The number of federal securities class-action cases fell 24% in 2009, to 169, according to a report by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research.
Also in decline last year was litigation related to the credit crisis and against financial firms.
The 2009 filings were 14% less than the annual average of 197 cases filed between 1997, when the clearinghouse database began, and 2008, according to the 29-page “Securities Class Action Filings-2009: A Year in Review.”
Overall, 4.6% of the companies in the S&P 500 stock index “were sued in a federal securities class action in 2009, compared to 9.2% in 2008,” according to a joint statement. Those companies represented 8.7% of the index’s total market capitalization, well below the 17.1% in 2008.
The percentage of financial companies in the S&P 500 named as defendants in a securities class action dropped to 11.5% in 2009 from 32.6% in 2008, the statement said. These companies accounted for 39.1% of the sector’s total market capitalization, “the highest percentage of any industry in 2009 but well below the 54.9% level observed in 2008,” the report said.
Litigation activity related to the credit crisis declined even more, by 47%, to only 53 cases in 2009 from 100 filings in 2008.