FOR IMMEDIATE RELEASE
Contact:
Dave Bradford
Advisen Ltd.
+1.212.897.4776
New Securities Lawsuits Continue to Mount at an Elevated Pace, According to a New Advisen Report, Sponsored by ACE.
The easing of the credit crisis has done little to slow the pace of new securities suit filings.
New York, (Oct. 13, 2010) – New securities lawsuits sparked by the credit crisis have all but disappeared, but the pace of securities lawsuit filings in the third quarter continued at elevated credit crisis-like levels, according to a new report from Advisen Ltd, sponsored by ACE. With 284 suits filed in the third quarter, 2010 is on target to surpass the 2008 total of 928 suits filed and will likely draw near to the unprecedented 1,105 new filings in 2009.
“With the worst of the credit crisis behind us, 2010 was expected to be a comparatively quiet year for securities litigation,” said John W. Molka III, the author of the report. “The year began quietly enough, with 206 suits filed in the first quarter, but the volume of new filings in the second and third quarters has been more typical of the activity we saw in 2008 and 2009.”
The elevated level of new filings in the second quarter was largely attributable to suits arising from the Deepwater Horizon oil spill. The third quarter, however, had no one event that sparked a large number of suits. Financial services companies and their directors and officers were most frequently named in suits, as was the case throughout the credit crisis, but companies in the information technology and healthcare sectors were close behind.
Suits alleging breach of fiduciary duty accounted for over one-third of new filings. These suits, which often are filed in state courts, typically are brought by shareholders of an acquired company claiming that directors and officers sold the company too cheaply. Securities fraud suits, a category defined by Advisen to be comprised principally of suits brought by regulatory and law enforcement agencies, represented 29 percent of the total, while securities class action suits accounted for 20 percent of new filings. Securities class action filings have been decreasing as a percentage of total security lawsuit filings since 2004, but still represent most of the largest settlements: five of the seven largest settlements during the quarter were of securities class action suits.
“The credit crisis may have abated, but securities lawyers aren’t taking a break,” said Dave Bradford, Advisen’s Executive Vice President. “They are filing fewer securities class action suits, but more suits alleging breach of fiduciary duty. The pace of mergers and acquisitions should pick up as the economy improves, which probably will lead to even more breach of fiduciary duty suits in the coming year.”
The report, “Securities Litigation Remains Escalated,” sponsored by ACE, can be downloaded for no charge at the Advisen Corner Store, http://corner.advisen.com/reports_topical_Q3_2010_ACE_blurb.html.
On Friday, October 15, at 11 am EDT, join a panel including ACE's Steven Carabases, Adam Savett of the Claims Compensation Bureau, the D&O Diary's Kevin LaCroix and Advisen's John Molka to review Securities Litigation cases filed and settled during the third quarter of 2010. The session will review Advisen's analysis of third quarter 2010 Securities litigation and settlements and discuss the larger implications for underwriters, brokers and risk managers.
Register for Advisen's Third Quarter Securities Litigation Review Webinar, Sponsored by ACE, on Friday, October 15, at 11 am EDT via:
https://www1.gotomeeting.com/register/138555273
Master Significant Case and Action Database (MSCAd).
Advisen tracks significant lawsuits filed against companies and their directors and officers in MSCAd. MSCAd is the most complete and accurate database of such cases, consisting of over 50,000 events and over $3.9 trillion in aggregate losses. Securities cases in MSCAd represent over 10,000 cases and over $120 billion in aggregate losses.
Advisen’s MSCAd covers a full range of securities cases, categorized by type. Information about suits and filing details are available for purchase at Advisen’s online store, Advisen Corner, at http://corner.advisen.com/reports_topical_sec_normal_home.html and available at no extra charge to Advisen members through their advisen.com logins. For more information please e-mail corner@advisen.com.
About Advisen
Advisen’s data, analytics and news offerings are game-changers for 100,000 commercial P&C professionals. For Underwriters, Reinsurers, Brokers and Risk Managers, the resources of Advisen provide productivity and insight into underwriting, marketing, broking and purchasing commercial insurance. Configurable applications allow Advisen to customize each solution and/or craft special offline delivery, too. Our result is a measurable increase in your book of business and more favorable insurance transactions. Visit us at www.advisen.com or contact support@advisen.com to learn more.
About ACE
For 25 years, ACE has taken on the responsibility of your risks so that you can take on the responsibility of making things happen. We call that insuring progress. To find out how our people, financial strength, world-wide capabilities and flexible approach can work to insure your progress tomorrow, visit acegroup.com today.