A Busy Year for Securities Class Actions

A Busy Year for Securities Class Actions

The number of securities class-action lawsuits filed in federal courts last year ticked up to the highest level in several years.

That’s according to an early analysis by D&O Diary’s Kevin LaCroix, who reports that the 186 federal court securities lawsuits filed in 2015 was the most recorded in a single year since 2011. Last year’s figure was more than 9% above 2014’s total of 170.

The pace of securities litigation in 2015 was still a bit slower than the long-term annual average between 1997 and 2013, mostly reflecting the sharp decline in the number of publicly listed companies in the United States.

So what explains the recent bump in activity? According to D&O Diary:

The increased number of securities class action lawsuit filings in 2015 compared to the year before and compared to recent annual averages is largely attributable to the increased number of IPO-related securities lawsuits in 2015. During 2015, there were 29 IPO-related securities lawsuit filings in both state and federal courts (representing about 15% of all securities suit filings), compared to 2014, when there were 17 IPO-related securities lawsuit filings in both state and federal courts (representing about 10% of all securities suit filings).

Another factor: The number of securities suits against foreign companies was also above the historical average.

Securities suits in 2015 targeted a range of industries. Many of them, notes D&O Diary, were directed at companies in the pharmaceutical and high-tech sectors.

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Republished by the Law Office of Scott A. Ferris, P.A.