Securities Class Actions On The Upswing In First Half Of Year

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Publish Date:
July 27, 2016
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The Wall Street Journal
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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.

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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