NERA Economic Consulting has released a study entitled “Recent Trends In Shareholder Class Action Litigation: Filings Stay Low and Average Settlements Stay High – But Are Those Trends Reversing?” The study reaches the following notable conclusions:
(1) The number of filings have increased, with 76 new filings through the first half of 2007. The projected annual total of 152 would be a 12% increase over last year.
(2) The average settlement value during the first half of 2007 (excluding settlements over $1 billion) hit a new high of $30 million. There is evidence, however, that this trend may reverse direction based on a decline: (i) in the investor losses associated with recent filings; and (ii) in the prevalence of accounting allegations in recent filings.
(3) Eight of the top ten settlements of all time have resolved in 2006 or 2007, or are pending. Tyco’s announced preliminary settlement of $2.975 billion would be the largest amount ever paid by a single settling defendant.