SECURITIES LITIGATION IN THE UNITED STATES

In many respects 2013 was a notable year for securities litigation and enforcement, which was able, to some degree, to move beyond the fallout from the financial crisis and focus on other enforcement activities. Since the onset of the global financial crisis in 2008, cases related to the credit crisis have dominated securities litigation and related enforcement activity, not only in the US but also abroad.

Many, if not all, facets of business within the financial sector have been massively impacted over the last five years. However, in 2013, for the first time there was a marked drop off in the number of credit crisis related cases filed. In recent years, the overwhelming majority of cases have been related to mortgage backed securities derived from the credit crisis. However, as statutes of limitations have expired for private securities class actions, the number of these types of cases finally decreased in 2013 – a trend likely to continue in the future, particularly over the next two years.

For the first time in a number of years, it appears that regulators may be able to focus more fully on issues outside of the financial crisis. Many of the regulatory bodies that boosted their staffing levels in the wake of the financial crisis will now begin to tentatively redistribute some members of staff, allowing them to target enforcement activity in other areas. Mary Jo White, the newly appointed chairwoman of the Securities and Exchange Commission (SEC), has already noted that many SEC regulators will now be turning their attention to other areas of enforcement activity, although cases related to the financial crisis will remain a priority for many.

Apr-Jun 2014 issue

Richard Summerfield