2008 Saw High Numbers of Securities Class Action Lawsuits
When you look back at 2008, ending with the Madoff investment fraud, it is not surprising that securities attorneys had a busy year. Considering 2009's big start with the Stanford financial fraud exposed, it looks like this years numbers may not be far behind.
A total of 210 securities class action lawsuits were filed last year, of these, 103 were filed against the financial services sector. That is a huge increase from the annual average of 26 lawsuits filed in previous years. .jpg)
According to Business Insurance, contrary what you might expect, most of these lawsuits were not filed in the latter half of 2008, when the extent of the credit crisis became clear. Rather, most of the cases were filed in the first half of the year, before the words "Bernie Madoff" and "investment fraud" became such a familiar part of our lexicon. The reason for this is that most of the biggest firms involved in the credit crisis, had lawsuits filed against them in the beginning of the year. In fact, according to Cornerstone Research of Boston, 9 of the 10 biggest financial firms were sued before December 2008. This was before the Bernard Madoff investment fraud came to light. 18 cases against him were filed in January.
The average securities class action settlement in 2008 was down to $7.5 million from $9.4 million the previous year. However, the percentage of settlements in excess of $100 million increased to 8% in 2008, from 6% in 2005. It’s been a bad year for banks, who are not only besieged by large numbers of class action lawsuits, but are also struggling to survive. Of the 25 banks that collapsed in 2008, five have been sued.
Securities Attorneys
It is impossible for insurance companies, investors and investment fraud lawyers to predict frauds like Madoff's scheme, or the Stanford Financial CD bubble that recently burst. Scams like these are being exposed at an alarming rate and with months or years to go before the credit squeeze is expected to slacken, we can anticipate more frauds coming to light.
If you have lost money in the Bernard Madoff scam or the Stanford Financial Group fraud , contact a securities attorney at Arnold & Itkin LLP to discuss your case.
