Sunday, June 2, 2013
Michael Klausner, Jason Hegland, and Matthew Goforth, all of Stanford Law School, have published on SSRN the first of two updates to earlier empirical studies of securities class actions, entitled "When are Securities Class Actions Dismissed, When Do They Settle, and for How Much? — An Update."
In this article, we briefly present some basic statistics on the timing of dismissals and settlements in securities class actions. In contrast to the popular image of securities class actions, we find that over half of all cases are either dismissed or settle well before discovery begins. 38% of cases are either dismissed with prejudice on the first motion to dismiss or are dropped before a second complaint is filed. Another 15% of cases settle either before the first motion to dismiss was ruled on or after an initial dismissal without prejudice. The article provides additional descriptive statistics on how securities class actions are resolved and the timing of their resolution.