A healthy stock market is partly credited with a dramatic drop in new investor class actions. A Stanford University study found that, for the first half of 2006, the number of such lawsuits is on pace fall 36% from last year, when 179 were filed. In addition to the bull market – during which investors are unlikely to sue since they’re making money – other possible explanations for the decline include the fact that law firm of Milberg Weiss Bershad & Schulman, a leading securities class-action law firm, has been preoccupied with legal troubles of its own, and improved governance as the result corporate scandals. Authors of the study, which was prepared by Stanford Law School Securities Class Action Clearinghouse with Cornerstone Research, say it’s not clear yet whether the current struggling stock market would spawn another round of shareholder class actions.
