Securities Suits Drop As Credit-Crunch Cases Dry Up, Study Says
The Stanford Securities Class Action Clearinghouse in cooperation with Cornerstone Research released their annual report. Business Week published this story:
Securities-fraud class-action lawsuits fell 24 percent in 2009 as litigation related to the credit crunch, and especially subprime-mortgage losses, began to dry up, according to a study.
“That pig has moved through the python,” Stanford Law School Professor Joseph Grundfest said of the financial traumas that helped trigger the recession. “All of the major cases that were profitable have already been filed,” he said. “The pool is in effect fished out.”
“The remarkable increase in old claims filed during 2009 suggests that plaintiffs are trying to fill the litigation pipeline by bringing lawsuits that were previously sitting in inventory,” Grundfest said in a statement. Until more lucrative financial sector suits dried up, he said, “they didn’t seem attractive enough to file.”