According to a study released by NERA Economic Consulting this week, the number of shareholder class-action lawsuits rose sharply during the first half of 2008, largely due to a surge in cases resulting from the subprime mortgage crisis.

NERA reported that filings are on pace to reach almost 280 by year’s end, which would represent a 42 percent increase over 2007 and the largest annual total since 2002. The company’s data revealed that more than half of 2008 filings were based on allegations related to the subprime collapse, including auction-rate securities cases.
The authors of the NERA report noted that although filings increased dramatically, average settlement values remained roughly constant at around $30 million. They added that the average settlement amount may begin to rise however, as large numbers of recently filed cases are settled.
NERA also said that median investor losses – which are a strong determinant of settlement size – for cases filed in the first half of 2008 were more than twice the level of cases settled between 2005 and 2007, and for subprime cases, the average loss was $4.5 billion.
To view NERA’s full report, click here.