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Sheena Harrison

Securities class actions remain below historical average: Analysis

January 29, 2014 - 2:04pm


The number of federal securities class action lawsuits increased in 2013, but still remained lower than historical averages for such cases, according to an analysis by Cornerstone Research Inc. and the Stanford Law School Securities Class Action Clearinghouse.

In a report released Tuesday, Boston-based Cornerstone and Stanford, Calif.-based Stanford found that plaintiffs filed 166 federal securities class action suits in last year, up 9% from 2012.

Still, that number was 13% below the historical annual average of 191 filings for the 1997-2012 period.

The limited filings could be attributed to a declining number of public companies, according to the analysis. It noted that there has been a 46% decrease in companies listed on the New York Stock Exchange and Nasdaq since 1998.

Still, the analysis found there were 150 initial public offerings filed in 2013, a five-year high, that could provide fodder for an increase in securities class action litigation in the future.

“The median market capitalization of companies that were the subject of class actions has declined substantially from $1 billion in 2008 to $637 million in 2013 — a 37% decline in the median value,” according to the research. “Over the same period, the number of IPOs with a market capitalization greater than or equal to the median market capitalization of companies sued in that year increased from four in 2008 to 66x in 2013.”

A copy of the report can be found here.

 



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