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ResearchNew low for US class action lawsuits in 2006
Only 110 class action lawsuits were brought in the US during 2006, the lowest since the passing of the Public Securities Reform Act in 1995 - a piece of legislation designed to cut the number of securities lawsuits filed, according to a study by Stanford Law School and Cornerstone Research.
Last year’s figures were down 38% from the 178 class actions filed in 2005 and 43% from the ten year historical average of 193. The report suggested this reduction may be related to more rigorous regulatory enforcement, the Sarbanes-Oxley legislation discouraging companies from engaging in risky behaviour, and low volatility in US stock prices.
Peter Montagnon, Association of British Insurers director of investment affairs, writing in the Financial Times (5 January), took a dim view of the US infatuation with class action litigation. These lawsuits, he argued, can also interfere with governance in other jurisdictions.
Links2006 Filings: A Year in Review Association of British Insurers
February, 2007 |
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