the first. "
The 169 suits filed in the third quarter represent an 11 percent increase over the second quarter's total, but still significantly trail the 249 suits filed in the hyperactive first quarter. In addition to suits arising from the credit crisis, the first quarter also saw a flurry of suits against firms tied to the Madoff Ponzi scheme. Similarly, these types of suits dwindled in the third quarter.
Securities fraud suits brought by regulators and law enforcement agencies were the most common type of suit filed during the quarter, followed by securities class action suits. Together, securities fraud suits and securities class actions accounted for nearly three-quarters of the suits filed in the quarter. Shareholder derivative suits and suits filed in state courts alleging breach of fiduciary duties and common law torts made up much of the remainder.
"The third quarter saw a continuation of trends that have been developing over the past several quarters," said Dave Bradford, Advisen's executive vice president. "In particular, securities fraud suits have replaced securities class actions as the most frequently filed type of suit. They probably will grow to an even larger percentage of the total as the Securities and Exchange Commission steps up enforcement activities under the Obama administration."
With this new report, Advisen introduces two new Impact Metrics: Sector Impact Metric(TM) and Market Cap Impact Metric(TM). Both metrics provide deeper insight into the trends affecting securities litigation.
The report is available free of charge at the Advisen Corner; http://corner.advisen.com/reports_topical_securities_quarter3_home.html. A list of the securities suits filed in the quarter also can be purchased from the Advisen Corner.
In conjunction with the release of this report, Advisen will present its third quarterly securities litigation webinar. The webinar, which will be held on Friday, October 16 at 11am EDT, features a panel comprised of the D&O Diary's Kevin LaCroix, Arthur J. Gallagher's Phil Norton, and Zurich's Paul Schiavone, along with Advisen's Dave Bradford. Advisen's Jim Blinn will be the moderator. To register for this free one hour Advisen webinar, go to https://www1.gotomeeting.com/register/843719489.
About Advisen
Advisen integrates business information and market data for the commercial insurance industry and maintains critical risk analytics and time-saving workflow tools for over 530 industry leading firms. Through its work for the broadest customer base among information service providers, Advisen delivers actionable information and risk models at a fraction of the cost to have them built internally. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry's deepest data sets with proprietary analytics and offers insight into risk and insurance that is not available on any other system. Advisen is headquartered in New York. For more information, visit http://www.advisen.com or call +1.212.897.4800 in New York or +44(0)20.7929.5929 in London.
Source: Advisen Ltd.
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