Securities Class Actions Down:
The number of securities-related class-actions dropped sharply in 2006, according to a report issued jointly by Stanford Law School and Cornerstone Research. Investors filed 110 class-action lawsuits involving securities issues last year, a 38% decline from the 178 filings in 2005 and the lowest number since Congress passed securities class-action reform legislation in 1995. Twenty of those 110 lawsuits involved companies that allegedly violated securities rules by backdating stock options. Why the drop? In part, say legal experts, it’s because Sarbanes-Oxley has caused companies to exercise greater care in reporting their financial results. Here’s the story from the WSJ.
Corporate Legal Bills Up:
Corporate legal bills spiked almost 20% this year and could increase by a further 9% in 2007, according to a survey of Fortune 1000 companies by the BTI Consulting Group. Total spending on outside counsel reached $56.4 billion in 2006. The average company in the BTI survey spent $19.5 million on outside lawyers, nearly double the $10.5 million average only five years ago. And outside lawyers now account for 65 per cent of corporate legal spending by large firms, compared with 42 per cent in 2001. Here’s the story from the Financial Times.