Summary
Courts have been bustling with securities class actions this year, according to a report out this week from Cornerstone Research.
As the findings show:
There were 119 new federal securities class actions filed in the first half of the year, 27% higher than the half-year average of 94 filings found between 1997 and 2015.
The number of suits involving M&A transactions rose to 24, from recent ranges of five-to-nine in other half-year spans.
Lawsuits targeted 2.5% of all U.S. exchange-listed companies. Biotechnology, pharmaceutical and healthcare companies had the most suits against them, with the financial sector also receiving its fair share.
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Preferred jurisdictions seem to be changing, according to report co-author Joseph Grundfest, a professor at Stanford Law School. With the Delaware Chancery Court’s crackdown over the past year on so-called disclosure only settlements–which give plaintiffs’ lawyers a payday but don’t offer a recovery for shareholders–lawyers are taking suits that typically would have been filed in Delaware to federal courts, the report finds.
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