First the good news - there aren't a whole lot of options backdating cases left.

Now the bad news - we have to update the numbers again, with the settlement earlier this week of the options backdating litigation involving  Maxim Integrated Products, Inc. (NASDAQ: MXIM)  for $173 million.

Thus, of the 39 options backdating cases that were filed as securities class actions, 36 have now reached a resolution. Of the resolved cases, 8 of those cases have been dismissed and 28 have substantially or completely settled.

The twenty eight settlements total $2.32 billion, for an average of $79.7 million.  Removing the largest settlement (UnitedHealth Group) lowers the average back to $51.88 million.  And due to a reader comment, we have a new metric - the median settlement value is $16 million including the UnitedHealth case, or $14 million if that case is excluded.  Removing the outlier on the other end (the $2 million PainCare Holdings settlement) returns the median back to $16 million.

Co-lead counsel in the Maxim case are Bernstein Litowitz Berger & Grossmann and Chitwood Harley Harnes.

As always, our complete analysis can be accessed in this presentation.

Continuing their series of "trends" studies for non-US securities class actions, NERA Economic Consulting has released a study of securities litigation trends in the Australia market.

Covering the period from 1993 - 2009, the study has several notable findings, chief among them:

• New case filings have accelerated in recent years.
• The vast majority of Australian actions settle.
• Cases are concentrated in the financial industry

According to the authors (and borne out by our own SCAS data), securities class action filings in Australia set a new record in 2009, breaking the previous record set in 2008.  Moreover, the total number of new cases filed in 2007-2009  represents half of all securities class action cased ever filed in Australia.

As with US cases, a majority of Australian cases alleged either misleading or deceptive conduct, or failure by companies to promptly disclose information material to the value of their securities.

Also, more than half of all securities class actions were brought against companies in the "financial industry," though the report has a broad definition of that term, including both real estate and insurance companies for example.

The study also found that a super-majority of securities class action cases in Australia settle. Of the 12 class actions resolved by the end of 2009, 8, or 75%, were settled.  Apparently, this trend has become even more pronounced in recent years – every case filed after 2003 that has been resolved was settled.

The full report can be downloaded here.

In perusing our options backdating scorecard, we realized that we hadn't updated two cases.

1. The Vitesse Semiconductor Corp. (Pink Sheets: VTSS) litigation actually had two settlements, one with the corporate defendant and the directors and officers, and a separate settlement with KPMG, the auditors.  The revised total value of the two settlements is $20,774,322.

2. The UTStarcom, Inc. (Nasdaq: UTSI) case, which was initially dismissed by the District Court, was settled for $9.5 million back in 2009.

Thus, of the 39 options backdating cases that were filed as securities class actions, 35 have now reached a resolution. Of the resolved cases, 8 of those cases have been dismissed and 27 have settled.  There are now only 4 cases waiting for a substantial final resolution - just over 10% of the filed options backdating class actions.

The twenty seven settlements total $2.15 billion, for an average of $79.7 million.

As always, our complete analysis can be accessed in this presentation.

While it is far too late to suggest that we have reached an inflection point with regard to the options backdating litigation, we have certainly reached a reflection point, with the recently announced Juniper Networks, Inc. (NYSE: JNPR) settlement.  The $169 million class action settlement is the 6th nine-figure settlement of an options backdating securities class action.  Given that some early prognosticators suggested the total settlement value of all of these cases would not exceed $1 billion, it's time to crunch the numbers once more.

Of the 39 options backdating cases that have been filed as securities class actions, 34 have now reached a resolution. Of the resolved cases, 9 of those cases have been dismissed and 25 have settled.

The twenty five settlements total $2.13 billion, for an average of $85.1 million. But, removing the largest settlement (UnitedHealth Group) lowers the average back to $50.08 million. This continues the recent trend of the average settlement value of these cases rising, after a prolonged decline following the UnitedHealth settlement.

