A report issued today by the Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research offers a number of interesting findings about securities class action filings in 2011.
Overall, 188 federal securities class actions were filed in 2011, compared with 176 filings in 2010 and an annual average of 194 filings between 1997 and 2010. However, the mix of cases in 2011 was notable in that a very large percentage of the filings--23%--related to merger and acquisition transactions. While this was also true in 2010, previous years showed little or no M&A cases among federal securities class actions.
In addition, litigation against foreign issuers was much higher than usual in 2011 due to a surge in cases against Chinese issuers. The report states that from 2008 to 2010, the average percent of total filings against foreign issuers was 13.4 percent. In 2011, however, flings against foreign issuers rose to 36.2 percent , with filings against Chinese firms accounting for 41 of the 68 filings against foreign issuers.
Other interesting findings include:
- Approximately one out of every 31 companies in the S&P 500 Index at the beginning of 2011 was a defendant in a class action filed during the year. This was down from prior years--between 2000 and 2010, an average of about one out of every 16 companies in the S&P 500 Index at the beginning of they year was a defendant in a class action filed during the year.
- Plaintiffs' law firm Robbins Geller Rudman & Dowd was named lead or co-lead counsel more often than any other firm from 2009 to 2010.
- A review of 2,415 “classic" securities class actions filings (i.e., excluding IPO Allocation, Analyst, and Mutual Fund filings.) from 1996 to 2011 that have been resolved showed that 75 percent of filings reached a ruling on motion to dismiss. Further breaking down this 75%, 32% were dismissed at that point or subsequently; 35% settled thereafter but before a ruling on summary judgment; and 8% proceeded to a ruling on summary judgment.
The full report ("Securities Class Action Filings—2011 Year in Review") is available here.