PwC: Slight Slowdown in Federal Securities Class Action Filings

By Rob Starr, Content Manager, Big4.com

PwC’s Securities Litigation Update shows the activity of federal securities class action filings through September 30, 2012 has been slower when compared to the same time period last year. Plaintiff attorneys continue to focus their attention on merger and acquisition (“M&A”) related litigation, but to a lesser extent than in 2011 and similar to those levels seen in 2010.  M&A-related filings represented 20 percent of cases through September 30, 2012 (28 cases), whereas in 2010 and 2011 such M&A-related filings represented 21 percent (27 cases) and 25 percent (36 cases) of total cases for the comparable period, respectively.

Accounting-related cases during the first three quarters of 2012 represented 31 percent of filings, which is a nine percentage point decrease from the percentage of filings during the comparable period in 2011 (40 percent).

Filings in the high-technologyand energyindustries were the second largest through Q3 of 2012, each with 14 percent of filings, a decrease from 26 percent through Q3 of 2011 for high-technology, and a slight increase from 11 percent for energy. The financial services industry represented only nine percent of filings through the third quarter of 2012, a decrease of two percentage points over the comparable period in 2011.

The most active circuits continue to be the Second and Ninth, with 27 percent and 18 percent of the cases filed thus far in 2012, respectively.  When compared to cases filed during the comparable period in 2011, these statistics reflect a slight increase from 25 percent of cases filed in the Second Circuit, and a significant decrease from 31 percent of cases filed in the Ninth Circuit.  This decrease in the Ninth Circuit is most likely attributable to the decline in the number of cases filed against China-based companies thus far in 2012.