Securities class action settlements go down in number

NERA study found the U.S. securities class actions settlement rate is at its lowest since 1999

According to a new study by NERA Economic Consulting, the number of securities class action settlements has fallen significantly in the U.S. despite the fact that the number of suits filed has remained steady.

NERA released the results of its study on Tuesday. “Settlements of class actions in 2012 will be at their lowest level since 1999 if the current pace is maintained,” the report said. According to NERA’s results, only 49 cases have settled in 2012 through June, but the projected full-year total of 98 is down sharply from 128 settlements in 2010 and 123 settlements in 2011.

The average value of securities class action settlements in the first half of this year was up to $71 million from last year’s total $31 million average value. “However, the 2012 average was heavily influenced by the $1.01 billion settlement in In Re American International Group, Inc. Securities Litigation, the fourth tranche of which obtained final approval earlier this year,” the report said. Excluding that settlement, the average for the first half of 2012 is $41 million—still a significant increase over 2011.

Read the NERA report and the Wall Street Journal Law Blog for other trends observed in the study.

Read more of InsideCounsel’s coverage of securities class actions.

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Cathleen Flahardy

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