Securities Litigation Trends Climbing
The overall dollar value of securities litigation settlements appears to be on pace to equal or exceed the level reported last year, with settlements totaling $1.5 billion so far this year, according to a PricewaterhouseCoopers analysis.
In a recent report by the New York office of the professional services firm, PwC identified 60 settlements in the first seven months of 2003, totaling $1.5 billion. For all of 2002, the total value of the 107 settlements in 2002 was roughly $2.1 billion, according to the analysis.
For the first seven months of this year, the average settlement value for the 60 cases equaled $25.1 million. In 2002, the average settlement value was $19.9 million.
The number of settlements over $10 million remains high, with 18 cases above that threshold recorded in the first seven months of 2003, PwC found. In 2002, the firm said that 40 settlements valued at $10 million or greater were a record number for an annual period.
Turning to the frequency of securities litigation filings, PWC said that the rate of filings in the United States is falling. With 111 shareholder class actions filed so far this year, PWC estimates there could be about 190 filings for all of 2003.
In 2002, the total volume of securities litigation cases was 217, PWC said.
Breaking down the figures on filings, PWC said that only a dozen Fortune 500 companies have been named in securities cases this year, while 60 Fortune 500 companies were named in 2002.
PWC also noted that while the trend of case filings against telecommunications companies has reversed, health services and pharmaceuticals companies are being targeted in more cases.
In the past two years, telecoms were the most frequently sued in securities class action lawsuits, but only three have been sued this year.
Securities cases against health services firms totaled nine in the first seven months of 2003, compared with 10 in the full year of 2002, while lawsuits against pharmaceutical companies total 15 so far in 2003, compared to 22 in 2003.
The 2002 Securities Litigation Study is available online at http://www.10b5.com/
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 1, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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