Friday, August 1, 2008

Securities Fraud Class Action Suits on the Rise

After hitting a 10 year low in 2006 the number of securities fraud class action suits has been continually rising. Industry experts believe that this is a result of the subprime-mortgage losses, in addition to the unpredictability ruling the stock market currently. The International Herald Tribune reported that according to a study conducted by Stanford Law School Securities Class Action Clearinghouse and cornerstone research, half of the suits filed were related to subprime and other credit losses. Cornerstone VP, John Gould, commented that “The numbers are high” adding that “They are approaching the number we saw in 2000 to 2002.” During those years, the explanation for the record setting numbers was as a result of the collapse of Enron. At that time there were 267 stock fraud suits filed just for 2002.

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