Author: Jonathan Stempel
Professor Joseph Grundfest spoke with Reuters' Jonathan Stempel on a new study released by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse reporting that securities class-action settlements in 2011 dropped to the lowest level in a decade.
Angry investors are seeing far fewer financial benefits from lawsuits accusing corporate America of securities fraud, but may be on the cusp of a turnaround.
The number and size of securities fraud settlements that won final U.S. court approval fell in 2011 to the lowest in a decade, amid a drop in cases linked to accounting problems and U.S. Securities & Exchange Commission enforcement activity.
"Lawyers will debate whether this decline is a result of plaintiffs having brought weaker claims or pro-defendant changes in the legal regime, or some combination," Joseph Grundfest, a Stanford University law professor who works with Cornerstone, said in a statement. "The really big litigation bucks were not in the class-action securities fraud market in 2011."