The SEC has long considered securities enforcement actions a necessary adjunct to its enforcement program. The Commission has repeatedly noted this point in briefs. The Supreme Court acknowledged the fact. Both Cornerstone Research (here) and NERA Economic Consulting (here) track statistics on securities class actions, although neither recorded the number that paralleled by an SEC enforcement action in its most recent survey. Nevertheless, a review of statistics regarding class action offers insight into the overall state of securities litigation.

While many commentators thought the pending of Halliburton II before the Supreme Court last term which challenged the use of the fraud-on-the market theory as a substitute for the key element of reliance might have a significant impact on filings, overall it does not appear to have seriously impacted the trends in filings.

• In 2014 NERA reports that 221 securities class actions were filed. That compares to 222 in 2013 and 212 in 2012. The 508 actions filed in 2001 is the most since the PSLRA was passed. While Cornerstone reports a slight increase in the number of filings last year (the firms use a different approach to tabulating actions) the overall trends are about the same.

• From 2012 through 2014 the number of listed companies increased from 4,916 to 5,209, according to NERA. That contrasts with the overall trend in the number of public companies since 1996 which had been down. The increase means that in recent years the chance for the average public company of being named in a securities class action has decreased.

• The increase in the number of U.S. public companies is reflected in the number of IPOs on major exchanges in this country. Last year, according to Cornerstone, there were 206 U.S. IPOs which continues the upward trend since 2011 when there were just 93.

• While the number of case filings has been essentially flat over the last two years the aggregate investor losses as reported by NERA has declined. Last year it was about $154 million compared to $159, $243 and $248 million in, respectively 2013, 212 and 2011. At the same time six of those actions accounted for the bulk of the investor losses, according to NERA. Cornerstone reported that there were no mega filings, defined those as involving over $5 billion.

• The securities class actions filed were largely concentrated in the health technology and services, finance and electronic technology and services sectors which accounted for, respectively 25%, 19% and 13% of the suits, according to NERA.

• Last year the number of filings against foreign issuers increased to 34 which was well above the average of 22 from 1997 through 2013, according to Cornerstone. The number against Canadian firms was the lowest in five years, returning to a level closer to the historical average, according to the firm.

• The number of securities class actions centered on accounting allegations filed last year increased by 5% to 30% of the filings. That compares to 25% in 2013 and 24% in 2012 but is below the 38% in 2011, according to NERA. At the same time the number of actions which named a major accounting firm as a co-defendant declined to just 0.9% of the filings.

Finally, the vast majority of cases continue to be settled prior to trial. Last year only one securities class action was tried to verdict, with the plaintiffs prevailing at the District Court level. In contrast, in 48% of the cases a motion to dismiss was granted, while in 21% the motion was granted in part and denied in part. Of the remaining, 75% were settled before certification, according to NERA.