Not the first time
this has been brought up at The Daily Caveat
, but the handicapping continues as to whether the recently reported slowdown in the filing of securities class actions is the start of a trend or just the tide going out. From the WSJ Law Blog
Class Actions: Going Out of Style With a Bang?
Posted by Peter Lattman
February 7, 2006, 8:49 am
WSJ Law Blog
Last week in a post titled “Underlawyered.com,” we wrote about a study by Stanford law professor Joseph Grundfest, which found a steep drop in the overall number of securities fraud class actions filed.
Today, The Wall Street Journal’s Paul Davies has a story entitled “Class-Action Pay Settlements Soar.” Davies cites a study by Cornerstone Research finding that corporations paid a record $9.6 billion to shareholders to settle securities class action lawsuits last year, compared with $2.9 billion in 2004.
How to reconcile the two studies? The majority of last year’s payouts came from the $6.1 billion paid out by WorldCom and related parties. The number would’ve been even higher had it included the $7.1 billion settlement involving Enron, which was announced last year but hasn’t been finalized.
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Labels: Enron, Standford Securities Class Action Clearing House