New York -- On 25 April 2012, US District Court Judge Cathy Bissoon denied a motion by the National Association of Chain Drug Stores and other pharmacy groups and retail pharmacies to block the acquisition of Medco Health Solutions by Express Scripts. The transaction had already been approved by the US Federal Trade Commission (FTC) on 2 April 2012 after an eight-month investigation. Medco and Express Scripts are two of the three largest US pharmacy benefit managers (PBMs).

Economists at NERA Economic Consulting provided advice to counsel for Medco prior to the transaction and during the FTC’s investigation. NERA’s work on behalf of Medco focused on analyses of Medco's historical sales and competitive bidding data. Analyses of these and other market data by NERA's team, led by Senior Vice Presidents Dr. Lawrence Wu and Dr. Thomas McCarthy, were particularly informative about the likely competitive effects of the transaction.

"As noted by the FTC, the bidding data produced by Medco, Express Scripts, and other third parties demonstrated that Medco and Express Scripts were not particularly close competitors and that other competitors have been successful in winning business away from the merging parties," said Dr. Wu. "These and other analyses were central to the FTC’s conclusion that the market for PBM services was competitive and that the transaction would not have an adverse effect on the competitive dynamics."

For more information about NERA's role in Medco's acquisition by Express Scripts, please visit www.nera.com/antitrust.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting has developed a new proprietary tool—the N_ewERA model—to assess the impact of policy, regulatory, and economic changes on the energy sectors and the economy. By combining a macroeconomic model incorporating all sectors of the economy with a detailed electric sector model, N_ewERA allows for a complete assessment not only of the effects of the changes on the sector directly, but also the indirect effects on the economy such as GDP and personal income growth as well as gains and losses of jobs.

"NERA has long been at the forefront of the continuing transformation of the energy industry around the world," said Senior Vice President Mike King, Chair of NERA's Global Energy, Environment, and Network Industries Practice. "The N_ewERA model is the latest advance and represents a significant expansion of NERA's capabilities as we help companies manage unprecedented change and uncertainty in the energy sectors related to factors such as technology improvement and environmental regulation."

Applying the expertise of leading economic modelers and NERA's extensive energy industry experience, the model allows for full evaluation of how new and potential future policy, technology, and other changes will influence the energy sectors, assessment of the economic consequences may have on the economy's non-energy sectors, and a complete understanding of the economic impacts of different policies and regulations on all sectors of the economy. The N_ewERA model's integrated approach gives NERA's experts the capability to evaluate the economic impacts of a range of current and proposed policies, including renewable portfolio and clean energy standards, emission taxes, cap-and-trade policies, command and control environmental standards, efficiency standards, financial incentives, and transportation fuel policies.

For more information about the N_ewERA model, please visit: http://www.nera.com/59_7655.htm

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting is pleased to congratulate its nominees for this year's International Who's Who of Competition Lawyers & Economists. NERA's competition team is well-represented once again, with nominees from 10 offices in 6 countries highlighting the depth, breadth, and international footprint of the firm's competition and antitrust expertise.

The following NERA experts were included in the 2011 edition of The International Who's Who of Competition Lawyers & Economists:

Sumanth Addanki -- Senior Vice President, White Plains, NY
Gary Dorman -- Senior Vice President, Los Angeles, CA
Greg Houston -- Director, Sydney, Australia
Andrew Joskow -- Senior Vice President, Washington, DC
Gregory K. Leonard -- Senior Vice President, San Francisco, CA
Francesco Lo Passo -- Director, Rome, Italy
Thomas McCarthy -- Senior Vice President, Los Angeles, CA
Linda McLaughlin -- Special Consultant, New York, NY
James Mellsop -- Director, Auckland, New Zealand
Richard Rapp -- Special Consultant, New York, NY
Ramsey Shehadeh -- Chair of NERA's Antitrust Practice, New York, NY
Lauren J. Stiroh -- Senior Vice President, Toronto, Canada
Mark Williams -- Director, European Competition Policy, London, UK
Lawrence Wu -- Senior Vice President, San Francisco, CA

The guide is published by Who's Who, a complement to the Global Competition Review. Nominees for The International Who's Who of Competition Lawyers & Economists are selected by survey of counsel and private practice lawyers worldwide.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, today announced that Sean Gammons has been promoted to Director and Sébastien Gonnet has been promoted to Vice President.

Mr. Gammons, a London-based member of NERA’s Energy, Environment, and Network Industries Practice, specializes in the economics of electricity and gas markets. His experience spans regulation, competition policy, litigation/arbitration, due diligence, valuation, and risk management cases. He has particular expertise in using computer-based economic models to anticipate market evolution and assess the risk exposure and performance of energy assets, covering production, networks, trading, and retail. Much of his recent work has focused on the effects of environmental regulation on energy markets. Mr. Gammons received his MSc in economics from University College, London, and his BA from St. Catherine’s College, Oxford.

Mr. Gonnet is a member of NERA’s Transfer Pricing Practice based in Beijing and Shanghai. He specializes in the areas of transfer pricing, intellectual property, and valuation. In recent years, Mr. Gonnet has been closely involved with projects for multinationals in China and Europe in a range of industries, including pharmaceuticals, retail, luxury, food and beverage, telecommunications, chemicals, commodities, and software. He also acts as an expert economist in advance pricing agreements and tax audits in China and Europe. Mr. Gonnet has published numerous articles for transfer pricing publications, is a regular speaker at conferences in China and Europe, and has been ranked as one of the "World's Leading Transfer Pricing Advisers." Mr. Gonnet holds a Master of Science in Management from HEC, Paris (Ecole des Hautes Etudes Commerciales) and a Master of Science in International Taxation from Paris II Law University.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, congratulates NERA Vice President Dr. Elizabeth M. Bailey on her appointment as Executive Director of the Energy Institute at the Haas School of Business. Dr. Bailey will remain affiliated with NERA as a Special Consultant with the firm.

"Dr. Bailey has been an invaluable asset to NERA and its clients over the past 14 years," said NERA President Dr. Andrew Carron. "I join everyone at NERA in congratulating Liz on her appointment, and looking forward to continuing to work with her in her new role. The Energy Institute at Haas is fortunate to have someone with Liz's experience, talents, and intellect serving as its Executive Director."

