Tallying Up the Securities Class Action Trials
We have updated (again) our presentation detailing the 19 securities class action cases that have gone to trial since 1996.
The cases fall into three categories:
1.Securities Class Action Trials Based on Post-Reform Act Conduct Resulting in a Verdict at Trial (five)
2. Securities Class Action Trials Based on Post-PSLRA Conduct Resulting in a Settlement or Summary or Default Judgment During Trial (seven)
3. Securities Class Action Trials Based on Pre-PSLRA Conduct Resulting in a Verdict at Trial (six)
Note that we have not yet added the Apollo Group case to the presentation, but will do so when it fits into one of our three categories.
Thanks to Jay Eng of Berman DeValerio Pease Tabacco Burt & Pucillo for reminding us of the Heartland High-Yield Fund trial from 2005.
As always, readers are encouraged to send in any updates, additions, or corrections.
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November 27, 2007 |
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And the Verdict is...Defense
According to news story from Reuters (here) and the AP (here), the jury in the JDS Uniphase trial has delivered a defense verdict after hearing nearly three weeks of testimony.
There have been 19 securities class action trials since 1996, but this is only the 5th post-PSLRA case tried to a verdict. Our updated securities class action trial list will be available here shortly.
Stay tuned for more developments in the Apollo Group trial.
UPDATE: The Recorder has an article, here, and both The D&O Diary and The 10b-5 Daily have posts on the verdict.
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November 16, 2007 |
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Lightning Really Does Strike Twice
We spilled a whole of ink (well pixels) last month discussing the newest addition to that rarified group - the securities class action that has gone to trial.
Well, add another one to the list.
While reviewing Apollo Group's (NASDAQ: APOL) recent 10-K last night, we noticed the following blurb with respect to the securities class actions that were filed against the company and certain officers and directors back in October 2004:
The court denied both summary judgment motions on September 12, 2007. The case remains set for trial on November 14, 2007.
We then sped over to the U.S. District Court for the District of Arizona's website and looked up the calendar of Judge James A Teilborg, and sure enough, jury selection was on the calendar for November 14. A quick look at the docket revealed that a jury was selected and empaneled.
For those keeping score at home, the Apollo Group litigation is only the 18th securities class action to go to trial since 1996.
The Policemen's Annuity and Benefit Fund of Chicago is the lead plaintiff and Barrack, Rodos & Bacine is lead counsel. Gibson, Dunn & Crutcher and Snell & Wilmer are defense counsel.
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November 12, 2007 |
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Class Actions Above Historical Levels
As recently noted by Kevin LaCroix over at The D&O Diary, new case filings are not only up dramatically from the artificially low levels that we saw in 2005 and 2006, they are in fact ABOVE historical levels.
But the numbers are even more striking than first reported. During the period from August 1, 2007 through October 31, 2007, there were at least 65 new federal securities class actions filed, and possibly as many as 68.
That translates into between 260 and 272 new federal securities class action filings per year.
Compared to the historical averages that have been reported by Stanford/Cornerstone (193 per year from 1996-2006) or PwC (218 per year from 2002-2006) that represents an annualized increase over historical levels of between 19 and 41%.
I hesitated to use an equivocation phrase such as "at least" in my figures, especially given that my research team is focused on rooting out securities class actions wherever they may be in the four corners of the world, but there is a rational reason for giving a range instead of a hard number.
Two of the cases, Countrywide Financial Corp. (NYSE: CFC) and RAIT Financial Trust (NYSE: RAS), have companion "niche" cases that were brought on behalf of purchasers of only a specific type of securities. These types of cases are generally consolidated into the broader class action. Occasionally, but not always a lead plaintiff or class representative is appointed on behalf of the niche class. See generally In re Cendant Corp. Litig., 182 F.R.D. 144 (D.N.J. 1998) (appointing a separate lead plaintiff to represent PRIDES purchasers, but declining to appoint a separate lead plaintiff to represent options purchasers).
