Reporting on 2009, filings are down

As usual, NERA Economic Consulting and Stanford Law School, in cooperation with Cornerstone Research, have released reports looking back at the year’s securities fraud class action activity (NERA press release, report; Stanford press release, report).

In its latest annual report, NERA does not separately track or comment on filings against foreign issuers, except for a footnote on the Vivendi trial (p. 11). Stanford does. (Both reports are discussed in-depth by learned friends at the 10b5 Daily (here and here) and D&O Diary and elsewhere, such as at the AmLaw Daily and Bloomberg.)

In Stanford’s 2009 Mid-Year Assessment the Class Action Filings-Foreign Index (CAF-F Index) was introduced, which tracks filings against non-US issuers relative to total filings. It found that “[t]he frequency of filings against issuers with non-U.S. headquarters has increased in recent years” from 6.8% of filings during 1997 through 2003, to 13.3% of filings during the next five years, peaking at 13.8% (31 filings) in 2008. This is all the more noteworthy since “the share of foreign companies listed on the major U.S. exchanges [NYSE and NASDAQ] has actually decreased” from 13.3% to 10.7% between 2002 and 2008. (p.7)

A key finding of its year-end report is however that “[a]fter peaking at 16.4 percent in 2007, the percentage of filings against foreign issuers declined to 13.5 percent in 2008 and to 12.4 percent in 2009.” (p.11)

What’s more: in Canada, class action filings will be up this year (Financial Post, thanks to AB Data); also see NERA’s Trends in Canadian Securities Class Actions (study).

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