The Energy Institute at Haas is a joint venture of the Haas School of Business and the U.C. Energy Institute that brings together research and curricular programs on energy business, policy, and technology commercialization. In the newly created Executive Director position, Dr. Bailey will work to expand the Energy Institute's curricular and research activities. She will engage in applied research on energy and environmental issues to support the business and policy communities, and develop and coordinate the curriculum for MBA and undergraduate students.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

Toronto -- Securities class action filings in Canada reached their highest level to date in 2011 with 15 new filings, according to NERA Economic Consulting's annual report, Trends In Canadian Securities Class Actions: 2011 Update. The previous high was 12 filings in 2008.

Driving this increase in filings are so called "Bill 198" cases, which are those involving claims in respect of an issuer’s continuous disclosure obligations pursuant to PartXXIII.1 of the Ontario Securities Act (OSA) and analogous sections of the other provincial securities acts. Nine of the 15 cases filed in 2011 were Bill 198 cases, compared to the seven filed in 2010. A total of 35 Bill 198 cases have been filed since the new provisions came into force in 2005. Of these, 24 remain unresolved, 10 have settled, and one has been dismissed.

"The uptick in securities class actions filings observed since 2008 is clearly not a transient phenomenon," said NERA Senior Vice President and Trends co-author Mark Berenblut. "This trend has been driven by filings of Bill 198 cases, which account for more than two-thirds of the cases filed between 2008 and 2011."

"This upward trend seems likely to continue at least through 2012. Several factors may influence the number of filings and the size of settlements in the future, including future rulings in leave applications, certification motions, and any trial judgments, as well as the evolving landscape of US class actions involving foreign companies and investors following the US Supreme Court decision in Morrison," added NERA Vice President and Trends co-author Brad Heys.

Filings against Chinese Companies

Three of the new filings during 2011 were made against Chinese companies whose shares trade on the TSX or TSX Venture Exchange. These filings are a reflection of one of the major trends driving class action filings in the United States last year. The filings in Canada include the case against Sino-Forest—one of the highest-profile suits brought against Chinese companies on either side of the border.

Additional Securities Class Action Trends

Other key findings from the report include:

• There are 45 active Canadian securities class actions as of 31 December 2011. These cases represent a total of approximately CAN$24.5 billion in outstanding claims.
• Of the six non-Bill 198 class action filings made in 2011, one involved only prospectus claims, one is related to a takeover bid, two involved allegations related to the management of investment funds, and two involve allegations of a Ponzi scheme.
• As noted in previous annual reports, Canadian companies face the risk of class action litigation in the United States, with parallel actions in Canada. In 2011 five Canadian-domiciled companies were named as defendants in six securities class action filings in the US, up from the three cases filed in each of 2009 and 2010, but down from the eight cases filed in 2008.
• Two cases settled in 2011 for total payments by defendants of $58.6 million. This includes the actions against Norbourg Asset management ($55 million) and Redline Communications Group ($3.6 million).
• Ontario continues to be the venue for the majority of Canadian shareholder class action filings. In 2011, 12 of the 15 new cases were filed in the province.
• Five of the 15 Canadian securities class actions filed in 2011 were brought against companies in the minerals sector and four were brought against companies operating in the finance sector. Two were brought against forestry companies.
• In 2011, the average time to filing was about 10.5 months from the end of the proposed class period. However, the median time to filing cases filed was significantly lower in 2011 at just under three months, down from approximately twelve months for cases filed in 2010.

Class Action Trend Series

NERA has been analyzing trends in securities class actions for more than 15 years. In addition to this Canada Trends report, the firm produces two US Trends studies annually, and reports for the UK, Australia, Japan, and Italy.

This year-end study was authored by NERA Economic Consulting Senior Vice President Mark Berenblut and Vice President Bradley Heys.

Trends In Canadian Securities Class Actions: 2011 Update may be downloaded from: http://www.nera.com/67_7596.htm.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For nearly half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from over 20 offices across North America, Europe, and Asia Pacific.

New York -- The Securities and Exchange Commission (SEC) reached a total of 682 settlements in fiscal year 2011 (FY11), almost unchanged from 680 settlements in fiscal year 2010, according to NERA Economic Consulting’s biannual report SEC Settlement Trends: 2H11, released today.

Settlement Allegation Trends

While the total number of FY11 settlements remained relatively constant over the previous fiscal year, there has been a substantial shift in the composition of allegations. Since FY09, Trends authors have observed an increase in settlements with financial services firms for misrepresentations to customers or misappropriation of funds, and an offsetting decrease in settlements relating to public company misstatements.

The three-year rise in the percentage of SEC settlements involving misrepresentations or misappropriation by financial services firms suggests a shift in the SEC’s enforcement focus since the financial crisis began and the Madoff fraud was revealed. These types of settlements accounted for 41.6% of all SEC settlements in FY11, as compared to the FY03-08 average of 23.7%. Illegal offering and market manipulation cases were the second most common in FY11, representing 27.3% of settlements, the highest level since 2005. Public company misstatement settlements continued to decline for a fourth consecutive year, to 10.4% of total settlements, the lowest level since Sarbanes-Oxley ("SOX") was passed.

Relative to the previous fiscal year, the SEC reached 24% more settlements with companies in FY11 and 7% fewer settlements with individuals. This shift in FY11 does not appear indicative of a multi-year trend, as Trends authors have observed similar fluctuations in company and individual settlements in previous years.

Trends in Settlement Values

Median settlement values with companies nearly doubled from $800,000 in FY10 to $1.47 million in FY11, near the post-SOX high of $1.5 million in FY06. Median settlement values for individuals were $175,000 in FY11, a 35% increase from the previous post-SOX high of $130,000 in FY08. Although high-value settlements with companies declined––an exception to the overall trend of increasing settlement values––high-value settlements with individuals reached post-SOX highs, when measured at the 75th and 90th percentiles. This result is consistent with recent statements by SEC officials emphasizing individual accountability for actions taken by individuals responsible for corporate decisions.

"The data from 2011 show the impact of settlements for conduct occurring during the financial crisis," said NERA Vice President and Trends co-author Dr. James A. Overdahl. "Given recent statements made by senior SEC officials emphasizing individual accountability, we may see more individual settlements arising from these cases. In addition, the recent court decision failing to approve the SEC's proposed settlement with Citigroup Global Markets and the broader implementation of Dodd-Frank in the year ahead may have far-reaching, but at this point unpredictable, implications for settlement trends in the months and years ahead."

