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Class Action Suits Surge In Wake Of Credit Crisis

Publication Date: 
January 12, 2009
Source: 
Business Insurance
Author: 
Mark A. Hofmann

Professor Joseph A. Grundfest, director of the Securities Class Action Clearinghouse and co-director of the Rock Center for Corporate Governance, is quoted in an article in Business Insurance regarding the increase in securities class action filings recenlty reported by the Securities Class Action Clearinghouse:

"I think there's a sense that everybody understood that here was a great deal of litigation against the financial services industry, but no one has previously documented that the intensity of this litigation was unprecedented," said Joseph Grundfest, professor of law and business at Stanford Law School and co-director of the Palo Alto, Calif.-based Rock Center for Corporate Governance at Stanford, in an interview.

The number of new class action suits against large financial services companies could wane, though, said Mr. Grundfest, a former commissioner of the Securities and Exchange Commission.

"So many financial services companies have been sued already that there are few major firms left to sue," Mr. Grundfest said. "Even if the credit crunch gets worse," it's unlikely that many additional major financial services companies will be named in suits "because they're simply not there. Complaints will be amended and damage claims may grow, but the list of major defendants is already set," he said.

"If there's going to be an expansion, it's going to be among the midsize or smaller cap firms," he said.

Securities Class Action Filings, 2008: A Year in Review was prepared by the Stanford Law School in cooperation with Boston-based Cornerstone Research.

The full report is available at http://securities.stanford.edu.