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| 2001 News and Press Releases |
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HEADLINE ARCHIVED:
Zealous Institutions Drive Up D&O Settlement
By: Susanne Sclafane
National Underwriter, Property & Casualty/Risk & Benefits Management Edition. December 3, 2001
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Excerpt: With the noise of IPO laddering claims figuring into this year's statistics, there isn't total agreement about whether the level of more traditional securities cases in 2001 will be slightly up or slightly down from last year. But the dismissal rate of such cases is no longer rising and settlement values are ballooning, according to a plaintiffs' attorney. "I believe the trends are positive for plaintiffs' securities class action litigation -- and, conversely, negative for your industry," Sherrie Savett, managing principal for Berger & Montague in Philadelphia, told insurers and brokers gathered at the annual meeting of the Professional Liability Underwriting Society in November. "When the year is out, I think you'll see approximately the same number of cases" as last year, excluding laddering cases, she said, putting the range for the last few years at somewhere between 225 and 265 per year. A 2001 phenomenon, laddering cases by themselves might also swell from 180 to 250, defense attorney Tower Snow Jr., of Brobeck, Phleger & Harrison in San Francisco, reported at the same PLUS session. Laddering cases have been filed against securities underwriters of initial public offerings, the companies that had offerings, and their directors and officers. Such cases allege that allocations of IPO shares were made in exchange for excessive commission payouts to securities underwriters or in connection with undisclosed agreements to buy more shares in the exchange trading market.
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