2004 securities litigation cases already topping 2003

With the third quarter of 2004 presenting a record 69 new securities litigation cases being filed in the U.S., this year’s total number of cases has already reached the level achieved in all of 2003.According to PriceWaterhouse Coopers LLP, in an update of its 2003 Securities Litigation Study, the record number of filings in this third quarter is double that seen in the same period last year, and makes this the worst quarter since the inception of the Securities Litigation Uniform Standards Act in 1998.And, as of October 24, 2004, the number of filings this year had reached 175, the total figure for all of 2003. PWC says it is likely 2004 will see more than 210 cases filed before the year is out. The worst year thus far has been 2002, when corporate scandals such as Enron produced a total of 218 filings.”Shareholder litigation appears to be on the rise for a number of reasons,” says Charles Hacker, investigations and forensic services partner at PWC. “Although we continue to see litigation across all industries, there has been a significant rise in the number of foreign companies sued after a decline in 2003, and a resurgence in the number of cases against computer software, hardware and services companies. In an environment of heightened SEC/DOJ (Securities Exchange Commission/Dept. of Justice) activism, these factors and the continuing prevalence of accounting-related and ‘pharmaceutical efficacy’ cases have helped to produce a record volume of litigation this quarter.”He highlights, as well, the recent filing of class action cases against those in the insurance industry as a result of broker compensation investigations which produced dramatic stock drops for companies involved. However, accounting-related cases still rule the day, making up about 60% of all filings. “The passage of Sarbanes-Oxley appears to have had little affect on the pace of shareholder litigation,” Hacker says. “The total number of cases and the breadth of industries targeted continue to meet or exceed historical levels.”