M&A Class Actions Jump 847% in 2 Years; ‘Fee Hungry’ Law Firms Blamed
In the last two years, there has been a huge spike in class action lawsuits claiming investors weren’t fairly compensated in corporate mergers and buyouts.
Last year, there were 341 M&A suits filed, a jump of 78.5 percent from 2009 and 847 percent from 2008, Fox News reports, citing statistics from Securities Class Action Services. “Law firms’ sudden interest in ensuring shareholders are fairly compensated appears to be sparked by the realization that these M&A cases are easy money,” the story says, “often translating to hundreds of thousands of dollars in fees for very little work.”
“Fee hungry” firms often announce an investigation hours after a major deal is announced, the story says. Settlements often result in additional disclosures surrounding a transaction and payment of legal fees that amount to $500,000 on average.
