NU Online News Service, Oct. 22, 2:50 p.m. EDT
A recent publication from risk management and insurance intermediary Willis Group Holdings said securities class action filings in the United States between 2007 and 2009 were about 60 percent higher than in 2006.
Willis' "Boardroom Guide" said many of the claims are still pending, but "there is good reason to assume that the average settlement amount of these claims is also set to be higher than in previous years" considering the size of the financial institutions and companies being sued.
The report advised directors and officers to be clear about the coverage they have for investigations due to an increased appetite for improved enforcement and cooperation between regulators.
"The financial crisis has resulted in heightened regulation, leaving directors more exposed than ever to the risk of being sued for accounting irregularities, issues arising from insolvency proceedings, and breaches of health and safety legislation, environmental laws, and competition regulations," said Mark Wakefield, executive director of FINEX Global, the executive risk and professional liability business of Willis.
"Today, more than ever, [directors and officers] are vulnerable to claims that may be brought in any jurisdiction in which their business operates," he added.
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