A NERA Economic Consulting report found “an explosion” of securities of securities lawsuits, which were filed at a “record pace” in 2017, reports D&O Diary.
The total of 432 securities suit filings in 2017 was the most in any year since 2001, and was 84 percent higher than the average of the past five years. Almost half (46 percent) of these lawsuits were merger objection suits. Given the high number of total filings, there was an 8.2 percent chance that a U.S.-listed company would be hit with a securities class action or merger objection lawsuit. There was a 5.7 percent chance of facing a securities lawsuit in 2016.
The growth of securities litigation combined with the decline in publicly traded companies may trigger a policy change. Bloomberg reported on Friday that the U.S. Securities and Exchange Commission may consider allowing some of these suits to go to arbitration.