In the case of Countrywide, the niche case is on behalf of purchasers of Capital V Preferred Stock, and in the case of RAIT Financial, the niche case is on behalf of purchasers of Series A, B, and C Preferred Shares.
In any event, the return to historical levels of securities class action activity appears to have gone on for long enough to be a bona fide trend, and the death notice of the securities class action can safely be tucked away for now. If only we could do the same for buried notice...
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November 7, 2007 |
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When Opting Out Is Really Opting In
Much has has been written over the last few years about institutional investors excluding certain higher profile securities class actions to file individual or group actions. The process is of course known as "opting out."
But what do you call someone who was never in the case, and files an individual or group action?
That is the altogether predictable consequence of the somewhat controversial class certification decision issued earlier this year in In re Vivendi Universal, S.A. Securities Litigation, No. 02-5571 (S.D.N.Y.), by Judge Richard J. Holwell.
That decision, which certified a class of investors "from the United States, France, England, and the Netherlands" that purchases ordinary shares or American Depository Shares of Vivendi, implicitly and explicitly excluded investors from other countries, notably Germany and Austria.
A number of large international institutional investors that were excluded from the class definition have now started to file individual or group actions in the United States.
The first post-class certification action was filed on behalf of Capitalia Asset Management Sgr, S.P.A. and Capitalia Investment Management S.A. just three months after Judge Holwell's decision. Capitalia Asset Management Sgr, S.P.A et al v. Vivendi Universal, S.A. et. al., Case No. 1:07-Cv-05742 (S.D.N.Y., complaint filed June 15, 2007). The Capitalia entities are represented by Labaton Sucharow.
The Capitalia complaint was followed by more than a dozen others, covering a virtual who's who of European institutional investors.
A copy of one of the group complaints can be found here.
Below is a list of the international institutional investors that have filed individual or group actions and the law firms that represent the investors.
(Last Updated 2/22/08)
Diaz, Reus, Rolff and Targ, LLP and Grant & Eisenhofer, P.A.
Andra AP-Fonden
Alte Leipziger Trust Investment-Gesellschaft mbH
Bayern-Invest Kapitalanlagegesellschaft mbH
Deka International S.A. Luxemburg
Deka Fundmaster Investmentgesellschaft mbH
Deka Investment
Deka International (Ireland) Limited.
Frankfurter Service Kapitalanlagegesellschaft mbH
Helaba Invest Kapitalanlagegesellschaft mbH
HSBC Trinkaus & Burkhardt AG
Internationale Kapitalanlagegesellschaft mbH
Ifos Internationale Fonds Service AG
MEAGMunich Ergo Assetmanagement Gmbh
MEAG Munich Ergo Kapitalanlagegesellschaft mbH
Meltzer Investment Gmbh
Meltzer Ireland, Ltd.
Nordcon Investment Management AG
Norges Bank
Swiss Life Asset Management AG
Swiss Life Funds AG
Swiss Life (Belgium) S.A.
Swiss Life Asset Management Gmbh
Swiss Life Holding AG
Swiss Life Asset Management (Nederland) B.V.
Swiss Life Investment Management Holding AG
Tredje AP-Fonden
Labaton Sucharow
AGF Asset Management, S.A.
Aletti Gestielle SGR S.p.A.
Caisse de Depot et Placement du Quebec
Capitalia Asset Management Sgr, S.P.A.
Capitalia Investment Management S.A.
Eurizon Capital SGR S.p.A.
Irish Life Investment Managers Limited
Italfortune International Fund
Novara Aquilone Sicav
Motley Rice
Baden Wurttembergische Investmentgesellschaft mbH
Deutsche Asset Management Investmentgesellschaft mbH
DWS Austria Investmentgesellschaft mbH
DWS Investment Gmbh
DWS Investmentgesellschaft mbH
Erste-Sparinvest Kapitalanlagegesellschaft mbH
Forsta AP-Fonden
Fortis Investment Management SA
Indexchange Investment AG
KBC Asset Management NV
Landesbank Berlin Investment Gmbh
LRI Landsbank Rheinland-Pfalz International S.A.
