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Stanford Law School and Cornerstone Research Release Semiannual Report on Securities Class Action Filings

Publication Date: 
January 24, 2011
Health & Beauty Close-Up

Professor Joseph Grundfest speaks about the recent report released by the Stanford Law School's Securities Class Action Clearinghouse and Cornerstone Research. Health & Beauty Close-Up writes:

Federal securities fraud class action activity increased in the second half of 2010, but the number of filings for the full year remained low, according to Securities Class Action Filings--2010 Year in Review, a semiannual report prepared by the Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research.

According to the report, a total of 104 federal securities class actions were filed in the second half of the year compared with 72 filings in the first six months of the year. For the full year of 2010, there were 176 filings, a 4.8 percent increase from 168 filings in 2009, but 9.7 percent below the annual average of 195 filings between 1997 and 2009.


Professor Joseph Grundfest, Director of the Stanford Law School Securities Class Action Clearinghouse in cooperation with Cornerstone Research:

-"The sharp increase in federal litigation alleging disclosure violations in M&A transactions suggests that plaintiff lawyers are scrambling for new business as traditional fraud cases seem to be on the decline. There is little reason to believe that this trend will reverse or slow down; if anything, plaintiff lawyers may well bring an increasing percentage of these claims in federal court in an effort to control the litigation and to share in any fees that might result."

-"The spike in litigation against Chinese issuers presents an interesting challenge for investors and regulators alike. It's impossible to deny China's ascending importance as a global market force, but tensions may well arise as some Chinese issuers struggle to conform to Western market norms and others might engage in outright fraud."