As in the past, securities class actions comprised the largest number of filings (67) among the types of securities filings, up from both the prior quarter (53 in Q4 2008) and Q1 2008 (56), and, when collective actions filed outside of the United States (20) are treated as class actions, continued to make up the majority of overall securities cases filed. The jurisdiction with the largest number of suits filed remained the U.S. District Court for the Southern District of New York, with non-US jurisdictions collectively taking the second spot and the Central and Northern Districts of California also making the top five.
The report also noted a rise in the number of suits filed against non-U.S. companies, with much of that increase attributable to suits related to the Madoff situation (and due to Mr. Madoff’s ties to the international market). Madoff-related suits comprised 30% of the securities suits filed in Q1 2009, topping even subprime/credit crisis filings, which totaled only 26% of the filings.
Due to five large settlements in securities fraud suits, totaling approximately $951.8 million, the average settlement in securities fraud suits also increased significantly, though perhaps only temporarily, to $43.4 million from a prior average of approximately $5 million.
During a webinar related to the report, the speakers predicted an increase in the near future in securities suits related to bankruptcies.