Securities Suits Up In 2008, But Might They Be Uphill Battles?
Professor Joseph A. Grundfest is quoted in The Wall Street Journal Law Blog commenting on the increase of securities class actions in 2008:
According to one report, which will be issued tomorrow by Stanford Law School and Cornerstone Research, 2008 saw a total of 210 prospective securities class actions filed last year, a 19% increase over the previous year and more than 80% above the 2006 total. Many of those suits allege that financial firms overvalued their mortgage-related assets; others complain about the business practices of companies that issued subprime loans.
And what’s ahead for 2009? Will courts remain awash in securities filings this year? Not likely, says Joseph Grundfest, the director of Stanford Law School’s Securities Class Action Clearinghouse. “I expect filings to drop in 2009 not because the severity of the credit crunch will go away, but because virtually all the major financial-services firms have already been sued,” he says. “I think for the first time in history, we have a pool of defendants that is fished out.”