Pig Exits Python: Securities Class Actions Plummet 24% in '09 as Credit Crisis Eases
As the mortgage meltdown and credit crisis eased, the number of federal securities class actions filed in 2009 over alleged stock fraud dropped sharply, compared both to the previous year and a 10-year average.
There were 169 such filings in 2009, a 24 percent reduction from the 223 in 2008, according to a new report (PDF) by the the Securities Class Action Clearinghouse at Stanford Law School and Cornerstone Research.
That figure also represents a 14 percent decline from the 197 annual filings made, on average, between 1997 and 2008, notes a press release (PDF).
“That pig has moved through the python,” Joseph Grundfest, a former SEC commissioner who is now a law professor at Stanford, tells Bloomberg, referring to the sudden financial debacle in late 2008 that triggered a global recession and, perhaps, exaggerated fears about the state of the economy. “All of the major cases that were profitable have already been filed. The pool is in effect fished out.”
