Securities Suits Soar Toward A Record In ?04
By Susanne Sclafane
NU Online News Service, Nov.16, 12:52 p.m. EDT?PricewaterhouseCoopers yesterday posted some worrisome figures for directors and officers liability insurers, reporting that the number of federal class action securities lawsuits reached 69 in the third quarter?the highest quarterly total in nearly two years.[@@]
And that figure doesn't even include recent cases filed against insurers and insurance brokers, which will make it into the fourth-quarter report, PWC said.
In an update of its 2003 PricewaterhouseCoopers Securities Litigation Study, PricewaterhouseCoopers research also said that the third-quarter figure doubled last year's third quarter, and that the total number of cases filed through Oct. 24?at 175?already matches last year's full-year total of 175.
The record-breaking third quarter makes it likely that the number of securities cases filed this year will exceed 210, a total that would represent at least a 20 percent increase over last year's 175 cases.
Since PricewaterhouseCoopers began tracking federal securities litigation in 1996, the firm said that only two years have produced more than 210 federal cases, 1998 and 2002, when a peak in U.S. corporate scandals produced a total of 218.
In a statement announcing the results, Charles Hacker, Investigations and Forensic Services partner, said that a significant rise in the number of foreign companies sued, and a resurgence in the number of cases against computer software, hardware and services companies, are contributing to the high figures.
"In an environment of heightened SEC/DOJ activism, these factors and the continuing prevalence of accounting-related and ?pharmaceutical efficacy' cases have helped to produce a record volume of litigation this quarter," he added.
PricewaterhouseCoopers provides industry-focused assurance, tax and advisory services for public and private clients.
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