NERA Economic Consulting has issued its report titled: “Recent Trends in Securities Class Action Litigation: 2009 Year-End Update” (the “NERA Year-End Update”). The NERA Year-End Update provides statistics based on information through November 30, 2009. Earlier this month, NERA produced a separate report concerning just the first three quarters of 2009, which we discussed here. Of note in the the NERA Year-End Update, in 2009:
- 215 federal securities class actions were filed. If this pace is maintained through the end of December, NERA projects approximately 235 federal securities class action filings for the year, which is down from 253 in 2008.
- Approximately 30% of the filings are related to the credit crisis (61 cases filed through November 30, 2009), a 10% drop from 2008.
- Approximately 6 of the filings are related to auction rate securities losses, down from 22 in 2008; 36 of the filings are related to ponzi schemes, up from 10 filings in 2008.
- 53% of all filings name a finance sector defendant
- Removing the “outlier” settlements in 2009, the average settlement value for cases settled in 2009 is $42 million, over $10 million higher than in 2008 and significantly above the 2003-2009 $29 million average. The median settlement in 2009 was $9 million, similar to the $9.4 million median settlement in 2007 and $8 million in 2008.
- Median investor losses in 2009 are $363 million, up from $324 million in 2007 and $343 million in 2008; however the ratio of settlements to investor losses has remained relatively stable at approximately 2.5%. NERA predicts that because of the correlation between investor losses and settlement values, the comparatively higher median investor losses for filings in 2008 and 2009, the future settlement amounts for those case might rise as well.
