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Total of new federal class action securities lawsuits declining


Plaintiffs brought 85 new federal class action securities cases in the first half of 2015, which was a decrease from the 92 filed during last year's second half, but class actions filed against both companies headquartered outside the United States, and those filed in federal appeals court in San Francisco increased, says a report.

Twenty filings, or 24% of the total filed in the first half, involved foreign companies, with Asian companies accounting for more than half of those, according to the report issued Thursday by Boston-based Cornerstone Research at the Stanford law School Securities Class Action Clearinghouse in Stanford, California.

Another trend was that filing activity in the 9th U.S. Circuit Court of appeals nearly doubled compared with the second half of 2014, driven in part by increased filings in the technology industry, according to the report. The 38 filings during the first half of this year were the most in a semiannual period since the second half of 2004, according to the report.

The 85 new federal class action securities cases filed in the first half was fewer than the 92 filed during last year's second half, but more than the 78 filed during the comparable period a year ago.

The maximum dollar loss, a measure of the largest amount plaintiffs might seek to recover, was $105 billion, which is 65% below the historical semiannual average maximum dollar loss of $304 million.

Joseph Grundfest, director of the Stanford Law School Securities Class Action Clearinghouse, said in a statement, “Securities class actions continue to percolate at a relatively low level, whether measured by the number of cases filed or the dollar amounts at stake.

“The interesting question is 'why?' Some observers point to high stock price valuations and the lack of volatility in equity markets. Others point to the fact that many of the major accounting scandals now appear to be happening outside the United States. A combination of both factors could well be at work.”