Ten Largest FY 2011 Settlements

 

Settling Defendant	Total
Milowe Allen Brost & Gary Allen Sorenson	$310 million
J.P. Morgan Securities LLC	$154 million
U.S. Pension Trust Corp. & U.S. College Trust Corp.	$113 million
Morgan Asset Management & Morgan Keegan & Co. Inc.	$100 million
Jacob “Kobi” Alexander, co-founder, Comverse Tech.	$54 million
J.P. Morgan Securities LLC	$51 million
Johnson & Johnson	$49 million
UBS Financial Services Inc.	$47 million
Alcatel-Lucent, S.A.	$45 million
Joseph P. Nacchio, former CEO, Qwest Communications International, Inc.	$45 million

SEC Settlement Trends Report Series
 
NERA has developed a proprietary database of settlements and judgments in SEC enforcement actions since SOX by reviewing every litigation release and administrative proceeding document published since 21 July 2002. You can download the latest report, SEC Settlement Trends: 2H11, and find historical SEC settlements data and previous SEC settlements trends reports at www.SecuritiesLitigationTrends.com.
 
This report is authored by NERA Senior Consultant Dr. Max Gulker, Senior Vice President Dr. Elaine Buckberg, and Vice President Dr. James A. Overdahl.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting welcomes Dr. Fabrizio Hernández on his return to the firm after serving as Secretary of State for Energy since January 2011 within Spain's Ministry of Industry, Tourism, and Trade.
 
Dr. Hernández originally joined NERA in 1997, where he held the position of Associate Director at the time of his Ministry appointment. He now rejoins the firm in the same position.
 
Working from NERA's Madrid, London, and Brussels offices, Dr. Hernández will be applying his expertise on behalf of clients primarily across Europe and Latin America, focusing on international arbitration, commercial damages, valuation, infrastructure planning and development, and economic regulation.
 
"We are pleased that Fabrizio has returned to NERA," said NERA Economic Consulting President Dr. Andrew Carron. "His economic expertise and broad experience in numerous sectors of the economy have always brought real value to our clients."

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, has appointed Senior Vice President Dr. Marcia Kramer Mayer as the new Chair of its Global Securities and Finance Practice. Dr. Robert Mackay, who preceded Dr. Mayer as Practice Chair, will remain with the firm as Senior Vice President.

"On behalf of all of us at NERA, I would like to thank Robert for his exceptional leadership of the Practice over the last two years," said NERA President Dr. Andrew Carron. "In a time of great change in the securities and finance industry, he has successfully moved the Practice into new geographies and added new capabilities of great value to our clients. With her intellect, vision, and long track record of success as an economist and consultant, I’m confident that Marcia will continue to move the Practice forward as a recognized leader in its field."

Dr. Mayer has been affiliated with NERA for 20 years, working on a wide variety of securities and finance projects, with special expertise in cases involving credit crisis allegations, accounting restatements, public offerings, stock acquisitions, FDA issues, market manipulation, insider trading, Ponzi schemes, and transactions-level data. She has applied her expertise in legal and regulatory cases, and as an advisor to companies and regulatory bodies. Before joining NERA, Dr. Mayer was Vice President of Research at the American Stock Exchange.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, congratulates Fernando Jiménez on his appointment to Spain's Ministry for the Economy and Competitiveness as Secretary of State for the Economy and Business Support. Prior to his appointment, he was a NERA Associate Director and head of the firm’s Competition Policy Group in Madrid. Mr. Jiménez joined NERA in 2004, and has provided advice in numerous merger investigations and antitrust cases.

"We are pleased that the Spanish government has selected Mr. Jiménez to fill such an important position," said NERA President Dr. Andrew Carron. "The appointment reflects both Mr. Jiménez's outstanding capabilities and the high caliber of competition economics here at NERA."

In his role as Secretary of State for the Economy and Business Support, Mr. Jiménez will be broadly responsible for developing and executing the government’s economic policy and reforms to improve the competitiveness of the economy through liberalization and support for entrepreneurship.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- The pace of filings of class actions under federal securities and commodity laws held relatively steady in 2011 as compared to the previous three years, according to NERA Economic Consulting's semi-annual report, Recent Trends in Securities Class Action Litigation: 2011 Year-End Review, released today. While shareholder filings continue to be filed at a relatively steady level as compared to the past three years, there has been a substantial shift in the composition of suits filed. A surge in cases involving Chinese companies listed in the US and in M&A objection suits, along with a waning of credit-crisis cases, has been driving this trend.

NERA Trends authors project there will be 232 shareholder class action filings in 2011, broadly in line with levels observed in 2010 (241), in 2009 (218), and 2008 (245). Suits objecting to a merger or an acquisition have accounted for 29 percent of filings so far in 2011, and filings against Chinese companies have accounted for approximately 18 percent.

Filings against Foreign-Domiciled Firms

Filings against foreign-domiciled issuers reached 64 in 2011, more than double the annual count observed in recent years. This surge in suits is largely attributed to the surge in filings against Chinese companies. So far in 2011, there have been a total of 29 filings against Chinese-domiciled firms. However, this number understates the number of Chinese firms targeted, as not all companies based in China are legally domiciled there. When the Trends authors included Chinese companies that are either domiciled in China or have their principal executive offices in the country, there have been 39 suits against Chinese companies in 2011.

Settlements

Average settlement values of securities class actions fell to $31 million in 2011, well below the 2010 average of $108 million. However, the annual average settlement figure can be significantly impacted by large settlement outliers. Excluding settlements in excess of $1 billion, as well as 309 small settlements related to IPO laddering cases that were approved in October 2009, there is still a substantial decline in average settlements from 2010 to 2011—from $40 million in 2010 to $31 in 2011. An alternative metric Trends authors use is median settlements. In 2010, the median settlement reached an all-time high of $11 million, but in 2011, this figure fell to $8.7 million—below the previous two years but still the third highest on record.

Additional Settlement Trends

• The number of settlements in 2011 also declined as compared to previous years.
• 54% of cases that settled or have a scheduled court approval date in 2011 did so for less than $10 million, well up from the 41% observed in 2010.
• Only 6% of 2011 settlements were for more than $100 million, down from 8% in the previous year.
• Aggregate amount paid out in settlements ($2.6 billion) is at its lowest level since 2004.

