Monday, May 01, 2006

PwC releases 2005 Securities Litigation Study

PricewaterhouseCoopers LLP today released their 2005 Securities Litigation Study. The study is available here (registration required). A press release is also available here.

Noting the "drop" in the number of new filings (see Bruce Carton's take on this trend as (with regard to the earlier Stanford / Cornerstone report) over at Securities Litigation Watch here), the study suggests a number of factors behind the decline in the number of new securities class action filings:

The first is the so-called printing-press factor (see quote from MoFo's Jordan Eth here), suggesting that:
the current backlog of major cases . . . already being handled by the plaintiffs' bar, consum[es] the time and resources of securities plaintiffs' lawyers and caus[es] them to delay new case filings.
The study also points to "the hoped-for deterrent effect of Sarbanes-Oxley," and "[m]ore vigorous investigation, enforcement, and prosecution by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ)" as possible factors in the decline.

Also, for those that may have missed it, The 10b-5 Daily had a post last week on NERA Economic Consulting's recently released study of class action securities litigation.

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