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NERA study on securities class actions

According to a recent NERA study, the annual probability of a company facing a securities suit that survives a motion to dismiss is 1.2%—only slightly lower than it was before the PSLRA passed. One difference is that nuisance settlements have gone down: more companies are fighting, and getting their cases dismissed. Plaintiffs have apparently responded to the reform by filing more lawsuits and by bringing more lottery-style cases: gigantic multi-billion dollar suits against deep-pocketed outside co-defendants, such as banks in the WorldCom and Enron cases. The ten largest settlements have all taken place since 2000. (via Roberts).



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.