The 61 filings through June 30, 2006, is the lowest level for any six-month period since 1996. âThe majority of participants in securities class action suits are institutional investors who trade more than 0 million a year.It is also 36 percent lower than the 1996-2005 historical average of 194. They don't have to pay for any gains they made from selling the inflated stocks, and once they're compensated for their losses, they actually come out ahead,â Thakor said.PLUS:- Total integration throughout- Data migration for Quick Books upgrades- Complete security -- audit trail and employee access control - GAAP Compliant- Installation services- Wide range of training options- U.
More recently, Arthur Andersen's role in the Enron collapse and scandals has brought more attention to the role of accounting in litigation, as well as additional regulation.
In fact, the reduction in the number of class-action securities lawsuit filings is being attributed to the Sarbanes Oxley (SOX) Act of 2002 and the Class Action Fairness Act of 2005, by some experts.
If I'm a shareholder who bought stock before the period where stocks were inflated, I can't take part in the litigation, yet I will essentially be paying the settlement to those investors who did buy inflated shares,â continued Thakor. â Additionally, because significant resources are used to pay lawyers and accountants handling the litigation, the actual transfer of the payment is not a neutral process.
âIt's a process of taking money from one group of shareholders in the company and giving it to another for some wrongdoing by the company. Investors end up with maybe three cents on the dollar after all the expenses are paid.
In this study, Securities Class Actions Compared to Derivative Lawsuits: Evidence from the Stock Option Backdating Litigation on their Relative Disciplining of Fraudster Executives, 35% of the 151 stock option backdating litigation observations included private securities class actions (in addition to derivative lawsuits).