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When are Securities Class Actions Dismissed, When Do They Settle, and for How Much? — An Update

12 Pages Posted: 5 May 2013 Last revised: 23 Jul 2013

Michael Klausner

Stanford Law School

Jason Hegland

Stanford Law School

Matthew Goforth

Stanford Law School

Date Written: April 15, 2013

Abstract

In this article, we briefly present some basic statistics on the timing of dismissals and settlements in securities class actions. In contrast to the popular image of securities class actions, we find that over half of all cases are either dismissed or settle well before discovery begins. 38% of cases are either dismissed with prejudice on the first motion to dismiss or are dropped before a second complaint is filed. Another 15% of cases settle either before the first motion to dismiss was ruled on or after an initial dismissal without prejudice. The article provides additional descriptive statistics on how securities class actions are resolved and the timing of their resolution.

Keywords: Securities, Securities Litigation, Securities Enforcement, Settlement

JEL Classification: G30, G34, K22

Suggested Citation

Klausner, Michael and Hegland, Jason and Goforth, Matthew, When are Securities Class Actions Dismissed, When Do They Settle, and for How Much? — An Update (April 15, 2013). PLUS Journal, April 2013; Stanford Law and Economics Olin Working Paper No. 445; Rock Center for Corporate Governance at Stanford University Working Paper No. 145. Available at SSRN: https://ssrn.com/abstract=2260831

Michael D. Klausner (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
650-723-6433 (Phone)
650-725-0253 (Fax)

Jason Hegland

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Matthew Goforth

Stanford Law School

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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