"The year 2011 may be remembered as the year that saw the explosion of Chinese company-related lawsuits, the continued dominance of M&A cases alleging breach of fiduciary duty, and the sunset of credit crisis-related litigation," said NERA Senior Vice President and report co-author Dr. John Montgomery. "Looking ahead, it will be interesting to see how the level of filings may change or whether new categories of litigation will predominate."

"The number of settlements has declined, with the median settlement in 2011 falling below last year's high on $11 million, but still the third-highest on record," said NERA Senior Consultant Robert Patton. "Settlement amounts also reflect the stage of litigation," added NERA Senior Consultant Jordan Milev. "Settling after a motion for summary judgment is denied could drive up the settlement amount by an estimated 62%, on average."

Additional Shareholder Class Action Trends

• Filings by sector: Securities class actions against financial sector companies accounted for roughly 16% of cases in 2011, as contrasted with nearly half in 2008 and 2009. Filings against companies in the electronic technology and technology services sector accounted for the largest percentage in the year, with 21% of filings. Health technology and services companies accounted for 15% of filings.
• Filings of credit crisis-related class actions largely subsided in 2011, with 11 cases filed. Such litigation is approximately a third of its level last year, when it had already declined by about two-thirds from its 2008 peak.
• Aggregate plaintiffs' attorney fees, at $594 million, fell in 2011 to their lowest level since 2004. This decline is largely attributed to the combination of the lower average and median settlement size, and fewer settlements occurring in 2011.
• Cases were filed considerably more quickly in 2011 -- the average time to file in 2011 was 109 days, as compared to 175 days last year.

NERA Securities Class Action Trends Report Series

NERA has been analyzing trends in securities class actions for more than 15 years. Two reports are published per year: a mid-year study and an annual review at year's end. This year-end study was authored by NERA Senior Vice President Dr. John Montgomery and Senior Consultants Dr. Jordan Milev, Robert Patton, and Svetlana Starykh and includes data on filings and dismissals through 30 November 2011, and settlements through 31 December 2011.

For more details, and to read the full report, visit: www.nera.com/recenttrends.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, announced today that Dr. Jerry Arnold has affiliated with the firm as a Special Consultant in its Global Securities and Finance Practice.

Dr. Arnold, a professor of accounting at the University of Southern California, is a leading expert on accounting issues, particularly those related to compliance with US Securities and Exchange Commission (SEC) rules. He has served many times as an expert witness in commercial litigation focusing on SEC and accounting issues, as well as matters involving valuation and assessment of damages. He has also been retained by the SEC and the US Department of Justice as an expert on accounting and disclosure issues, and has advised several companies on SEC compliance issues.

"We are pleased that Dr. Arnold has decided to affiliate with NERA," said Dr. Robert Mackay, NERA Senior Vice President and Securities and Finance Practice chair. "As SEC and accounting rules have become more complex, compliance and related litigation have become increasingly important issues. Dr. Arnold's expertise and experience in these areas represent an invaluable asset to NERA and our clients."

In addition to serving on the faculty at the University of Southern California, Dr. Arnold has taught at the University of Pennsylvania's Wharton School, the University of California, Los Angeles, the University of Michigan, and the University of Missouri. He was also the founding director of the SEC and Financial Reporting Institute, which promotes interaction among policymakers, their constituencies, and researchers in academia.

Dr. Arnold has published extensively in business and academic journals and monographs, and has spoken widely at conferences and before government bodies.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting Senior Consultants Dr. Max Gulker and Dr. Alex Grecu, and Senior Analyst David Bubb analyzed the benefits and costs to New York State and its residents of implementing a proposed executive order mandating that state government agencies provide translation and interpretation services to state residents with limited English proficiency (LEP). NERA was retained by New York Lawyers for the Public Interest on a pro bono basis.

After a review of independent data, academic literature, government documents, and related executive orders from multiple jurisdictions, Dr. Gulker, Dr. Grecu, and Mr. Bubb found that "implementation of the proposed executive order will yield benefits to both New York State’s LEP residents and its government agencies. LEP residents will experience improvements in access to and quality of services provided by state agencies. State agencies will experience increased efficiency and, potentially, reduced costs, associated with their interactions with LEP individuals."

Dr. Gulker, Dr. Grecu, and Mr. Bubb estimated that the incremental cost of providing language-access services by the State represents a small fraction of the affected agencies’ budgets—0.05% of agencies’ total budgets.

On 6 October 2011, Governor Andrew M. Cuomo signed an Executive Order requiring New York state agencies that offer public services to offer free interpretation and translation services to members of the public for vital government forms and instructions.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting Senior Vice Presidents Dr. Elaine Buckberg and Dr. Thomas McCarthy filed a joint economic expert report and testified in court on behalf of the Hospital Corporation of America during the remedies phase of the Foundation for Seacoast Health vs. Hospital Corp of America case. HCA prevailed on all the material points it raised.

In 2006, the Foundation for Seacoast Health sued the Hospital Corporation of America (HCA) and certain of its subsidiaries seeking the right to buy back the Portsmouth Regional Hospital (PRH) on grounds that HCA's corporate-wide leveraged buyout had triggered its right to do so. The courts rejected this claim, but during discovery in the case, the Foundation learned that there had been an intracorporate transfer of the hospital in 1999 when HCA restructured the company for tax reasons. The plaintiff amended its complaint, alleging that this 1999 transfer violated the original Asset Purchase Agreement and triggered the Foundation's right of first refusal to buy back PRH. In December 2009, Rockingham County Superior Court Judge Kenneth McHugh ruled that the 1999 transfer wasn’t permitted under the original Asset Purchase Agreement between the two companies, and ordered a second trial to consider damages or other remedies for the technical breach.

Dr. Buckberg and Dr. McCarthy's testimony in the remedies phase of the Foundation for Seacoast Health vs. Hospital Corp of America trial showed that it was highly unlikely the Foundation could have purchased PRH in 1999 using debt financing because the Foundation would have had to issue an unprecedented amount of debt. The NERA economists also discussed with the court why the Foundation's interpretation of the Asset Purchase Agreement did not make economic sense. Finally, in the event the Foundation was entitled to damages, the opinions of Dr. Buckberg and Dr. McCarthy supported HCA's contention that the damages would be zero because the Foundation would not have and could not have purchased PRH, even if given the right to buy the hospital.

