US Securities Fraud Class Actions Fell in 2012

The number of US securities fraud class action cases fell by 19% in 2012, to 152 cases from 188 in 2011, and reached the second-lowest level in 16 years according to a report issued by Stanford Law School and consulting firm Cornerstone Research.

Although the number of filings launched against Chinese companies listed in the US via reverse mergers showed a decline, class action filings against other foreign companies listed in the US remained high. However, there were no new securities fraud class actions related to the credit crisis in 2012, against three the previous year.

Federal cases related to merger and acquisition (M&A) activity, which totaled 40 in 2010 and 43 in 2011, only numbered 13 last year. Class action securities filings directed at financial companies, which fell from 43 in 2010 to 25 in 2011, were down further at 15. However, the trend was offset by filings against healthcare, biotechnology and pharmaceutical companies, which edged up from 28 in 2011 to 33 last year.

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