Over the last few weeks, the Am Law Litigation Daily has read what feels like an endless stream of reports detailing the falloff in securities class action filings in the second quarter of 2009. (See here and here if you missed our most recent reports on the reports.) So when we looked over Advisen's second quarter securities litigation report (pdf), our eyes were immediately caught by this sentence: "Interestingly, the first few weeks of the third quarter have seen a surge in securities suits once again."
Well, that's a relief!
The D&O Diary's Kevin LaCroix, likewise, took note of a jump in July securities class action filings in his post on the Advisen report. By LaCroix's count, there were at least 16 new cases filed in July, which puts the filing rate back at historical levels. What's more, it's not just the usual suspects in the financial services industry that are in the crosshairs of the plaintiffs bar. Eleven of the 16 suits filed in July involved companies outside the financial services sector, with the majority targeting defendants in the life sciences business.
The news has to be welcome to the securities defense bar after a couple of weeks of grim reports about the second quarter. Two weeks ago, the Stanford Class Action Clearinghouse and Cornerstone Research reported that June's six new cases were the fewest since December 1996. Last week's report by NERA Economic Consulting was less dire, but still noted a sharp drop in recent filings. Advisen's report, which was released Friday, says the second-quarter drop was from 221 filings in the "frantic" first quarter of 2009 to 140 new filings.
Why, you're probably wondering, are Advisen's numbers so much larger than those in the other two studies? As D&O Diary points out, Advisen's definition of a "securities lawsuit" takes in more cases than the securities class actions tracked by Cornerstone and NERA (which, in turn, track a slightly different cases.) Advisen's report also includes shareholder derivative suits, breach of fiduciary duty litigation, and SEC enforcement actions.
This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.