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Securities class-action suits fell in 2011

Posted: March 15, 2012
By: Chris Mondics
Source: Philadelphia Inquirer
Practice Areas: Securities Litigation

Securities class-action lawsuits, long a booming area of the law, dropped substantially in 2011, hitting a decade low, according to a study released Wednesday by Stanford University Law School and Cornerstone Research, a consulting and litigation-support firm.

The number of securities class-action settlements in 2011 dipped 25 percent, to 65, down from 86 the preceding year, the study says.

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Sherrie Savett, chair of the substantial-securities litigation practice at Berger & Montague P.C. in Philadelphia, said a flurry of securities lawsuits initiated against banks, mortgage lenders, and investment banks after the financial market collapse of 2008 and 2009 have mostly worked their way through the system. Also, she said, Supreme Court rulings have made it more difficult for plaintiffs to survive motions to dismiss and to win discovery.

"Securities litigation will always be there," Savett said. "There will always be fraud, and there will always be cases powerful enough to survive the very high level of pleading that is required."

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