Canadian Underwriter

Securities lawsuits ramp up even as credit crisis winds down

October 14, 2010   by Canadian Underwriter

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The credit crisis may have abated, but the pace of securities lawsuit filings in the United States has quickened, according to an Advisen report.
The report, sponsored by Ace, notes 284 securities lawsuits have been filed so far in 2010 Q3.
If this pace continues, the number of filings in 2010 will surpass the total of 928 suits filed in 2008. In addition, it will likely draw near to the unprecedented 1,105 new filings in 2009, Advisen reports.
“As litigators moved beyond credit crisis-related suits, 2010 was expected to be a winding-down period, a respite between scandals and legal flashpoints,” the report says.
The number of new filings in 2010 Q1 remained on par with the number of filings in 2007 Q1. But 2010 Q2 and Q3 featured a “robust” number of filings.
Advisen experts attribute the increased number of filings in 2010 Q2 to the Deepwater Horizon oil spill. But the third quarter had no crisis to speak of, yet the filings remain high.
Credit-crisis and Madoff-related new filings have basically dwindled to nil, now representing 20% of all suits filed in 2010 Q3, Advisen reports.
“The raging bull of the year thus far has been breach of fiduciary duty suits, with approximately a third of all new security suit filings in 2010 Q3.”