Not the first time this has been brought up at The Daily Caveat, but the handicapping continues as to whether the recently reported slowdown in the filing of securities class actions is the start of a trend or just the tide going out. From the WSJ Law Blog:

Class Actions: Going Out of Style With a Bang?

Posted by Peter Lattman
February 7, 2006, 8:49 am
WSJ Law Blog

Last week in a post titled “Underlawyered.com,” we wrote about a study by Stanford law professor Joseph Grundfest, which found a steep drop in the overall number of securities fraud class actions filed.

Today, The Wall Street Journal’s Paul Davies has a story entitled “Class-Action Pay Settlements Soar.” Davies cites a study by Cornerstone Research finding that corporations paid a record $9.6 billion to shareholders to settle securities class action lawsuits last year, compared with $2.9 billion in 2004.

How to reconcile the two studies? The majority of last year’s payouts came from the $6.1 billion paid out by WorldCom and related parties. The number would’ve been even higher had it included the $7.1 billion settlement involving Enron, which was announced last year but hasn’t been finalized.

Click on over here for further details and the benefit of Mr. Lattam's handy imbedded links.

-- MDT

Labels: Enron, Standford Securities Class Action Clearing House