Based on the recent Stanford/Cornerstone report (discussed here), the NY Times and the WSJ Law Blog are now asserting and ruminating upon the meaning of the "sharp decline in the overall number of securities fraud class actions" in 2005. It is amazing to me how many people have now written essentially the same, incorrect, thing based on the shall we say "imprecise" press release that accompanied the report. According to Stanford's Prof. Grundfest himself, the noteworthy finding of the report was the significant decline in total market capitalization losses, not the insignificant decline in the number of cases filed.
Let me say this one final time, after which I'll stop because (a) no one is listening to me anyway, and (b) the geek-factor of this "debate" is off-the-meter: nobody believes that there was a "significant" or "sharp" or "steep" decline in securities class actions last year. That includes nobody from Stanford or Cornerstone, I believe.
Please look at the chart below from page 3 of the report. The number of filings goes up and the number goes down, within a very narrow range. Did it go down slightly in 2005? Yes. Does the slight decline in 2005 look just like the slight declines in 1999, 2001, 2003? You tell me.
The next person who writes about the sharp decline in 2005 is On Notice. I mean it.