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U.S. securities litigation activity sets new precedent in 2010: Advisen


January 21, 2011   by Canadian Underwriter


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Last year saw 1,196 securities law suits filed, a new record edging out 2009’s 1,171 suits filed, reported Advisen.

“No one event accounted for the record level of securities suits filed in 2010,” said John W. Molka III, the author of Advisen’s report.

“To the contrary, the year was characterized by diversity. The most significant trend was the continued growth of suits filed in both federal and state courts alleging breach of fiduciary duties by company directors. They type of suit is typically filed as a result of a merger or acquisition.”

The Deepwater Horizon oil spill also drove litigation, Advisen noted.

While the total number of securities-related suits increased in 2010, the number of securities class action suits fell sharply: 193 as compared to 233 in 2009.

Securities class action suits accounted for more than one-third of securities suits filed prior to 2006, but represented only 16% of the 2010 total.

Securities fraud suits, a category defined by Advisen to consist principally of suits brought by regulators and law enforcement agencies, made up 34% of the total.

Breach of fiduciary duties suits were a close second with 33% of all securities suits filed in the year, and led all other categories of suits by 2010 Q4.