Bruce:
I am a D&O Liability Insurance Claims specialist who has handled hundreds of D&O securities class action claims over the years on behalf of insurance carriers who underwrite those policies. The main reason that you won't find many securities class action trials in the last decade is because of certain language in today's standard D&O Policy terms and conditions, specifically, the "Final Adjudication" requirement in the "deliberately dishonesty/fraud" exclusions in the policies. Here's how this exclusion typically reads (this excerpt is taken from a popular D&O policy in the marketplace):

The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against the Directors and Officers or, with respect to Insuring Agreement (C), the Company:

for, based upon, arising from, or in any way related to any deliberately dishonest, malicious or fraudulent act or omission or any willful violation of law by such Insured if a judgment or other final adjudication adverse to the Insured establishes such an act, omission or willful violation, provided this exclusion shall apply to Insuring Agreement (C), if granted, only if such judgment or final adjudication establishes that a Director or Executive Officer of the Company committed such an act, omission or willful violation;

Thus, the "deliberately dishonest/fraud" exclusion, which is at issue in practically every D&O claim and raised in the D&O carriers' coverage letters, can only be triggered by a "final adjudication" (e.g., a civil or criminal trial). This exclusion can be (and practically always is) completely eviscerated if the case is settled, and that is precisely why nearly all of these securities class actions settle. Consider this: Would you want to be the defense lawyer who recommends to your D&O clients that they go to trial and take a verdict, if it could potentially result in a jury finding the D&Os guilty of securities fraud, potentially bankrupting the company and eliminating all insurance coverage? It makes no difference that defendants may have a strong defense, because the downside risk is still too great.

A perfect example and very recent case on the above point was the AT&T securities class action, which last October went through the beginning stages of a trial in federal court in New Jersey. I suspect the reason that AT&T went to trial was negotiation brinkmanship on both sides, because the suit thereafter settled during the early stages of trial and thus avoided the possibility of an adverse verdict that could have eviscerated the D&Os' insurance coverage (again, if there was a "final adjudication" finding securities fraud, such as there was against Clarent's CEO).

Also worthy of note on the trial front was the Kerkorian/Tracinda vs. Daimler Chrysler bench trial in early 2004, which was not truly a "class" action (Kerkorian "opted-out" of the multi-million dollar settlement), but rather a battle of the corporate titans, Kerkorian and Schrempp. When I last checked, we were still eagerly awaiting the judge's decision.

John C. Minett, Esq.

I believe the Everex securities class action in the Northern District of California was tried to a jury verdict in 2002. The defendants prevailed.

Well, if it doesnt have to go to verdict to count, then there's the AT&T trial that settled in the middle of trial for $100 million last October.

Both Everex trials related to pre-PSLRA conduct and a pre-PSLRA complaint.