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M&A Drove 2011 Securities Actions As Crisis Suits Died Down

Posted: April 11, 2012
By: Ian Thoms
Source: Law360
Practice Areas: Securities Litigation

With fewer opportunities to bring new cases over the financial crisis, many shareholder plaintiffs have redirected their aim to corporate transactions, bringing a flood of class actions over mergers and acquisitions in 2011, according to a report released Wednesday by PricewaterhouseCoopers LLP.


"You can pretty much expect that there's going to be shareholder litigation on at least half of the mergers coming down the pike," said Sherrie Raiken Savett, a partner with plaintiffs firm Berger & Montague PC. "They're very easy to bring."

Largely because of the M&A cases and an increase in suits filed against foreign issuers - 61 cases - overall securities class action activity was up 10 percent in 2011. A total of 191 federal securities cases were filed in 2011, up from 174 in 2010 and 157 in 2009.

"But without the M&A cases, classic securities class actions were at historic lows," Savett said.


While federal cases against financial firms continued to dwindle, Savett said plaintiffs might bring a last slate of suits over the financial crisis in state court, especially in New York, where longer statutes of limitation allow for later filings.

"You might see a flurry of fraud cases by the end of this year," Savett said. "Then, I think, the new financial crisis cases will be over."

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