Oppenheim Asset Management Services S.A.R.L.
Oppenheim Kapitalanlagegesellschaft mbH
Pioneer Investment Management Ltd.
Pioneer Investments Kapitalanlage-Gesellschaft mbH
Pioneer Investments Austria Gmbh
Raiffeisen Kapitalanlage-Gesellschaft mbH
SEB Investment Mangement AB
Skandia Insurance Company Ltd.
Union Asset Mangement Holding AG
Universal-Investment-Gesellshaft mbH
Wiener Städtische AG Vienna Insurance Group
Schiffrin Barroway Topaz & Kessler
AFA Livforsakringsaktiebolag
AFA Sjukforsakringsaktiebolag
AFA Sjukforsakringsaktiebolag (On Behalf Of Kollektivavtalsstiftelsen Trygghetsfonden TSL)
AFA Trygghetsforsakringsaktiebolag
Alecta Pensionsforsakring Omsesidigt
Allianz Global Investors Ireland Limited
Allianz Global Investors Kapitalanlagegesellschaft mbH
Allianz Global Investors Luxembourg S.A.
AMF Pension Fondforvaltning AB
Arbetsmarknadsforsakringar
Arbejdsmarkedets Tillaegspension
Arca SGR S.P.A.
Danske Invest Administration A/S
Famandsforeningen Pensam Invest
Fjarde AP-Fonden
Industriens Pensionsforsikring A/S
Pensionsforsakringssktiebolag
Pensionskassernes Administration A/S
Sjunde AP-Fonden
Swedbank Robur Fonder AB
Varma Mutual Pension Insurance Company
We will keep a running tally of the non-class Vivendi cases, so check back for updates.
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November 6, 2007 |
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And the envelope please...
Earlier today we released our first-ever Securities Class Action Services (SCAS) 50 Power Rankings report, which highlights the top 50 plaintiffs law firms by dollar value of securities class action settlements and number of securities class action settlements from 2003 to 2006 in which the law firms served as lead or co-lead counsel.
The report is based on SCAS 50 data from the past four years, since we began publishing the SCAS 50 reports on an annual basis, but introduces the SCAS 50 Power Rankings, which are based on the position of each firm for each SCAS 50 survey year. The top five firms in the SCAS 50 Power Rankings were:
1. Bernstein Litowitz Berger & Grossman
2. Milberg Weiss
3. Coughlin Stoia Geller Rudman & Robbins
4. Barrack, Rodos & Bacine
5. Grant & Eisenhofer
Bernstein Litowitz also has the distinction of having placed first or second in each of the previous four surveys.
We also looked at the cumulative dollar value of securities class action settlements from 2003 to 2006. The top five law firms by settlement value were:
1. Coughlin Stoia Geller Rudman & Robbins
2. Bernstein Litowitz Berger & Grossman
3. Barrack, Rodos & Bacine
4. Millberg Weiss
5. Heins Mills & Olson
Of interest, Heins Mills & Olson made the list largely on the strength of a single settlement - the $2.5 Billion AOL Time Warner settlement in 2006. That settlement is one of the five largest securities class action settlements since the PSLRA was enacted.
The top ten firms in terms of number of settlements accounted for more than sixty percent of the securities class action settlements during 2003 to 2006. The top five law firms in terms of number of securities class action settlements were:
1. Millberg Weiss
2. Coughlin Stoia Geller Rudman & Robbins.
3. Schiffrin, Barroway, Topaz & Kessler
4. Berger & Montague
5. Bernstein Litowitz Berger & Grossman.
The full report is available here, Download file.
Thanks to the entire SCAS research team for the assistance and a special thanks to Brad Horgos for pulling the laboring oar on this report.
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