Judge McHugh ruled that the Foundation had no contractual right to purchase PRH as a result of the 1999 transfer of the hospital. Consistent with Dr. Buckberg and Dr. McCarthy's conclusions, he also ruled that the Foundation would not have and could not have bought the hospital, thus, there could be no damages, Furthermore, Judge McHugh held that a repurchase by the Foundation would not be an appropriate equitable remedy. The court found instead that the appropriate equitable remedy would be a rescission of the 1999 transfer, and therefore ordered HCA to move the hospital back to the same corporate structure that existed prior to 1999.

Dr. McCarthy directs NERA's Health Care Practice, which specializes in the economic analysis of regulatory, public policy, and litigation matters in health care markets. Dr. McCarthy has analyzed the competitive issues raised by a wide variety of mergers and antitrust claims in all segments of the health care industry, including hospitals, hospital systems, health insurers, physician groups, physician practice management companies, medical device companies, pharmaceutical companies, PBMs, and home health care companies. He holds a PhD and MA in economics from the University of Maryland. He was assisted in his analysis by former NERA Senior Consultant Dr. Sourav Chatterjee.

Dr. Buckberg provides expert testimony and litigation support in the areas of securities economics, finance, valuation, and regulation. She has also directed engagements involving fraudulent conveyance and bankruptcy. Her testimony and litigation experience includes regulatory, criminal, and civil securities cases. Dr. Buckberg earned her PhD in economics from MIT. She was assisted in her analysis by NERA Senior Consultant Dr. Alan Grant.

NERA worked with Latham & Watkins and McLane, Graf, Raulerson, & Middleton in Foundation for Seacoast Health vs. Hospital Corp of America. The decision can be read here:
 http://static.djlmgdigital.com/scn/seacoastonline/graphics/spclReports/linked/20110919_HCA_decision.pdf.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Special Consultant Dr. Michael Baye and Senior Vice President Dr. Lauren Stiroh submitted liability and damages expert reports on behalf of Sirius XM in the Blessing v. Sirius XM Radio lawsuit.

The class action case surrounded plaintiffs' allegations that Sirius XM had violated federal antitrust consumer laws and state consumer protection laws by raising subscription prices after the merger of the two companies. On 25 August 2011, the US District Court of the Southern District of New York approved a non-cash settlement that was reached between the parties prior to trial. 

Dr. Baye is the Bert Elwert Professor of Business at Indiana University's Kelley School of Business. His research focuses on pricing strategies and their impact on consumer welfare, and firm profits in both online and traditional markets. His academic work on mergers, auctions, patents, advertising, online markets, and other areas related to antitrust and consumer protection has been published in leading economics and marketing journals. Dr. Baye received his PhD and MS in economics from Purdue University.

Dr. Stiroh specializes in the economics of antitrust, intellectual property, and commercial damages. She has conducted research, prepared expert reports, and testified in court on a variety of issues arising from antitrust allegations such as monopolization, exclusionary conduct, tying, vertical restrictions, price fixing, predatory pricing, price discrimination, and abuse of standard setting. Dr. Stiroh received her PhD in Economics from Harvard University and MA in Economics from University of British Columbia.

NERA was retained by Jones Day. Discussion of the Blessing v. Sirius XM Radio case and related documents can be viewed at the settlement website sponsored by the plaintiffs in the case: http://www.satelliteradiosuit.com/Home.aspx.  

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, is pleased to announce that Dr. Patrick Conroy and Dr. Jon Wainwright have been promoted to Senior Vice President.

Based in NERA's New York City office, Dr. Conroy specializes in securities and finance. His work at NERA has included economic analysis involving securities fraud, mutual/hedge fund trading, ETFs, broker-dealer disputes, derivatives, and company valuation. He has testified in state and federal court on securities-related issues. He was formerly an economist with the US Securities and Exchange Commission. Dr. Conroy holds a PhD in Economics from the University of Miami.

Dr. Wainwright works out of NERA's Austin and Chicago offices. He specializes in labor economics, statistics, and industrial organization. He has extensive experience analyzing the effects of discrimination on minorities, women, and persons over 40. He has testified as an expert witness in federal and state courts and before the US Congress on these issues, and has authored one book and authored or co-authored numerous research reports and papers on these subjects. Dr. Wainwright holds a PhD in Economics from the University of Texas at Austin.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting Special Consultant Dr. Michael Baye and Vice President Dr. Graeme Hunter provided economic analysis to assist the US Department of Justice (DOJ) in successfully resolving the case of United States, State of Wisconsin, State of Illinois, and State of Michigan v. Dean Foods Company.

The DOJ and the states of Illinois, Michigan, and Wisconsin brought the case against Dean Foods in 2010, alleging that Dean's acquisition of assets from Foremost Farms USA violated Section 7 of the Clayton Act. The acquisition reportedly gave Dean control of up to 60% of all milk sales in northeastern Illinois. On 29 July 2011, Dean Foods agreed to a proposed settlement in the case, requiring the company to divest a milk processing plant in Waukesha, Wisconsin. The settlement satisfied the DOJ's competitive concerns.

Dr. Baye is the Bert Elwert Professor of Business at Indiana University's Kelley School of Business. His research focuses on pricing strategies and their impact on consumer welfare, and firm profits in both online and traditional markets. His academic work on mergers, auctions, patents, advertising, online markets, and other areas related to antitrust and consumer protection has been published in leading economics and marketing journals. Dr. Baye received his PhD and MS in economics from Purdue University.

Dr. Hunter is a member of NERA's Global Antitrust Practice, where his work focuses on analysis of the competitive effects of mergers and the effects of alleged anticompetitive behavior, assessing liability and damages. He has conducted research, prepared analyses, and contributed to litigation involving a broad range of market power issues, including price fixing, bid rigging, tying, and predatory pricing. He received his PhD and MA in Economics from New York University.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- Consumers are largely unaware of the potentially high out-of-pocket costs associated with medications placed on specialty tiers by their prescription drug plans, according to a new study released today from NERA Economic Consulting.

"How Much Does that Medication Cost?" analyzed Medicare Part D beneficiaries' knowledge of the out-of-pocket costs associated with drugs placed on specialty tiers. Specialty tiers are typically a fourth formulary category that includes higher-cost, brand name medications and often include medications used to treat conditions like cancer, multiple sclerosis, rheumatoid arthritis, HIV/AIDS, and lupus.

