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Flash Update: 2012 Trends in Securities Class Actions

11 December 2012
By Dr. Renzo Comolli, Svetlana Starykh, and Sukaina Klein et al.

While securities class actions in 2012 continue to be filed apace, the number of cases settled or dismissed  has plummeted to record lows, according to the latest edition of NERA's semi-annual study. The study draws from more than 20 years of NERA research on case filings and settlements in US securities class actions.

The authors find that, by year end, 213 securities class actions are expected to have been filed in 2012; in contrast, only 152 securities class actions are expected to have resolved in the same period among both those pending resolution at the start of the year and those filed this year. This lesser number for resolutions has caused the number of pending cases to increase, bucking a decreasing trend that started in 2004.

Specifically, the number of settlements in 2012 is expected to plummet to 92, which is 31 fewer than last year and the lowest number since 1996 (following the passage of the Private Securities Litigation Reform Act). The number of cases dismissed is expected to decrease even more to 60, which is 63 fewer than last year and the lowest number since 1998. Meanwhile, the number of securities class actions awaiting resolution is expected to increase to 596 by the end of the year.