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Recent Trends in Securities Class Action Litigation: 2012 Full-Year Review

29 January 2013
By Dr. Renzo Comolli, Svetlana Starykh, and Sukaina Klein et al.

The number of securities class action cases resolved in 2012 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 152 cases were dismissed or settled in 2012, compared to the 244 securities class actions resolved in 2011. Only 93 securities class actions were settled in 2012 -- also a record low since 1996 and a 25% reduction over 2011. For the modest number of cases that were actually settled in 2012, settlement values were near their average level of recent years, up from the relatively low level of 2011. Plaintiffs’ attorneys’ fees, by contrast, have decreased.
 
Filings of securities class actions only slightly declined in 2012, with a total of 207 class actions filed in federal courts last year, compared to the average rate of 221 over the previous five years. The authors also observed a decline in the pace of filings over the course of 2012. Sizeable reductions of credit-crisis litigation and cases with a Chinese company defendant were largely offset by filings of merger objection cases, which accounted for 25% of new filings in 2012.