Accounting Class Action Lawsuits Increased

According to a study from Cornerstone Research.  Fewer class-action lawsuits alleging accounting improprieties were filed last year in the United States, but those that were settled in 2012 carried a higher price tag.

As two major trends driving accounting class actions faded -- the credit crisis and Chinese issuers listing on U.S. exchanges -- new filings dropped to 45 in 2012 from 78 in 2011, said Cornerstone, which provides economic and financial consulting and expert testimony to attorneys.

according to a study from Cornerstone Research. related cases.

Cases that named an audit firm as a defendant were especially costly, settling for more than three times as much as those that did not, Cornerstone said.

Joseph Grundfest, a former SEC commissioner who now directs the Stanford Law School Securities Class Action Clearinghouse, which Cornerstone works with, said the lesson from the findings is corporate leaders should pay close attention to the numbers.

 

"Courts care about accounting fraud," he said.

Posted by Diane Araga, on April 19, 2013 at 9:00 AM