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

Tue Jul 24 16:24:00 EDT 2012
By Svetlana Starykh et al.

Securities class actions filed in US Federal court continue to be filed at their historical pace in the first half of 2012, but the number of settlements has dropped sharply, according to this edition of NERA's semi-annual study. The study draws from more than 15 years of NERA research on case filings and settlements in securities class actions, and includes data on filings, dismissals, and settlements through 30 June 2012.

The authors find that, through the first half of the year, 116 class actions have been filed; the projected 2012 total of 232 class action filings is in line with the 224 filed in 2011 and the average of 217 class actions filed annually between 1996 and 2011. While filings of class actions have maintained their historical levels, their composition has changed significantly. In 2011, NERA observed a wave of filings against Chinese domiciled companies. In the first half of 2012, cases involving Chinese companies have decreased considerably, with only 10 cases being filed, less than half the 2011 filing rate. Merger objection cases continue to be a major portion of total filings, as they have since 2010.

The authors project that settlements of class actions in 2012 will be at their lowest level since 1999 if the current pace is maintained. Only 49 cases have settled in 2012 through June; the projected full-year total of 98 is down sharply from 128 settlements in 2010 and 123 in 2011.