After a plaintiffs' lawyer active in securities litigationpredicted no letup in filings for 2008, a defense lawyer gave somecrystal-ball predictions about what might be ahead for D&Oinsurers in 2013 at an underwriter's conference last month.

"Rumors of the death of the plaintiffs' bar have been greatlyexaggerated," remarked John Rafferty, vice president of HartfordFinancial Products in Chicago, during the Professional LiabilityUnderwriting Society D&O Symposium, pointing to various reportsshowing an uptick in federal securities class-action filings lastyear.

The increases reversed a nearly two-year decline in filings, thereports said.

In early January, Stanford Law School in Palo Alto, Calif., andCornerstone Research in Boston jointly released an annual report,reporting that federal securities fraud class actions soared 43percent to 166 in 2007 from 116 in 2006, attributing the jump tosubprime issues and stock market volatility.

Offering a different count in late December, New York-based NERAEconomic Consulting projected a big increase as well--up 58 percentto 207 in 2007 from 131 in 2006.

At the PLUS conference, Samuel Rudman, a partner for Coughlin,Stoia, Geller, Rudman & Robbins in New York, said, "I think itwas clear that the decline in 2005 and 2006 was directly related tomarket volatility."

"There were people out there saying there was not as muchfraud," or that Sarbanes-Oxley corporate governance rules wereresponsible for the lower filing counts in those two years, henoted.

"I was saying it has nothing to do with those things. It has todo with market volatility," said the plaintiffs' lawyer, notingthat when the market was relatively stable during 2005 and 2006,public companies didn't see severe stock price reactions to missedearnings reports.

Now, such reports can drive a stock price down 40-to-50 percent,Mr. Rudman said.

The subprime issue has driven market volatility, and thevolatility is what's driving the increase in filings, he said.

"I have been filing cases since the passage of PSLRA--probablymore than anyone else--and my prediction for this year would bethat this will definitely be the busiest year since the passage ofPSLRA," Mr. Rudman said. (PSLRA--the Private Securities LitigationReform Act of 1995--is a federal law that raised pleading standardsand procedural hurdles for bringing securities class actions tofederal court.)

During an earlier PLUS session, Boris Feldman, a partner withWilson Sonsini Goodrich and Rosati in Palo Alto, Calif., whorepresents defendants, predicted that shareholder litigation in thecoming years will emerge around three areas:

o Hedge fund activities.

o Increasing use of clean technologies.

o An explosion of social networking applications on theInternet.

"I don't know in what form hedge fund shareholder litigationwill occur, [but] I don't think litigators have quite caught upwith...the tidal wave of movement [of money] from traditionalinvestment vehicles into hedge funds and private equity," Mr.Feldman said.

"My guess is that five years from now, there will be as manylawyers involved in that as [in] traditional open market publiccompany cases," he predicted.

He also said "there's a lot of money waiting to get into cleantech, or alternative energy," with law firms now formingalternative energy groups.

"The funds investing [in the clean tech sector now] don't reallyknow that much about it," he said, predicting the possibility of abig boom-and-bust cycle that will resemble the "success/failureprofile" of biotech companies that have experienced their fairshare of securities cases.

"You're going to see a lot of money poured in, and manyfailures," he said. "So my guess is five years from now one of thetopics [on the PLUS agenda] will be the first Clean Techshareholder class actions."

Moving to his third prediction, Mr. Feldman said "the wholeworld of social networking now has many start-ups doing Facebookapplications," adding that venture capital firms are starting toswing toward this trend and put a lot of money into these newundertakings.

"The plaintiffs' bar is outstanding at going where the moneyis," he said.