Washington (May 11, 2004) — Reversing a multi-year trend, the overall number of class-action settlements declined in 2003, as did the total value of those settlements, according to a recent study conducted by Cornerstone Research.

In 2003, some 96 class-action suits were settled, compared to 112 in 2002, while settlement amounts fell from $2.5 billion in 2002 to $2 billion in 2003.

Cornerstone Research said more than 5 percent of settlements in 2003 were over $100 million, while roughly 66 percent of the 2003 settlements were for less than $10 million.

The study examined settlements of cases filed since the passage of the Private Securities Litigation Reform Act in 1995.

However, the Cornerstone study also found that approximately 30 percent of all post-Reform Act settlements have involved institutions serving as lead plaintiffs.  That compared to pre-Reform Act settlements, in which institutional participation as lead plaintiff was approximately 15 percent.

"The increased involvement by institutions as lead plaintiffs since passage of the Reform Act suggests that one of the intended objectives of the legislation — to increase the amount of institutional participation in securities class actions — is working,” said Dr. Laura Simmons, a Cornerstone Research principal.

The study also found that the law firm of Milberg Weiss Bershad Hynes & Lerach LLP was involved as lead or co-lead plaintiff counsel in more than 50 percent of all post-Reform Act cases settled to date.  The next nine most active firms were each involved as lead or co-lead plaintiff counsel in less than 10 percent of all settlements.

— WebCPA staff

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access