NU Online News Service, April 20, 3:23 p.m.EDT

Though the credit crisis has waned, securities suits filedduring first-quarter 2011 appear to point to another record year,says Advisen.

According to Advisen’s quarterly report on securitieslitigation, sponsored by ACE, 2011 could set another all-time highin suit filings, just as 2010 did with 1,293 suits filed.

During the first quarter 362 securities suits were filed, up 47percent from the same quarter in 2010. At an annualized rate of1,448 suits filed, 2011 would be another record-setting year.

“The credit crisis was a watershed event in securitieslitigation,” says John Molka III, the author of the report. Theamount of filings in 2010 and 2011—even though the crisis haseased—may represent a “new normal,” he adds.

New securities fraud suits, filed by regulators and lawenforcement, represented 35 percent of suits filed during the firstquarter. Financial firms and their director and officers are namedas defendants most often, the report says.

However, the “breach-of-fiduciary-duties category has been thereal driver of growth,” says Dave Bradford, Advisen executive vicepresident. “Many of these are so-called merger-objection suits,which typically are filed following the announcement of a merger oracquisition.”

Accounting for 33 percent of suits filed in the first quarter,breach-of-fiduciary-duty suits have grown rapidly as a percentageof all suits filed—from 8 percent in 2004 to 24 percent in 2009,and then 32 percent in 2010.

Information-technology companies were sued for breach offiduciary duty most often, with health-care firms, financial firmsand consumer discretionary firms also receiving lawsuits.

The average settlement of securities suits during the firstquarter was $21.2 million, about the same as all of 2010 ($19.9million). Securities class-action lawsuits continue to account forthe largest awards, with an average $54.6 million during the firstquarter. Though they once made up about a third of all suits filed,class-action lawsuits represented 18 percent of new filings in thefirst quarter, Advisen says.