Class-action suits related to SPACs jump: Cornerstone
Reprints
Securities class-action litigation related to special purpose acquisition companies increased more than six-fold in 2021 from 2020, according to a report issued Wednesday.
There were 32 filings last year, compared with five in 2021, according to the report issued by San Francisco-based Cornerstone Research Inc. and the Stanford Law School Securities Class Action Clearinghouse in Stanford, California. Of those 11, or 34%, related to the auto industry, the report said.
There were 17 filings related to COVID-19 in both 2021 and 2020, the report said. There were 11 related to cryptocurrency in 2021, compared with 12 in 2021.
Due in part to reductions in federal merger and acquisition class-action-related filings, overall filing volume fell 35% to 218 in 2021 from 333 in 2020, according to the report. “Core” filings, those excluding M&A filings, fell 15%, to 200, the report said.
Over the past 10 years, M&A filings were dismissed at a rate of 92%, compared with a 48% dismissal rate for core fling, the report said. The settlement rate for core filings was nearly six times the settlement rate for M&A filings.
The percentage of U.S. exchange-listed companies subject to filings decreased for the second straight year for a record high of 8.9% in 2019 to 6.3% in 2020 and 4.2% in 2021, the report said.
Read Next
-
D&O rate pressure continues, SPAC exposures increasing: Allianz
Fresh capacity has brought some stability to the market, but many directors and officers insurance buyers are still seeing rate increases and reduced limits, according to a report published Wednesday by Allianz Global Corporate & Specialty SE.