A NERA team led by Special Consultant Dr. Eugene P. Ericksen and Consultant Melissa A. Pittaoulis was recently commissioned by Pfizer to determine the level of awareness of out-of-pocket costs associated with drugs on specialty tiers among consumers.

Survey Results

• Many survey respondents were unaware that Part D insurance plans charge differently for expensive medicines used to treat complex, chronic diseases. Half of the survey respondents mistakenly believed their plan would require them to pay a co-pay rather than coinsurance for a drug on the specialty tier.
• Respondents also underestimated the amounts they would have to pay out-of-pocket for specialty tier drugs, including those used to treat rheumatoid arthritis and multiple sclerosis.
• The findings suggest that most beneficiaries are unlikely to anticipate the financial impact of being prescribed a drug on a specialty tier.

According to "How Much Does that Medication Cost?," "while most respondents are aware that plans use tiered cost-sharing, a substantial percentage remains uninformed about the out-of-pocket costs associated with specialty tier drugs. These results suggest that, if confronted with having to take a drug on a specialty tier, many beneficiaries would be surprised to learn that they are responsible for a percentage of the cost rather than a flat co-pay. Furthermore, even those respondents who are aware that they would have to pay a percentage of the cost of a specialty tier drug underestimate the amount they would have to pay."

The report, "How Much Does that Medication Cost?," may be viewed at: http://www.nera.com/67_7404.htm

Methodology

NERA designed a survey questionnaire that was administered by Knowledge Networks Inc. Panel members were 65 years and older and included persons living in cell phone-only and non-Internet households. A total of 638 respondents qualified and completed the survey.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

Tokyo -- The number of judgments in securities litigation involving "misstatement" allegations in Japan decreased substantially to seven in 2010 from 14 in 2009, according to NERA Economic Consulting's report, Trends in Securities Litigation in Japan: 2010 Update, released today. This decline is largely due to the resolution of several important cases that involved numerous institutional and individual investors—including Livedoor and Seibu Railway.

While misstatement cases have seen a remarkable decline, the number of judgments over disputes between financial institutions, including securities companies, and their customer investors ("broker-customer litigation") reached a record high of 44 in 2010. Trends authors also observed that the number of regulatory actions by the Securities and Exchange Surveillance Commission (SESC) regarding monetary penalties for misstatements increased to a record high of 12 in 2010, up from nine in 2009.

"Although the resolutions of large cases resulted in a sharp drop in the amount of securities litigation in 2010," said NERA Economic Consulting Vice President and Trends co-author Makoto Ikeya, "the potential for future misstatement cases is expected to continue to rise, as SESC decisions are early indicators of misstatements litigation."

The Trends in Securities Litigation in Japan: 2010 Update annual report analyzes trends in securities litigation, relying on statistics from 1998 through the year-end 2010.

Additional Securities Litigation Trends

• Total number of judgments in securities litigation increased substantially to 56 in 2010, the highest in history, from 39 in 2009.
• The number of litigation cases between financial institutions and customer investors (broker-customer litigation) reached a record high of 44 in 2010, nearly twice the 2009 total of 23 and well above the previous record of 33 in 2007. 
• Of these 44 cases, 12 involved unlisted stock trading—which at 27% was the most frequent allegation in 2010.
• Total damages judged in 2010 dropped to 19 billion yen, significantly lower than the record 47.2 billion yen reached in 2009.
• Damages awarded in broker-customer cases increased significantly in 2010, to 16.3 billion yen from 1.3 billion yen in 2009.

Trends in Securities Litigation in Japan: 2010 Update was authored by NERA Economic Consulting Vice President Makoto Ikeya and Consultant Satoru Kishitani. Previous reports in our series on securities trends in the United States, Canada, and Australia may be viewed at www.securitieslitigationtrends.com.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world’s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

Media Contacts

Japan Contact
Makoto Ikeya
+81 3 3500 3290
makoto.ikeya@NERA.com

Global Contact
Benjamin Seggerson
+1 202 466 9232
ben.seggerson@nera.com

New York -- The DC Circuit Court of Appeals cited a report, authored by NERA Economic Consulting Senior Vice President Dr. Elaine Buckberg and Jonathan Macey, Sam Harris Professor of Corporate Law at Yale University, in its decision to vacate the Securities and Exchange Commission's (SEC) rule giving shareholders the right to nominate board of directors through a proxy vote.

The DC Court of Appeals found that the SEC did not adequately consider the economic impact the proxy rules would have on corporations, and therefore did not meet its mandate to consider the effect of the new rules on efficiency, competition, and capital formation. In particular, US Circuit Judge Douglas Ginsburg wrote in the decision that the commission "failed to respond to substantial problems raised by commenters." The Business Roundtable and the US Chamber of Commerce brought the challenge to the new SEC regulation, the first approved under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Report on Effects of Proposed SEC Rule 14a-11 on Efficiency, Competitiveness and Capital Formation, authored by Dr. Buckberg and Professor Macey and cited by the Court, identified serious risks to companies if the SEC's Proposed Election Contest Rules were enacted, including the following:

• Ensuing shareholder nominations would lead to less qualified boards of directors that do not achieve the experience and skill mix required to meet the challenges facing companies today.
• Board members' interests could diverge from the goal of maximizing shareholder value.
• The Proposal would impose an additional disincentive for US companies to go public, further undermining the competitiveness of US capital markets.
• Deterring companies from public listing in the US would increase the cost of capital for US companies, thereby impeding capital formation and undermining those companies' competitiveness.

Dr. Buckberg and Professor Macey's Report on Effects of Proposed SEC Rule 14a-11 on Efficiency, Competitiveness and Capital Formation was originally prepared on behalf of The Business Roundtable and was submitted in the original rulemaking comment period, which ended in August 2009. The report previously influenced the SEC to re-open the comment process in December 2009 to seek comment and input on Dr. Buckberg and Professor Macey’s report, two other submissions, and one memo prepared by SEC staff.

The report can be viewed here.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- Federal securities class action lawsuits in the first half of 2011 were filed at the second highest semi-annual rate in eight years, according to NERA Economic Consulting's biannual Recent Trends in Securities Class Action Litigation: 2011 Mid-year Review, released today. There were 130 filings of securities class actions from January to June of this year.

