According to a report released today by Cornerstone Research , the number of average settlements of securities class action dropped by more than 50% in 2008. Researchers observed a sharp drop, a median amount of cases settled in 2008 was $8 million, compared with $9 million in 2007.
The total number of settlements in 2008 dropped to 99 from 110 the previous year.
Researchers assumed that the sharp drop can be attributed to the decline in multi-billion dollar settlements.
During the past 10 years, nine settlements of more than $1 billion were made, but those years included lawsuits against WorldCom, Enron Corp. and Tyco International Ltd.
However, the report reveled that the the average class period before 2008 was 518 days, but in 2008, it reaches a record of more than 800 days, which is nearly a year longer than the average for all settlements through 2007.
All settlements made in 2008 was within $1 billion. Cornerstone analysts believe, it is quite unlikely that this declining trend would be continue in the upcoming years.
Source: Business Insurance