February 01, 2017

Securities class action filings last year rose to the highest level in 20 years, according to a Cornerstone Research and Stanford Law School Securities Class Action Clearinghouse report released Jan. 31.

There were 270 securities class lawsuits filed in 2016, 82 more than in the previous year, and 44 percent above the 1997-2015 historical average of 188 filings, the report said. The increase was largely due to 80 suits over merger and acquisition transactions, more than four times more than in 2015, according to the report. The number of M&A filings in 2016 marks the highest number of federal filings in a single year since 2009—the year the report began tracking them separately.

The report also showed an increase in the number of filings against foreign issuers. Suits against European issuers, in particular, rose to a 20-year high, with 15 filings in 2016.

Washington lawyer Daniel S. Sommers of Cohen Milstein Sellers & Toll PLLC told Bloomberg BNA in an e-mail that he isn't aware of any systemic factors that may have contributed to the increased number of filings against non-U.S. issuers. The increase is most likely driven by company-specific factors, he said. Sommers added that “anecdotally,” he has noted an increase in the number of cases against non-U.S. issuers based on alleged antitrust or Foreign Corrupt Practices Act violations.

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