Cornerstone Research, in cooperation with Stanford Law Schools Securities Class Action Clearinghouse, recently released a report on federal securities class action filings in the first half of 2008. Of note, in the first half of 2008:
- 110 securities class actions were filed, slightly more than the number of filings in the second half of 2007.
- Approximately 58 of the filings were related to subprime mortgage and other credit issues, with 17 of the suits involving auction rate securities.
- Average market capitalization losses for defendant firms increased, with a median loss for the first half of 2008 of more than twice the historical average.
- Maximum dollar losses rose to $587 billion in the first half of 2008, the highest level since the second half of 2002.
- Across industries, the financial sector had the most securities class action filings.
In the report, Cornerstone attributes the increase in filings to the increase in stock market volatility and issues concerning subprime mortgage and auction rate securities.