Securities Litigation Surges in 2009: An Advisen Quarterly Report - Q1 2009
Advisen Reports Q1 2009 Securities Litigation Filing is above 2008 Pace
More Class Actions and Non-US Filings; Large Settlements for Securities Fraud Cases
The commercial insurance industry is exposed to a surge in securities litigation filings in the first quarter of 2009, according to results of a quarterly review of securities litigation by Advisen, the leading provider of market information to the global commercial insurance industry. Advisen tracked 169 securities cases in its Master Significant Case and Action Database (MSCAd), up from 125 cases in Q4 2008 and 134 suits a year earlier in Q1 2008.
Projecting this filing activity forward, 2009 would see 676 securities cases, an increase of 38% over 2008. However, Advisen notes that Madoff-related cases were responsible for 30% of all securities cases in the first quarter, so the brisk pace of filings will likely abate through 2009.
Sixty-Seven securities class action suits (SCAS) were filed in Q1 2009, up from 53 cases the quarter before and 56 suits a year earlier. This translates to an annualized Q1 2009 figure of 268 cases filed, which would surpass the relatively litigious year of 2004 with 263 suits and 23% higher than the 218 suits filed in 2008.
Advisen tracks over 34,500 suits including the 169 new securities cases from Q1 2009. You can purchase a list of the companies facing these 169 new securities suits or other lists by clicking the link below. Purchase a list of cases (even beyond securities cases) that suits your needs or send us your client list to be matched against our database. The list of cases that you purchase will include the most up-to-date case list. Therefore the number of cases may be larger then mentioned above.
After SCAS cases, securities fraud accounted for 34 suits filed in the first quarter, up from 19 in Q4 2008, but down from 54 in Q3 2008. On an annualized basis, securities fraud cases filed in Q1 2009 represented 136 cases, flat with 2008 but down from 175 in 2007. Other types of cases filed in Q1 2009 were: breach of fiduciary duties (26), collective actions in non-US courts (20), derivative shareholder actions and other derivative cases (14), and others (8).
MSCAd contains global filings and Advisen reports that the number of suits filed against non-US companies in US courts is on the rise, and so is the number of suits filed against both US and non-US companies in courts outside the US. Of the 169 securities cases filed in Q1 2009, 47 were filed against non-US companies, and 22 were in courts outside the US. A total of 27 suits were filed outside of the US court system, including five against US companies.
The average securities settlement/award in the first quarter was similar to recent year averages, but the quarter was unusual in that the largest awards all were securities fraud suits. Securities fraud cases typically are filed by regulatory agencies such as the US Securities and Exchange Commission.
About Advisen
Advisen integrates business information and market data for the commercial insurance industry and maintains critical risk analytics and time-saving workflow tools for over 530 industry leading firms. Through its work for the broadest customer base among information service providers, Advisen delivers actionable information and risk models at a fraction of the cost to have them built internally. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry's deepest data sets with proprietary analytics and offers insight into risk and insurance that is not available on any other system. Advisen is headquartered in New York. For more information, visit http://www.advisen.com or call +1.212.897.4800 in New York or +44(0)20.7929.5929 in London.