As we have previously noted, the options backdating cases have settled more quickly on average, than other cases. The twenty five cases have settled in an average of 717 days. While the numbers have been slowly creeping up as the remaining cases linger, the average time from filing to settlement is still below historical levels.

As always, our complete analysis can be accessed in this presentation.

According to news reports (Bloomberg, Reuters), a verdict was returned earlier today in the Vivendi trial.

Vivendi SA was found liable on all 57 counts, but former Chief Executive Jean-Marie Messier and former Chief Financial Officer Guillaume Hannezo were found not liable.

Today NERA Economic Consulting released the 2009 update to their study, Trends in Canadian Securities Class Actions.

According to the report, securities class action filings in Canada in 2009 continued to stay above historical average filings. The report notes that eight securities class actions were filed in 2009, compared with ten filings in 2008. As with recent reports discussing trends in US securities class action case filings, the "drop" from one year to the next is not the whole story, as 2009 is the second most active year ever for Canadian securities class action case filings.

Six new cases were filed in 2009 involving allegations of misrepresentations and/or omissions by issuers, including claims brought under the new continuous disclosure provisions. This is a new high both in absolute terms and in percentage terms (75%).

The report also notes a steep drop in the overall value of settlements achieved in 2009, with six cases settling 2009 for approximately $51 million versus eight cases totaling $890 million in settlements in 2008. According to the report, the average settlement for 2009 was $8.5 million and the median settlement was $9 million.

Of interest - the majority of cases filed in 2009 were brought in relation to securities issued by companies in the minerals and financial sectors. The report notes that this is both reflective of the composition of the Canadian economy and consistent with filing trends in prior years.

The trend of "belatedly filed" cases that has been discussed with respect to US cases also appears to have permeated north of the border, with 2 of the 8 cases (25% for you non-math majors) filed in 2009 having been filed nearly two years after the end of the proposed class period.

The full report can be downloaded here.

Much ink is spilled (particularly by self-laudatory securities litigators) on the potential upside of the process of opting out of securities class actions and filing individual or group actions over the same alleged misstatements or omissions.

Someone in the plaintiffs bar (perhaps with a PR background) even created a new term to describe these cases - direct actions.

It seems that virtually all of what has been written on the issue has focused on the allegedly larger recoveries that opt-out plaintiffs have received in their own cases as compared to what they would have received if they had remained in the class action and filed a claim for their pro-rata share of the settlement fund.

Well most upsides also have a downside, and a recent state court trial of an opt-out case provides a nice case study for us.

Back in 2004, Aspen Technology, Inc. (OTC: AZPN) and several of Aspen's officers and directors were hit with a securities class action alleging that from October 1999 through October 2004, the defendants had failed to disclose and misrepresented that:

(i) the Company had improperly and prematurely recognized revenue for certain software license and service agreement transactions entered into with certain alliance partners and other customers during fiscal years 2000-2002 and possibly other periods;

(ii) the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and

(iii) as a result, the values of the Company's revenues, earnings, assets and/or liabilities for fiscal years 2000-2002 and possibly other periods were materially overstated and might have to be restated.

During the class period, Aspen had acquired ICARUS Corporation, a company that produced computer software used by the process manufacturing industries to estimate plant capital costs and evaluate project economics, for about $25 million. The payment was a combination of cash, a promissory note, and Aspen stock with a market value of $12.4 million.

In November 2005 the defendants settled the class action litigation for $5.6 million.

Certain class members representing 1.4 million shares of common stock (or less than 1% of the shares purchased during the class period) opted out of the class action settlement.

Three separate actions were filed on behalf of the holders of approximately 1.1 million of the opt-out shares. One of the actions settled, another is still pending, and a third (you guessed it - on behalf of the former owners of ICARUS) went to trial before the Business Litigation Session of the Massachusetts Superior Court for Suffolk County in November 2009.

