Study: Investor Class Actions Dropped Off Last Year
Professor Joseph Grundfest is quoted in the Daily Journal on the decrease in class action cases filed in 2009:
Securities fraud class actions filings declined sharply as credit-crisis litigation dried up in 2009 according to a new study by Cornerstone Research and the Stanford University Law School Securities Class Action Clearinghouse.
The drop-off may seem counter-intuitive because the stock market tanked at the beginning of 2009, and studies have tied securities class action filings to negative market volatility. But after reaching a low in early March, the Standard & Poor's 500-stock index began a roughly 60 percent climb to its current position, eliminating the investor losses that commonly trigger securities class action filings.
"Just as a matter of logic, plaintiff lawyers will file their better cases faster," said Joseph Grundfest, Director of the Stanford Law School Securities Class Action Clearinghouse.
The report singled out San Diego-based Coughlin Stoia Geller Rudman & Robbins as responsible for bringing 63 percent of all securities class actions in 2009 that were filed six months or more after the alleged fraud ended.
In a historical analysis, a graph in the report showed that more than half of all securities class actions filed one year or longer after the end of the class period were dismissed. In contrast, more than half of the class actions filed less than a year after the end of the class period survived dismissal, according to the report.
"It appears that the Coughlin Stoia firm is going through the attic and moving their older inventory," Grundfest said.