Federal securities fraud class-action lawsuits filed in the first half of this year totaled 119, the highest semiannual filings since the 126 in the first half of 1999, said a report released Tuesday by Cornerstone Research and Stanford Law School Securities Class Action Clearinghouse.
The filings are up 36.7% from the first half of last year and up 16.6% from the second half of last year.
Some 6.4% of Standard & Poor’s 500 companies were subject to filings on an annualized basis, more than double the 2.6% for all of 2015 and the highest rate since the 9.2% of 2008.
“A substantial increase in (merger and acquisition) class actions largely explains the increase in the number of filings” from last year, said the report, “Securities Class Action Filings — 2016 Mid-Year Assessment.”
Mergers and acquisitions filings totaled 24 in the first half of this year, up from nine in the second half of last year and eight in the fist half of last year.
In the first half of 2016, 98 of the filings were against U.S.-based companies and 21 against non-U.S. companies. By contrast, in all of 2015, 154 filings were against U.S. companies and 35 against non-U.S. companies.
In 2016, an annualized 6.1% of the S&P 500 market capitalization was subject to a new filing, up from 3.2% in all of 2015 and the highest since the 11.2% in 2010.
For the first six months of 2016, a total of $43 billion of defendant companies’ market value was lost from the trading day with the highest market capitalization during the class-action period to the trading day immediately following the end of the class-action period, the report said. By contrast, the loss was $71 billion and $34 billion in the second half and first half of 2015, respectively.
“While the number of M&A filings increased in the first half of the year, these filings, which do not typically involve a ‘stock-drop’ allegation, do not affect” market value loss, the report said.