Securities Litigation Trends Climbing
NU Online News Service, Aug 26, 11:11 a.m. EDT?The overall dollar value of securities litigation settlements appears to be on pace to equal or exceed the level reported last year, with settlements totaling $1.5 billion so far this year, according to a PricewaterhouseCoopers analysis.
In a report released by the New York office of the professional services firm late last week, PricewaterhouseCoopers identified 60 settlements in the first seven months of 2003, totaling $1.5 billion.
For all of 2002, the total value of the 107 settlements in 2002 was roughly $2.1 billion, according to the analysis.
For the first seven months of this year, the average settlement value for the 60 cases equaled $25.1 million, with a number of extremely large settlements?over $50 million?included in the mix. In 2002, the average settlement value was $19.9 million?up 12 percent over the average settlement value in 2001 and up by 40 percent over the average settlement value for the years 1996 through 2000
The number of settlements over $10 million remains high, with 18 cases above that threshold recorded in the first seven months of 2003, PricewaterhouseCoopers found. In 2002, the firm said that 40 settlements valued at $10 million or greater were a record number for an annual period.
Turning to the frequency of securities litigation filings, PWC said that the rate of filings in the United States declined approximately 21 percent for the seven-month period ending July 31, 2003. Noting that a total of 111 shareholder class actions were filed during the period, PWC estimated that there could be roughly 190 filings for all of 2003.
In 2002, the total volume of securities litigation cases was 217, PWC said.
Breaking down the figures on filings, PWC said that only a dozen Fortune 500 companies have been named in securities cases this year, while 60 Fortune 500 companies were named in 2002.
PWC also noted that while the trend of case filings against telecommunications companies has reversed, health services and pharmaceuticals companies are being targeted in more cases.
In the past two years, telecommunications companies were the most frequently sued in securities class action lawsuits, but only three telecoms have been sued so far in 2003.
Securities litigation cases for companies in health services totaled nine in the first seven months of 2003, compared with 10 cases in the full year of 2002, while lawsuits against pharmaceutical companies totaled 15 so far in 2003, compared to 22 in 2003.
Cases in the utilities sector also appear to be dropping off with only five utility, energy, or oil and gas companies being sued in the 2003. In 2002, the total was 26.
Securities litigation cases involving foreign companies listed on US stock exchanges ("foreign registrants") totaled seven in the first seven months of 2003, compared to an all-time record of 22 foreign registrants named in class action lawsuits for the entire year in 2002.
The 2002 Securities Litigation Study is available online at http://www.10b5.com/
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