Fewer securities class actions in 2006

The number of federal securities litigation class actions hit a record low of 106 cases last year compared to 169 in 2005, although settlement values remained high, according to a PricewaterhouseCoopers study released today. Twenty-eight of the 99 settlements in 2006 settled for $20 million or more, compared to 32 in 2005 and 23 in 2004, according to the PricewaterhouseCoopers’ 2006 Securities Litigation study. The technology sector leads in private securities class actions, with 31% of the federal cases involving high-tech companies in 2006, compared to 29% in 2005 and 31% in 2004. Hedge funds enforcement actions from the Securities and Exchange Commission were down in 2006 compared to 2005, according to the report. Enforcement actions were brought against hedge funds for fraud and other securities violations in 13 instances in 2006, down from 23 cases in 2005. Large institutional investors as lead plaintiffs accounted for about 94% of the total settlement dollars. That includes large union pension funds, public pension funds and mutual funds. Fortune 500 companies faced fewer class actions suits in 2006, making up only 11% of the total federal securities class action suits filed in 2006, down from 15% in 2005 and 13% in 2004.