NERA Economic Consulting Releases Semiannual Report on Securities Class Actions: 2012 Settlements and Dismissals of Cases Plummet
New York -- While securities class actions in 2012 continue to be filed apace, the number of cases settled or dismissed has plummeted to record lows, according to NERA Economic Consulting’s report, Flash Update: 2012 Trends in Securities Class Actions, released today.
By year end, 213 securities class actions are expected to have been filed in 2012; in contrast, only 152 securities class actions are expected to have resolved in the same period. This lesser number for resolutions has caused the number of pending cases to increase, bucking a decreasing trend that started in 2004.
Specifically, the number of settlements in 2012 is expected to plummet to 92, which is 31 fewer than last year and the lowest number since 1996 (following the passage of the Private Securities Litigation Reform Act). The number of cases dismissed is expected to decrease even more to 60, which is 63 fewer than last year and the lowest number since 1998. Meanwhile, the number of securities class actions awaiting resolution is expected to increase to 596 by the end of the year.
"There are likely multiple causes for the record decline in the number of cases dismissed or settled in 2012" said NERA Senior Consultant and Trends co-author Dr. Renzo Comolli. "The slow decumulation in the number of cases awaiting resolution, which had been ongoing for years, had left fewer cases to be settled or dismissed this year. That is unlikely to be the whole story, though, because this year’s drop in settlements and dismissals is larger than the previous, recent reduction in the number of pending cases. The data suggest that changes in the legal environment are causing a slowdown in the resolution of cases; one possible contributing factor is that some resolutions may have been delayed while the Supreme Court considers the Amgen case. Whether the slowdown in resolutions is going to be short-lived or long-lived is one of the interesting questions for 2013"
While the number of settlements has declined in 2012, median settlement values reached record highs this year, $11.1 million, marking only the second time since 1996 that the median settlement value has exceeded $10 million.
NERA Securities Class Action Trends Report Series
NERA has been analyzing trends in securities class actions for more than 20 years. Two reports are published per year: a mid-year study and an annual review at year’s end. This year-end study, Flash Update: 2012 Trends in Securities Class Actions, is co-authored by Dr. Renzo Comolli, Dr. Ron Miller, Svetlana Starykh, and Sukaina Klein.
For more details and to read the flash report, visit: www.nera.com/recenttrends.
NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on business and legal issues involving competition, regulation, public policy, strategy, finance, and litigation.
NERA’s clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world’s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.
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