If this pace of filings is maintained, there will be 260 fillings by year-end in 2011—the highest level since 2002 and the fourth highest in the 16 years since the passage of the Private Securities Litigation Reform Act (PSLRA).

While filings have been brisk, average settlement size in the first half of 2011 has fallen sharply to $23 million, down from $108 million in 2010. The median settlement also fell substantially, to $6.3 million from an all-time high in 2010 of $11 million.
 
Foreign-Domiciled Firms Targeted

Over a third of federal securities class action lawsuits filed in the first half of 2011 were against foreign-domiciled issuers, a historical high and more than double the prior peak in 2004. In prior editions of NERA’s Trends report, the authors observed that foreign companies listed in the US are less likely to be sued than domestic issuers. Recently, however, there has been a sharp reversal of this pattern. Results for the first half of 2011 show that US-listed foreign-domiciled companies are now twice as likely to be sued as their US-domiciled counterparts.

Driving this trend are the 27 suits filed against companies domiciled in China—making up 60 percent of all suits against foreign-domiciled issuers. The majority of the securities class actions targeting Chinese-domiciled companies have focused on issues relating to financial reporting, including revenues, costs, profits, and cash.

"The increase in filings against foreign defendants is especially surprising in light of the June 2010 Supreme Court decision in Morrison v. National Australia Bank, which limits the scope of litigation against non-US companies," said co-author and NERA Senior Consultant Dr. Jordan Milev. "Any effect of Morrison on the incentive to file has been more than offset by the rapidly growing number and changing circumstances of US-listed Chinese companies," added co-author and NERA Senior Consultant Robert Patton.

Credit Crisis Litigation Continues to Decline

The downward trend of credit crisis securities class action litigation observed in 2010 by NERA Trends authors continued in the first half of 2011, with only eight cases tied to credit crisis litigation observed. Ponzi scheme filings have also declined from nine in 2010 to two so far in 2011.

Of the 245 credit crisis-related federal securities class actions filed in the past few years, as of June 2011, 79 have been dismissed and 23 have settled.

Additional Trends for the First Half of 2011

• 37 suits were filed in the first half of 2011 challenging the pricing of a merger or acquisition. While fewer than the 50 M&A pricing objection suits filed in the second half of 2010, this type of suit still comprised nearly 30 percent of all cases filed.
• 47 percent of securities class actions were filed within two weeks of the end of the proposed class period—compared to 29 percent in the previous four years.
• Accounting allegations were most frequent, characterizing 30 percent of recent filings. Breach of fiduciary duty was the second most common allegation, present in approximately 20 percent. Allegations involving product and operational defects (14 percent) and company-specific earnings guidance (12 percent) rounded out the top four allegations in first half of 2011 filings.
• The aggregate settlement value for 2011 is projected to be $1.7 billion, which would be the first time since 2001 that aggregate settlements have fallen below $2 billion.
• 58 percent of cases settled from January to June 2011 did so for less than $10 million, up from 41 percent in 2010.

Securities Class Action Trends Report Series

NERA has been analyzing trends in securities class actions for more than 15 years. Two reports are published per year: a mid-year study and an annual review at year’s end. This mid-year study was authored by NERA Senior Consultants Dr. Jordan Milev, Robert Patton, and Svetlana Starykh and includes data on filings, dismissals and settlements through 30 June 2011.

For more details, and to read the full report, visit: www.nera.com/recenttrends.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, announced today that Scott Bloomberg has joined the firm as a Vice President in its Energy, Environment, and Network Industries Practice. Mr. Bloomberg was formerly a Principal at an international economic consulting firm.

Mr. Bloomberg is an expert on the economic and strategic issues facing the energy sector and large energy consuming sectors, specializing in decision making under uncertainty, assessing national and regional effects of environmental regulations, and restructuring of energy markets. He has extensive experience analyzing the impacts of environmental and energy policies, conducting economic analysis to support clients involved in litigation, and providing forecasting, risk, cost-benefit, and other analyses to help guide strategic investment decisions.

“We are pleased to have Scott as a member of our energy and environment team,” said Mike King, Chair of NERA’s Energy, Environment, and Network Industries Practice. “His deep knowledge of the energy and environmental issues facing the utility and large energy consuming industries, his exceptional track record providing crucial regulatory and policy analysis, and his extensive experience will make him an invaluable asset to NERA and our clients.”

Mr. Bloomberg has published extensively on the impacts of energy and environmental regulations. He received an MBA from the University of Chicago and a BA degree in economics and sociology from Northwestern University.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA’s clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world’s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

NERA Economic Consulting Launches Trends Report Series on Regulatory Enforcement in the UK Financial Markets

NERA’s Proprietary Database Tracks Fines and Enforcement Activity since April 2002

London -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, announced today the release of an in-depth report analysing trends in regulatory enforcement by the UK Financial Services Authority (FSA).

In addition to a detailed analysis of trends since April 2002, the authors of Trends in Regulatory Enforcement in UK Financial Markets, NERA Vice President Paul Hinton and Senior Consultant Robert Patton, provide background on the role of financial penalties in enforcement, discussion of recent developments in enforcement, and a look ahead to expected changes in enforcement policy in the UK.

“As recently disclosed by the FSA, UK financial enforcement activity has reached record levels as measured by the number and aggregate amount of fines imposed. However, behind these headline figures is a more nuanced picture: aside from a handful of recent fines among the largest ever imposed, the average size of fines has actually declined slightly”, said Mr. Hinton. Mr. Patton added, “The FSA is imposing more fines than ever before, but not across the board; while enforcement has targeted certain conduct, such as unsuitable investments and mis-selling, market abuse cases against firms remain rare.”
 
Key Findings of Trends in Regulatory Enforcement in UK Financial Markets

• Aggregate fines assessed by the FSA rose to £98.6 million in the 2010/2011 fiscal year from £33.3 million in 2009/2010.
• The number of fines nearly doubled in 2010/11 as compared to the previous year, for both firms and individuals. For individuals, the number of fines assessed in 2010/11 was more than 10 times the average over the six years prior to 2008/09, before the FSA adopted a more assertive enforcement stance.
• The increased number of fines, imposition of several very large fines, and increase in the number and size of fines against individuals starting in 2008/09 are consistent with a shift from “light touch” enforcement to a tougher “credible deterrence” approach and a recent enforcement focus by the FSA on sanctions against individuals.
• A high proportion of the all-time top 10 fines have been assessed over the past three fiscal years, and in 2010/11 in particular. Excluding such exceptional fines, the average fine against individuals increased by 37 percent in 2010/11, while the average fine against firms outside the top 10 actually declined by 16 percent. The net effect of these two trends was a decline in average fine amounts, excluding exceptional fines, of 7 percent.
• The largest fine levied against an individual from April 2002 to March 2011 was £2.8 million, against Simon Eagle in May 2010 for market manipulation. This fine is nearly three times the second- largest fine for individual misconduct. The largest fine imposed on a firm to date was £33.3 million in June 2010 against J.P. Morgan Securities, for mishandling of client assets.

