Media Coverage
Source: IBA Global Insight
Media Coverage
02.01.13
David Keyko, a partner in Pillsbury’s litigation practice in New York, is quoted in an article about the decline in securities fraud class action lawsuits.
“Legislation has changed the dynamic of the way cases are brought,” he explained. “In the past, whichever group claimed first became the lead plaintiff and their lawyers were the counsel. Now, the class action groups have a choice who leads the case, and that means lawyers take care looking at which of those claims are good ones to invest money in.”
Proof of loss has made it more onerous on people bringing forth cases, according to Keyko. Claimants have to show that the losses that they have suffered have arisen intentionally, which is difficult to do. “If you have to prove ‘loss causation,’ it means that bad behavior must have caused the loss, not a drop in the stock market, for example,” he said.
“Plaintiffs can make defendants spend vast amounts of money getting electronic records,” Keyko added, “and oftentimes this drives a settlement.” While insurance tends to cover defendant legal costs, there is no such cover for plaintiffs. That may be why so few class action cases ever go to trial.