It is not the end of the year, but that has not stopped NERA Economic Consulting from releasing its annual study on securities class actions. The 2007 report is entitled “Recent Trends In Shareholder Class Action Litigation: Filings Return to 2005 Levels as Subprime Cases Take Off; Average Settlements Hit New High.”
The study reaches the following notable conclusions:
(1) NERA predicts that there will be 207 filings by year end (a 58% increase as compared to 2006). The increase in filings has been driven in part by subprime-related litigation (38 filings as of Dec. 15).
(2) The value of the average settlement finalized or proposed to be finalized in 2007 (excluding mega-settlements greater than $1 billion) was $33.2 million, a jump up from $22.7 million in 2006.
(3) The post-PSLRA dismissal rates for securities class actions can be difficult to accurately calculate given the long-term nature of these cases, the ability to replead, appeals, etc. Interestingly, the study examines the current status of the 235 securities class actions filed in 2000 and finds that over 90% of these have reached some kind of final resolution. To date, approximately 60% of the cases have reached final settlement and 31.5% of the cases have been dismissed.
The 10b-5 Daily 