Valuing Securities Fraud Lawsuits

/ 31.Jul, 2012

A new study has attempted to create a viable model to determine settlement amounts for securities fraud lawsuits.  As an article on the study in Forbes Magazine notes, this is an area of particular interest as securities class actions represent 35-40% of all class actions and 75% of all money paid out to settle such cases, running to billions of dollars a year.  The most interesting aspect of the article (to me) is the concept that there is a “rational settlement marketplace.”  This is a concept that lawyers and insurers deal with on a daily basis in valuing cases, but few lawyers have ever studied empirically, other than looking at jury verdict amounts (at least to my knowledge).

-Josh J.T. Byrne, Esquire