Securities Litigation Filings Plunge in '06

Per BNA's Class Action Litigation Report, vol. 8 no. 1 (1/12/97):

Securities class action filings dropped precipitously--by more than a third--in 2006 compared to 2005, hitting the lowest level since the adoption of the Private Securities Litigation Reform Act in 1995, according to separate studies released Jan. 2 by the Stanford Law School Securities Class Action Clearinghouse and NERA Economic Consulting.

Joseph Grundfest, a professor at Stanford Law School, told BNA he attributes the decrease in filings, which began in mid-2005, to stronger corporate governance and federal government enforcement of the securities laws, and a consequent decline in corporate fraud. "I think we are seeing the effects of a tougher and smarter campaign against white collar fraud by the [Securities and Exchange Commission] and the Justice Department," he said in a statement.

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