A Look Back at 2011 as We Head into 2012December 28, 2011
Ready for a New Year in litigation? Well, 2011 had some interesting developments in the securities arena, while preparing for 2012 means focusing on records management.
In the post Dodd-Frank world, the Securities and Exchange Commission (SEC) has enthusiastically brought actions against big and small violations at an unprecedented rate. The SEC filed a record number of cases in the fiscal year that ended Sept. 30. The SEC brought 735 cases in 2011, up from 677 cases in 2010. However, despite this increased number, the commission collected just $2.8 billion in penalties, which is slightly down from last year’s $2.85 billion.
Many of the cases brought in 2011 involved complex products, transactions and market practices, and were related to the financial crisis and insider trading.
Cases alleging breach of fiduciary duty in connection with a merger or an acquisition continue to be filed in large numbers. The number as of December of this year—61—has declined only slightly from last year’s total of 68 such suits. M&A objection lawsuits continue to be the single largest category of non-standard cases tracked by NERA (National Economic Research Associates).
In 2010, M&A cases took that top spot from credit crisis-related suits. Presently, the wave of credit crisis-related filings largely seems to have subsided. With 11 federal class actions filed in 2011 relating to the credit crisis, such litigation is approximately one-third of its level last year, when it had already declined by about two-thirds from its 2008 peak.
The percentage of suits alleging damages in connection with complex financial instruments such as mortgage-backed securities and collateralized debt obligations has also declined from the elevated levels observed over the past several years to levels consistent with those observed in 2005 and 2006.
The median settlement in 2011 fell to $8.7 million, below last year’s record high of $11.0 million, and lower than both 2009 and 2010, but still the third highest since the passage of the Private Securities Litigation Reform Act (PSLRA) in late 1995.
What should a business to do to get ready for 2012?
Think records management, advises Law Technology News:
- Update and enforce your records management protocols, inventory your existing records management policies and procedures, and update and draft protocols as needed to address your current business circumstances.
- Control your email. Do you have and enforce email retention policies, or does your company still have every email sent since it was formed?
- Designate a records clean-up day. With budget constraints and legal holds, not all records management protocols can be automated.
- Rethink disaster recovery because it’s important to balance disaster recovery goals with risk management agendas.
- Enforce compliance by training your workers about their specific roles and responsibilities regarding records management.
Happy New Year from Hornberger & Brewer!
Verdicts & Settlements
- $33 Million verdict Wrongful death action against O.J. Simpson
- $19 Million verdict Malicious prosecution action against Chinese importers
- $6.8 Million verdict Business fraud & conversion case representing a Russian company
- $6.5 Million settlement Breach of contract action against multinational corporation resulting in a $6,500,000.00 settlement
- $5.3 Million verdict Business fraud and breach of contract case
- $4.7 Million verdict Wrongful death / Fraudulent transfer case representing both American and Ukrainian residents
- $4.7 Million settlement Liver Transplant case for wrongful death of Saudi Arabian citizen
- $3.1 Million binding arbitration Personal injury's head on collision
- $2.0 Million settlement Fraudulent transfer case
- $2.0 Million settlement Independent Sales Organization for alleged breach of contract claim
- $1.75 Million settlement Shareholder in connection with corporation shareholder dispute
- $1.5 Million settlement Fraud and breach of contract case
- $1.5 Million Judgment Breach of contract and defamation action resulting in default judgment collected
- $1.3 Million verdict Employment and breach of contract case
- $1.2 Million verdict Misappropriation of trade secrets and indemnity claim
- $1.0 Million settlement Employment termination and breach of contract case
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