If you think that publicly traded corporations are getting sued in federal class action securities fraud cases just about every day that the stock market is open -- you're right.

According to statistics maintained by the Stanford Securities Class Action Clearinghouse, http://securities.stanford.edu, at least 235 companies were named as defendants in federal class action securities fraud lawsuits filed in 1998. That volume of litigation breaks the prior record of 227 companies sued in 1994. It also indicates a litigation rate of close to "one-a-day" for every trading day that the stock market is open.

The recently ended year also witnessed several situations in which individual corporations were subject to a large number of federal class action securities fraud complaints. Cendant Corp., which was the defendant in at least 70 class action securities fraud complaints, holds the dubious honor of being the most frequently sued company in 1998.

People frequently ask why the Private Securities Litigation Reform Act of 1995 has not reduced the volume of litigation. You get dramatically different answers to this question depending on whether you pose it to plaintiffs or defendants," explains Professor Joseph A. Grundfest, a former SEC Commissioner who is Principal Investigator for the Stanford Website.

According to Professor Grundfest, "Plaintiffs claim that fraud is common in today's stock market and point to many examples of accounting restatements and trading by corporate insiders while a fraud was allegedly alive in the market. Defendants claim that honest conduct in volatile markets is often mistaken for fraud, and that some courts have failed to implement the Reform Act properly because they don't subject plaintiffs' complaints to sufficiently searching scrutiny."