Stanford law professor Michael Klausner, and his colleagues Jason Hegland and Matthew Goforth, have published an update to their 2011 studies reporting data on the timing of dismissals and settlements in securities class actions. In this latest update published in the April 2012 PLUS Journal, the authors address the factors that affect the timing of securities class action lawsuit dismissals and that affect the timing and size of securities suit settlements.
Klausner, Hegland, and Goforth's analysis uses statistics derived from all securities class actions filed between 2006 and 2010, 82% of which have been resolved one way or another, and 18% are still open. The sample size consisted of 653 cases, of which 253 have settled, 206 were dismissed with prejudice (preventing their refiling), 74 were voluntarily dropped by the plaintiffs, and 119 are ongoing. The authors followed the progress of each case through the motion to dismiss stage, and their analysis reveals some interesting trends in these class action securities cases. Chief among their findings is that more than 50% of all securities class action lawsuits “end well before discovery and before even a second complaint is filed,” and just under 60% settle during the discovery phase.