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Filing of federal securities class actions continued to wane during the first half of 2010, according to separate reports released this week. Both NERA Economic Consulting and the Stanford Law School Securities Class Action Clearinghouse reported that filings during the first half of 2010 were down compared to one year ago. The numbers have been on the decline since 2008. The Stanford report, released on Wednesday, concluded that federal securities class action filings declined by nearly 16% during the first half of the 2010 — from 84 to 71. NERA reported similar findings on Tuesday and concluded that if the second half of the year mirrors the first, filings for 2010 will decline by nearly 9%, from 221 to 202. Both reports cited fewer filings related to the credit crisis as the primary reason for the decline. “The securities fraud litigation wave stimulated by the credit crisis now appears to be history,” said Stanford Law professor Joseph Grundfest, director the school’s Securities Class Action Clearinghouse, which produced the report with Boston-based Cornerstone Research. “We have an inventory of cases waiting to be dismissed, settled or tried but, to borrow a phrase from the current Gulf oil spill crisis, it seems that this flow has largely been capped.” Grundfest speculated last year that credit crisis filings were falling off because many of the financial services firms involved in the economic meltdown had been sued in 2008 and there were few targets left. By NERA’s count, 17 credit crisis-related lawsuits were filed during the first half of 2010. There were 57 such filings during all of 2009 and 103 in 2008. NERA senior consultant Jordan Milev said on Tuesday that many of the previously filed securities class actions have yet to be resolved and that two-thirds were still pending. The median settlement value for class action securities suits thus far in 2010 was up, he said. “Between January and June of this year, many more cases settled for amounts greater than $10 million,” Milev said. “In fact, half of all settlements were for an amount higher than $11.8 million — a record. Whether this shift is temporary or permanent remains to be seen.” Class action filings have been coming together more quickly in 2010 — the median lag time between the end-of-class period and filing date fell to 25 days, compared to 112 days during the second half of 2009, according to the Stanford report. Cornerstone Research Vice President John Gould speculated that the shortening time might indicate that plaintiffs “are catching up with old cases after being inundated with cases involving the credit crisis.”

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