X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
John C. Coffee Jr.

The results are now in for 2018, and, in terms of securities class actions, it was another near-record year with a bumper crop of lawsuits. Some 403 federal securities class actions were filed in 2018, down slightly from 412 in 2017 (which was the highest year since 2001), but more than 200 percent above the average number for 1996 to 2016 (which was 193). (This data comes from Kevin M. LaCroix, “Securities Suit Filings Continued at Heightened Pace in 2018,” The D&O Diary, (Jan. 6, 2019) at pp 1-2.) Viewed together, 2017 and 2018 show a significant inflation in the rate of securities class action filings, particularly when one recognizes that the number of publicly listed companies has shrunk significantly (chiefly because of mergers and bankruptcies). If we use the 2017 year-end total number of U.S. publicly traded companies (4,411), the cases filed against publicly traded companies in 2018 (some 385) imply that 8.77 percent of all publicly traded companies were sued in securities class actions just in 2018—which litigation rate is the highest rate since 2006. This 8.77 percent rate is more than three times the average annual litigation rate over 1996-2016 (which was 2.9 percent). (Id. at p. 3. The litigation rate in 2017 was also a record at the time—8.4 percent.) As a result, public companies now face an over 1 in 12 chance this year of attracting a securities class action (if the 2018 rate persists).

This premium content is locked for
Delaware Business Court Insider subscribers only.

*May exclude premium content
Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.