On behalf of Mihalek Law posted in Securities Law on Friday, January 30, 2015.
The start of a new year is a time when many revisit the previous year to look for trends. The world of securities lawsuits is not an exception. Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse looked specifically at securities class actions. It provided its findings earlier this month.
The study found that while the number of securities class actions filed in 2014 in federal court rose slightly, the losses recorded by investors in the lawsuits were down. More specifically, there were not mega filings with losses of $5 billion reported at disclosure. In addition, the settlement sizes have gotten smaller. In 2014, the average settlement amount fell somewhere between 38 and 61 percent.
There are likely many reasons for the changes. A former SEC commissioner provided a couple of possible reasons. The first is that larger corporations could be trending toward being more cautious regarding accounting and disclosures. This could make it more difficult for those who are harmed to pursue claims alleging securities fraud. In addition, larger cap stocks experiencing sharp price declines are generally reduced when there is less market volatility and stock prices increase.
This information does not mean that parties that believe they are victims of securities fraud cannot or should not take legal action. Working with a lawyer who has experience in this field of law can help determine the best course of action. Depending on the circumstances, in some cases, that may entail creating or joining a class action lawsuit.
Source: The Wall Street Journal, A Subdued Year for Securities Class Actions, Jacob Gershman, Jan 27, 2015