Takeaways From The 2014 Securities Class Action Filings Midyear Assessment

Cornerstone Research, an economic and financial consulting and expert testimony company, in conjunction with research performed by Stanford University, have released their midyear assessment regarding securities class action filings. While 2014 had a slow start in the number of federal class action securities filings, the data suggests that filing activity has continued to remain at approximately the same pace as in the previous two years.

Key Takeaways From Findings

Plaintiffs filed 78 new federal class action securities cases in the first six months of 2014. That is 13 fewer than the second half of 2013, however marginally higher than the 75 filings recorded in the first half of 2013.  This number was 18 percent lower than the historical semiannual average of 95 filings the industry observed between 1997 and 2013.

  • Continuing a three-year trend, the number of filings in the first half of 2014 has dropped against companies with large market capitalizations, as represented by firms in the S&P 500.  Approximately 1 in every 60 companies listed on the major U.S exchanges was the subject of a class action.
  • The report also found that class actions are persistently filed shortly after the end of the class period.  In the first half of 2014, the median lag time between the end of alleged class period and the filings date of the lawsuit was 12 days.

Despite the low number of filings detailed in the report for 2014 so far, experts still deduce the likelihood that public companies will be the subject of a filing has not changed dramatically. The report also details up to date information regarding IPO litigation exposure, filings against foreign issuers, and filings by industry.

This is a brief overview of the detailed report. To get a complete picture of everything found during the research and where securities class action filings stand so far in 2014, read the complete report here.