Shareholder Suits Fly As Deals Flourish
Professor Joseph Grundfest, director of the Securities Class Action Clearinghouse, is quoted in The Recorder on the decline of traditional securities class actions:
Securities defense lawyers at big firms have noticed an uptick in shareholder lawsuits over mergers and acquisitions, even those worth under $100 million, a reflection of both increased deal activity and eroded share values that have lowered sale prices.
"There's clearly been more cases filed over the last three months than in the comparable period the year before, both here in California and in Delaware," said Kevin Muck, head of securities litigation at Fenwick & West.
Joseph Grundfest, who heads Stanford Law School's Securities Class Action Clearinghouse , said he doesn't track suits that target M&A deals, but he agreed that the data shows traditional securities class actions have declined.
"Recently the stock market has been up and volatility has declined. Those are two other factors that would suggest securities fraud litigation would decline," Grundfest said. Meanwhile, he added, "just about every major financial firm that can be sued has been sued."