Securities Suits Expanding To Fresh Areas: Advisen

Securities Suits Expanding To Fresh Areas: Advisen - 2/25/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Securities Suits Expanding To Fresh Areas: Advisen
Mark A. Hofmann - Business Insurance

Securities Docket. February 25, 2009
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EXCERPT: The legal landscape for directors and officers and their liability insurers could change this year, according to a report released Wednesday by New York-based Advisen Ltd. The report—"Securities Litigation in 2008: Implications for the D&O Market in 2009 and Beyond"—said new challenges have arisen even though the number of securities class action suits filed in 2008 changed little from 2007. For example, the fall of two major law firms that specialized in representing plaintiffs in securities suits created "intense competition among new law firms advocating novel theories of liability," according to the report. In fact, "traditional securities class action suits accounted for less than half of new securities litigation, while suits alleging common law torts, contract law violations, breach of fiduciary duty and violations of rarely cited securities laws became more common. Defense costs rose relentlessly," according to the report. The Advisen report noted that a handful of insurers writing the majority of financial institutions' D&O premiums suffered from the financial services-related D&O litigation, but "other D&O underwriters were comparatively unscathed. Thus far, 2009 is following a similar pattern with financial institutions continuing to bear the brunt of not only subprime/credit crisis suits, but also of suits triggered by the alleged $50 billion Bernard Madoff Ponzi scheme and other alleged investor frauds."

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