Chubb Releases Report on the Rising Tide of Securities Class Action Lawsuits
Download the report here
New York – June 11, 2019 – Chubb today released a new report on the rising volume of securities class action lawsuits, which have more than doubled in the last four years. The report, From Nuisance to Menace: The Rising Tide of Securities Class Action Litigation, examines the origin, scope and cost of securities class actions, as well as pragmatic proposals for reform. The report features proprietary Chubb claims analysis and perspectives from some of the top securities lawyers in the U.S.
The data and insights in the Chubb report add to growing research about the costs to business and society from meritless securities class actions. In 2017 and 2018, the number of securities class actions filed in federal court broke new records each year, and the volume has doubled since 2014, according to NERA Economic Consulting. Last year, Cornerstone Research found that an average of one in 12 public companies was the target of a securities class action. Among S&P 500 companies, the likelihood was one in 10.
“There is a growing cohort of lawyers filing meritless lawsuits in federal and state courts across the United States every time a merger or acquisition is announced or a corporate misfortune impacts a company’s share price,” said John Keogh, Executive Vice Chairman and Chief Operating Officer of Chubb. “The financial rewards from these lawsuits are accruing not to harmed investors but to lawyers who are bringing cases of dubious merit in order to reap a windfall in legal fees and a disproportionate share of settlement dollars.”
Read the full press release here.
The kinds of abuses that led Congress to act in the 1990s have returned, as a new and rapidly growing segment of the plaintiffs’ bar has found fresh ways to bring lawsuits against businesses, collect fees and reap a disproportionate share of the benefits.
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In the News
- Insurance Exec to General Counsel: Help Fight Meritless Securities Suits or Pay More, law.com, 6/11/19
- Chubb charts rise in investor lawsuits in US and questions merit, intelligent insurer, 6/11/19
- Squeezed by Class-Action Suits, Insurers Are Finally Responding, Bloomberg, 5/15/19
- Foreign Firms Face Climbing D&O Insurance Premiums, Wall Street Journal, 4/15/19
- Rising tide of lawsuits against company directors hits insurers, Financial Times, 4/1/19
- US Chamber's Legal Arm Calls for Reform of Explosive Securities Class Action System, law.com 2/26/19
- Chubb Panel Seeks Legal Changes to Curb M&A Class-Action Suits, Best's News Service, 6/11/18
- Securities Fraud Class Actions Must Be Curtailed, Attys Say, Law360, 6/11/18
- U.S. Chamber wants Congress to restrict securities class actions, Reuters, 10/24/18
- U.S. Chamber says SCOTUS must kill M&A class actions, Reuters, 11/14/18
Other Resources
Other Resources
- Cornerstone Research Securities Class Actions Filings 2018 Year in Review
- NERA Economic Consulting Report January 29, 2019
- Andrew J. Pincus, A Rising Threat: The New Class Action Racket That Harms Investors and the Economy, U.S. Chamber Institute for Legal Reform (Oct. 24, 2018)
- Andrew J. Pincus, Containing the Contagion: Proposals to Reform the Broken Securities Class Action System, U.S. Chamber Institute for Legal Reform (Feb. 25, 2019)
- Stephen J. Choi, Jessica Erickson and Adam C. Pritchard, Risk and Reward: The Securities Fraud Class Action Lottery, U.S. Chamber Institute for Legal Reform (Feb. 2019)
- Andrew J. Pincus, Unstable Foundation: Our Broken Class Action System and How to Fix it, U.S. Chamber Institute for Legal Reform (October 2017)
To view the Chubb-hosted 2018 Securities Class Action Reform Panel Discussion click here: https://news.na.chubb.com/spotlight-1