On July 28, 2010, Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse issued the most recent entry in the series of mid-year 2010 securities class action litigation studies. Its report, entitled "Securities Class Action Litigation: 2010 Mid-Year Assessment" can be found here. The related July 28 press release can be found here.
Consistent with the earlier studies that have been released, the Cornerstone study reports that securities class action litigation continued to decline in the first-half of 2010. According to the study, there were 71 class action securities lawsuits in the first six months of 2010, which represents about a 15% decline from the 84 that were filed in the first half of 2009. The 2010 first half filings represent the lowest semiannual total since the first half of 2007. The 71 first half filings annualize to 142, which would be well below the 1997-2009 annual average of 195 filings.
One note about the way that Cornerstone "counts" lawsuits – unlike some of the other securities litigation reports (for example, the NERA Economic Consulting study released yesterday), the Cornerstone report counts all related lawsuits filed against the same defendants as a single lawsuit, even if filed in different judicial districts. This counting protocol helps explain why the Cornerstone tally appears to differ from other published lawsuit counts.
The Cornerstone report attributes the relative decline in class action lawsuit filings to the decline in the number of lawsuits relating to the credit crisis. However, though credit crisis-related lawsuits have declined, companies in the financial services industry remain the most frequently targeted. Health Care and Energy companies experienced a pick up in first half filings as well.
The Cornerstone study reports that the average "lag" between the end of the proposed class period cutoff date and the initial filing date declined in the first half of 2010 compared to recent periods, suggesting that the plaintiffs may be catching up on their lawsuit filing "backlog."
My own prior analysis of the first half securities litigation can be found here. Advisen’s study can be found here. NERA’s study can be found here.