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Subprime-related lawsuits and cases against foreign securities issuers drove up federal securities class action filings in 2007 after a two-year dip in filings, according to the PricewaterhouseCoopers 2007 Securities Litigation Study. Cases related to accounting issues, meanwhile, fell to 50% of cases filed in 2007, compared with 61% of 2006 filings. Filings were slow at start of last year, but totaled 163 cases by year’s end, compared with 109 cases filed in 2006. Total settlements and their value remained fairly stable, at 113 settlements adding up to $6.37 billion in 2007 compared with 112 settlements worth $6.44 billion in 2006, while the average settlement dipped to $28.3 million in 2007 from $57.5 million. More than half of the new cases were filed in two circuits, with 55 cases filed in the 2d. Circuit, which includes New York, and 44 in the 9th Circuit, which includes California. Three industries were the biggest targets, with 25% of securities cases against technology companies, 21% against the banking and financial services industry and 13% with pharmaceutical industry defendants. Much of the 2007 increase in case filings stemmed from the 37 subprime-related cases, or 23% of last year’s total securities cases. Despite the increases, case filings remain lower than they were before the corporate governance overhaul ushered in by the Sarbanes-Oxley Act of 2002, said Grace Lamont a partner at PricewaterhouseCoopers International Ltd. “This appears to support the view that the deterrent effects of Sarbanes-Oxley, and the increased involvement of regulators that followed its enactment, may have been responsible for the lower number of overall filings,” Lamont said. Securities cases against foreign companies spiked 93% to 27 cases, compared with 14 in 2006. Last year’s total approached the 2004 record of 30 cases against foreign companies. “Foreign issuers are continuing to question whether the benefits of trading on the U.S. exchange outweigh the costs of accessing the largest capital market in the world,” said PricewaterhouseCoopers partner Patricia Etzold.

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