Subprime-Related Securities Litigation: An Interim Update

Subprime-Related Securities Litigation: An Interim Update - 9/9/2009

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Subprime-Related Securities Litigation: An Interim Update
Kevin LaCroix

The D & O Diary. September 9, 2009
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EXCERPT: It is now over three and a half years since the first subprime-related securities class action lawsuit was filed in February 2007, yet many of the cases filed as part of the ensuing litigation wave are still only in their earliest stages. But there have been some important developments recently – for example, the Eighth Circuit’s recent decision affirming the dismissal of the NovaStar Financial subprime lawsuit – suggesting that the evolving litigation wave may have reached a passed a significant milestone. With that possibility in mind, it seems appropriate to check in for a status report on the subprime and credit crisis-related litigation wave. Filing levels There have now been a total of 199 subprime and credit crisis-related securities class action lawsuits, of which 57 have been filed so far in 2007. A compete list of the lawsuits can be accessed here. While the subprime and credit crisis securities suits continue to be filed, in recent months the pace has definitely slowed. Of the 2009 filings, the bulk of them were filed in the first quarter, and there have only been a handful since April. Of course, the pace of filling activity could return at any time, but at least at this point there seems to be some possibility that the subprime and credit crisis litigation wave may have already crested. Another circumstance suggesting that the litigation wave may be ebbing is changing mix of companies that are the targets of the latest securities class action lawsuits. In the first half of the year, approximately two thirds of the new securities lawsuits involved companies in the financial sector. But of the 37 new securities lawsuits filed in July and August 2009, only 13, or slightly more than a third, involved companies in the financial sector.

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