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Price Jumps For Securities Settlements

Publication Date: 
March 25, 2010
Source: 
Daily Journal
Author: 
Gabe Friedman

Professor Joseph Grundfest, director of the Securities Class Action Clearinghouse, is quoted in the Daily Journal on the increase in U.S. securities class action settlements in 2009:

The price of settling securities fraud class actions rose more than 27 percent on average in 2009 over the previous year, and the number of settled cases rose as well, a new study released Wednesday found.

The Stanford Class Action Clearinghouse and Cornerstone Research released the findings as part of an annual report on securities class action settlements. It found there were 103 approved settlements in 2009, averaging $37 million each, up from 97 settlements averaging $29 million in 2008.

Significantly, the median settlement value in 2009 did not change from $8 million in 2008. Though it is below the $9.3 million inflation-adjusted median for 2007, it is still on the higher end of median values from between 1996 and 2008, according to the findings.

...

Joe Grundfest, a Stanford law professor and advisor on the study, agreed but suggested the cases that flowed out of the financial crash in 2008 may not drive up settlements.

"The defendants have the claim that the whole market went down for reasons entirely unrelated to anything they did," Grundfest said. "So there is going to be an interesting dispute about the causation of damages."