Number of Securities Class Actions Down at Mid-Year

By Rob Tricchinelli

Aug. 6 - There were 78 securities class actions filed in the first half of 2014, down from 91 in the latter half of 2013 but up slightly from the 75 in the first half of that year, according to an Aug. 6 report from Cornerstone Research.

The 2014 number is down from the half-year average of 95 from 1997 to 2013.

In the first half of the year, one in approximately 60 companies traded on U.S. exchanges faced a class action, the report said.

Over the first half of 2014, the report said, there were also no "mega filings," which it defined as cases with "dollar disclosure loss" of $5 billion or more or a "maximum dollar loss" of $10 billion or more. There had been at least one mega filing in every half year since 1998.

'Halliburton' Decision

The report also cited the U.S. Supreme Court's Halliburton decision in June, which did not overturn the fraud-on-the-market theory but did allow defendants to rebut the presumption of an efficient market before the class certification stage.

"Had that decision gone the other way, the already low numbers of class action filings would have been even lower, and would likely be trending toward zero," Joseph Grundfest, a professor at Stanford Law School and former Securities and Exchange Commissioner, said in a news release.

Grundfest runs the Securities Class Action Clearinghouse at Stanford, which compiled the data on the class actions.

 To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com

To see the report, visit http://www.cornerstone.com/ getattachment/8b34f0cd-79a2- 497a-9821-a2893928506f/ Securities-Class-Action- Filings%E2%80%942014- Midyear-Asses.aspx .