Shareholder Class-Action Suits On The Wane?
from the feel-bad-for-those-lawyers dept
In the wake of a couple of decisions by the Supreme Court to limit shareholder class-action suits, the WSJ's law blog says that the number of such suits is already falling. In the first half of the year, 59 securities class-action suits were filed, compared to 63 in the same period a year earlier, and an average of 101 every six months between 1996 and 2005. The head of the Stanford law group that compiled the report says it's because there's less fraud going on, thanks to increased enforcement by the SEC and DOJ. What seems more likely, though, is that the stock market has been pretty strong, decreasing the number of big run-ups followed by huge falls in share prices. It's much easier to find pissed-off investors after a stock has tanked, since plenty of them are looking for somebody to blame, and the idea of getting a big settlement to offset their loss is an appealing one. Of course, those settlements really only tend to benefit one party -- and it's not the shareholders.Filed Under: class action, lawsuits
