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Crisis-Related Lawsuits Show A Decline

Publication Date: 
July 28, 2010
Source: 
The Wall Street Journal Online
Author: 
Joanna Chung

Professor Joseph Grundfest is quoted on the decline in class-action lawsuits related to the credit crisis over the past year. Joanna Chung of the Wall Street Journal filed this story:

A decline in lawsuits related to the credit crisis has pushed the volume of new federal securities cases toward preturmoil lows, according to two reports.

"The tide is going out…the securities fraud litigation wave stimulated by the credit crisis now appears to be history," said Joseph Grundfest, professor at Stanford Law School, which issued one of the reports jointly with Cornerstone Research on Tuesday.

Plaintiffs filed a total of 71 lawsuits seeking class-action status in federal courts during the first half of the year, of which eight were related to the crisis. That compares with 84 filings during the same period last year, which included 37 crisis-related complaints.

If this pace continues, there will be about 143 lawsuits by December, the lowest level since 2006, the year before the crisis hit.