The ICARUS complaint alleged claims against Aspen and certain former officers alleging securities and common law fraud, breach of contract, statutory treble damages, deceptive practices and/or rescissory damages liability. The damages sought by the plaintiffs (which included trebled claims) were estimated to be $30 million.

Earlier this month, Justice Judith Fabricant ruled that "no fraud occurred...defendants are entitled to judgment on all counts of the complaint." A copy of Justice Fabricant's decision can be found here. According to a blurb on Skadden's website (defense counsel for Aspen) - the news is even worse for the former owners of ICARUS, noting that Justice Fabricant ruled that "the defendants recover of the plaintiffs its costs of action, as provided by law."

Those that stayed in the Aspen class action? The settlement fund was disbursed in March 2008.

As an aside, it is worth noting that the phrase "direct action" has another wider usage:

Politically motivated activity undertaken by individuals, groups, or governments to achieve political goals outside of normal social/political channels. Direct action can include nonviolent and violent activities which target persons, groups, or property deemed offensive to the direct action participant.

So, the next time you see an angry group of shareholders, just remember, they are probably only on their way to the courthouse...

One of the many reports that we publish here at SLW World Headquarters is a quarterly review of the largest securities class action settlements since the passage of the PSLRA, known as the "SCAS Top 100."

Our most recent edition (through Q4 2009) of the SCAS Top 100 was published yesterday, and can be accessed here.

A few interesting observations.

1. More of the Top 100 cases settled in the last 4 years (53) than in the prior ten years.

2. Over the last 4 years, the price of admission to this list has doubled. On the December 31, 2005 version, the 100th largest settlement was the $39 million Washington Group International settlement from 2005. In this version, the 100th largest settlement was the $79.75 million Philip Services Corp. settlement from 2007.

3. The percentage of cases from the Top 100 where an institutional investor is the lead plaintiff continues to creep up. We now have 85% of the cases in the Top 100 with an institutional investor as a lead plaintiff. That compares to 56% 4 years ago.

4. Looking at the firms that serve as claims administrators in these cases, the Top 3 firms have switched places and had the number of settlements on the list move around, but the same three firms make up the Top 3.

A few notes for readers that have not seen a prior version of this report.

1. When a case has multiple settlements, the year listed in the report is for the most recent settlement.

2. The names of the law firms serving as co-lead counsel are left as they were when the case settled.

As always, readers are encouraged to send in any questions or corrections.

Once again, here is the latest round of updates to our securities litigation conferences, webcasts, and other events list.

For the full list, please go here.

As always, readers are encouraged to send information on securities litigation related events to us via the "Contact Us" link on the upper left hand side of this blog.

Year End Securities Litigation Review

January 22, 2010
Webinar

Highlights:

* Analysis of newly filed cases and settlements in 2009
* Assessing the larger implications for underwriters, brokers and risk managers.

No brochure is available, but for more details, visit the webinar registration page.

Contests for Corporate Control 2010: Current Offensive & Defensive Strategies in M & A Transactions

February 4, 2010
PLI New York Center - New York, New York

Highlights:

* Director Fiduciary Duties in M&A Transactions
* Director's personal liability in M&A transactions
* Communicating with shareholders in M&A transactions
* Corporate Governance and Its Effect on the Board of Directors in M&A Transactions

No brochure is available, but for more details, visit the conference registration page.

International Jurisdiction Issues Arising from the Madoff Scandal

February 24, 2010
Teleconference

Highlights:

* Status of the cases filed to date against the feeder funds
* Enforcement issues involving investors and feeder funds abroad
* Clawback related issues and new standards for filing claims

No brochure is available, but for more details, visit the teleconference registration page.

Professional Liability Insurance

March 24-25, 2010
The Carlton Hotel - New York, New York

Highlights:

* Evaluating the Impact of the Credit Crisis on the E&O Market
* The State of the Professional Liability Marketplace
* Madoff scandal impact on the E&O landscape now and in the future

The conference brochure is available here, or for more details, visit the conference webpage.