After a large increase in federal securities class actions in 2008, U.S. companies can expect to be under even more intense scrutiny by regulators and enforcement agencies this year as the global financial crisis unfolds. A great deal of corporate greed and fraudulent conduct has been uncovered. In its 2008 Securities Litigation Study released on April 16th, PricewaterhouseCoopers points out that 210 federal securities class actions were filed in 2008, a 29% increase from the 163 case filings a year earlier. It was said that 48 percent of all cases were in the financial services sector.
The study shows that the Securities and Exchange Commission and U.S. Department of Justice had an unprecedented number of Ponzi schemes on its radar last year. The SEC tracked 70 Ponzi cases between 2007-2008 and the Commodity Futures Trading Commission reported that it followed twice as many leads in possible Ponzi cases last year as was the case in 2007, resulting in prosecution in 15 cases.
Eighteen percent of lawsuits were filed against Fortune 500 companies, up from 12 percent in 2007. In addition, the number of class actions filed against foreign companies listed on U.S. stock exchanges reached an all-time high of 36 in 2008, up from 27 a year earlier. According to the study, three areas in which companies should be particularly watchful in the next few years are: Institutional-Plaintiff activity, particularly related to public and union pension funds; internal controls accounting-related allegations, and Foreign Corrupt Practices Act enforcement. Jay Aughtman, Scarlette Tuley, and Dee Miles are handling cases dealing with these sorts of securities cases. If you want more information you can contact them at 800-898-2034 or by email at Jay.Aughtman@beasleyallen.com, Scarlette.Tuley@beasleyallen.com or Dee.Miles@beasleyallen.com.
Source: New Mexico Business Weekly
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