Securities Litigation Trends Climbing

NU Online News Service, Aug 26, 11:11 a.m.EDT?The overall dollar value of securities litigationsettlements appears to be on pace to equal or exceed the levelreported last year, with settlements totaling $1.5 billion so farthis year, according to a PricewaterhouseCoopers analysis.

In a report released by the New York office of the professionalservices firm late last week, PricewaterhouseCoopers identified 60settlements in the first seven months of 2003, totaling $1.5billion.

For all of 2002, the total value of the 107 settlements in 2002was roughly $2.1 billion, according to the analysis.

For the first seven months of this year, the average settlementvalue for the 60 cases equaled $25.1 million, with a number ofextremely large settlements?over $50 million?included in the mix.In 2002, the average settlement value was $19.9 million?up 12percent over the average settlement value in 2001 and up by 40percent over the average settlement value for the years 1996through 2000

The number of settlements over $10 million remains high, with 18cases above that threshold recorded in the first seven months of2003, PricewaterhouseCoopers found. In 2002, the firm said that 40settlements valued at $10 million or greater were a record numberfor an annual period.

Turning to the frequency of securities litigation filings, PWCsaid that the rate of filings in the United States declinedapproximately 21 percent for the seven-month period ending July 31,2003. Noting that a total of 111 shareholder class actions werefiled during the period, PWC estimated that there could be roughly190 filings for all of 2003.

In 2002, the total volume of securities litigation cases was217, PWC said.

Breaking down the figures on filings, PWC said that only a dozenFortune 500 companies have been named in securities cases thisyear, while 60 Fortune 500 companies were named in 2002.

PWC also noted that while the trend of case filings againsttelecommunications companies has reversed, health services andpharmaceuticals companies are being targeted in more cases.

In the past two years, telecommunications companies were themost frequently sued in securities class action lawsuits, but onlythree telecoms have been sued so far in 2003.

Securities litigation cases for companies in health servicestotaled nine in the first seven months of 2003, compared with 10cases in the full year of 2002, while lawsuits againstpharmaceutical companies totaled 15 so far in 2003, compared to 22in 2003.

Cases in the utilities sector also appear to be dropping offwith only five utility, energy, or oil and gas companies being suedin the 2003. In 2002, the total was 26.

Securities litigation cases involving foreign companies listedon US stock exchanges ("foreign registrants") totaled seven in thefirst seven months of 2003, compared to an all-time record of 22foreign registrants named in class action lawsuits for the entireyear in 2002.

The 2002 Securities Litigation Study is available online athttp://www.10b5.com/