Cornerstone Research, in cooperation with Stanford Law School's Securities Class Action Clearinghouse, recently released its report on federal securities class action filings in 2008. Of note, in 2008:

  • 210 securities class actions were filed, a 19% increase over 2007 filings and the highest level of filing activity since 2004.
  • Approximately 103 of the filings named financial companies as defendants; approximately one-third of all large financial sector firms were sued in securities class actions filed in 2008.
  • Approximately 97 of the filings related to subprime mortgage and other credit issues; 21 related to auction rate securities losses.
  • Maximum dollar losses rose to $856 billion in 2008, a 27% increase over 2007.
  • Of the cases resolved in 2008, 41% were dismissed on motion and 59% were settled. The majority of cases were resolved after the first ruling on the motion to dismiss but before a ruling on the motion for summary judgment.
  • While the percentage of class actions alleging Section 10(b)/SEC Rule 10b-5 violations fell to its lowest levels in 2008, those alleging liability under Section 11 and 12(2) rose to the highest levels tracked by Cornerstone and Stanford.

Although the Cornerstone report notes a decrease in activity during the second half of 2008, other sources indicate that, with a spike in year-end filings, new suit filing activity actually increased in the second half of 2008.

For a full copy of the report, please click here.