Federal court securities class-action filings are on track to produce their second lowest number in 14 years, according to a report released Wednesday by Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research.
A total of 71 filings were made in the first six months of this year, a 15.5% decline from the 84 filings in the same period of 2009.
If the filing trend for the first half of the year continues, there would be a total of 143 filings this year, the second lowest annual number of filings since 1997, when Stanford and Cornerstone started the tracking, noted the report, “Securities Class Action Filings-2010 Mid-Year Assessment.” The lowest was 119 filings in 2006.
The fall this year reflects the decline in litigation related to the credit crisis, which accounted for only eight filings in the first six months of 2010. compared with 37 filings in the first half of 2009, and an absence of filings related to Ponzi schemes.
Some 2.4% of companies, representing 4.9% of market capitalization in the S&P 500, were named as defendants in filings in the first half of 2010, compared with 4.6% of companies last year, the report said.
Financial companies were named in 29.6% of the filings in the first half of this year, the report said. Some 5.1% of the financial companies in the S&P 500 were named as defendants in federal securities class actions in the first half of 2010, representing 17.5% of the sector’s market capitalization.
Most frequently named sectors in the filings were health care and energy, each accounting for 7.7% of the companies in those sectors of the S&P 500.
In all of last year, 11.9% of financial companies, 3.7% of health-care companies and 2.6% of the energy companies in the S&P 500 were targeted.
For the first half of this year, the report shows a total $53 billion loss in the defendant firms’ market value from the trading day immediately preceding the end of the class-action period and the trading day immediately following it. That’s down from $49 billion in the first half of last year.
Also, it shows for the first half of this year a total $345 billion loss in the defendant firms’ market value from the trading day with the highest market capitalization during the class period to the trading day immediately following the end of the class period. That’s down slightly from $352 billion in the first half of last year.