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Securities fraud suit filings outpace securities class action suit filings


August 5, 2009   by Canadian Underwriter


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The number of securities lawsuits filed in the United States dropped significantly in 2009 Q2 when compared to the first quarter of this year, but the decrease may only represent a temporary lull, reports Advisen.
One hundred and forty securities cases were filed in 2009 Q2, marking a dramatic decrease from the 221 suits filed in the previous quarter, according to Securities Litigation Drops in Q2 2009: An Advisen Quarterly Report.
“There were 37 securities class action suits filed in the second quarter, down from 70 cases the quarter before,” said John W. Molka III. “But the pace has picked up a bit again in July. As has been the case over the past couple of years, companies in the financial sector were especially in the plaintiff bar’s crosshairs.”
Federal securities class action suits still represent a large portion of securities suits against public companies, but they no longer account for the majority of securities suits, researchers noted.
In 2009 Q2, securities fraud suits filed by regulatory and law enforcement agencies were the most frequent type of claim filed, with securities class action suits and fiduciary liabilities suits tied for second, Advisen found.
“The increase in securities and fraud suits is almost certainly a harbringer of things to come,” said David Bradford, executive vice president of Advisen.