NERA has developed a proprietary database of fines and other enforcement activity by the FSA, covering the period beginning 1 April 2002, and has classified enforcement activity according to the underlying alleged misconduct described by the FSA. Additional findings in the report include:

• Over the past three years, 22 fines for insider dealing have dominated FSA fines for market integrity violations (behaviour that distorts or otherwise negatively affects financial markets). Fines for market integrity violations have been a relative rarity.
• Recent increases in the number of customer protection and compliance failure fines are mainly driven by action against "unsuitable investments & mis-selling", with 55 such fines over the past three years.

Trends in Regulatory Enforcement in UK Financial Markets can be downloaded from: www.EnforcementTrends.com.

NERA’s "Trends" Series

NERA has been analysing trends in enforcement and shareholder class action litigation for more than 15 years. Two reports analysing trends in US Securities and Exchange Commission enforcement actions are published each year. In addition, NERA publishes semi-annual reports analysing shareholder class action litigation trends in the US, and annual reports on trends in Australia, Japan, Italy, and Canada.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA’s clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world’s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- The Securities and Exchange Commission settled with 344 defendants in the first half of fiscal year 2011 (1H11), putting the agency on pace to settle with 688 defendants for the full year, compared to the 681 settlements in fiscal year 2010, according to NERA Economic Consulting's biannual SEC Settlements Trends report.

According to the authors of SEC Settlements Trends: 1H11 Update, while total SEC settlements have remained stable compared to the previous fiscal year, there has been a substantial shift in their composition. The number of company settlements jumped 43% to 114 -- for an annual pace of 228, compared to the 160 company settlements recorded in FY2010. However, individual settlements declined 12% in the first half of the year to 230, an annual pace of 460, compared to 521 in FY10.

"Although we have seen the share of individual settlements decline relative to company settlements, individual accountability has remained an important theme during the first half of the fiscal year. This is reflected in the fact that four of the 10 largest settlements over this period were with individuals," said NERA Vice President and Trends co-author Dr. James Overdahl.

Additional Settlement Trends

• For companies whose settlements included a monetary payment, the average amount declined to $6.0 million compared to $18.5 million in FY10. However, the median company settlement increased to $1.4 million, compared to $0.8 million in FY10.
• For individuals whose settlements include a monetary payment, the average was $4.48 million and median amount was $310,000. Both figures are greater than any full fiscal year since SOX was implemented.
• Public company misstatement settlements declined sharply in 1H11 to 33, an annual pace of 66, down 39% from the 108 settlements in FY10 and more than 60% from the post-SOX high of 170 in 2007.
• The SEC has only reached 25 insider trading settlements in 1H11, despite recent high-profile cases. If this pace is maintained, the agency will only reach 50 insider trading settlements in FY11, which would represent the lowest number in any year since SOX and a one-third drop from the 74 settlements reached in FY10.
• The SEC settled FCPA charges with 13 defendants in 1H11, putting it on pace to reach 26 settlements for the full fiscal year—a post-SOX high. FCPA median settlements values in 1H11 increased 40% relative to the post-SOX average.

Ten Largest Settlements in 1H11

Defendant	Amount (millions)
Milowe Allen Brost & Gary Allen Sorsenson	$310
US Pension Trust Corp & US College Trust Corp.	$113
Jacob "Kobi" Alexander - cofounder, Converse Technology	$54
Alcatel-Lucent, S.A.	$45
Joseph P. Nacchio, former CEO, Quest Communications Intl.	$45
Daniel Spitzer, controller, eighteen entities	$44
Banc of America Securities	$36
AXA Rosenberg Group	$25
BNY Mellon Securities LLC	$24
Pride International	$24

SEC Settlement Trends Report Series

You can download the report: SEC Settlements Trends: 1H11 Update, and find historical SEC settlements data and previous SEC settlements trends reports at www.SecuritiesLitigationTrends.com.

This report is authored by NERA Senior Consultant Jan Larsen, Senior Vice President Dr. Elaine Buckberg, and Vice President Dr. James A. Overdahl.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.

New York -- On 25 April 2011, China's Supreme People's Court issued draft rules on litigation of civil antitrust cases. The draft, entitled "Supreme People's Court Provisions on Issues Concerning the Trial of Monopoly Civil Dispute Cases (Draft for Comment)," is open for public comment until 1 June 2011. These rules, which are expected to be finalized soon thereafter, will provide guidance to private parties involved in antitrust litigation in China.
 
Several of the Articles specifically address the use of experts. Article 9, which specifies how market dominance may be established, states that reports issued by qualified independent organization(s) involving market surveys, economic analysis, specialized research, and statistical results may be admitted by the courts as preliminary evidence to establish the presumption of market dominance. However, it is not clear from the draft rules what types of independent organizations will be regarded as "qualified."

Article 13 addresses expert opinion more generally. It identifies two ways that expert opinion may be put before the court. First, a party may apply to the court to allow person(s) with professional knowledge in economics or the industry to appear in court and present their opinions on specific issues relevant to the case. Second, a party may request that the court allow an independent professional organization(s) or person(s) to submit to the court a report based on market surveys or economic analysis. The professional may be retained by the party or appointed by the court.
 
The use of experts described in the draft rules has some similarities to the expert witness system in the United States. In both systems, experts may issue reports and offer opinions through a court appearance. In both systems, an expert may be retained by a party or appointed by the court (in the United States, a court may appoint a “special master”). One notable distinction between the two systems is that, in China, the term “witness” applies only to people who have actually "witnessed" factual matters related to the event in dispute. Thus, in China, an expert making a presentation in court would not be called an "expert witness," but rather an "expert" or “professional” instead.

The full text of the draft rules is available (in Chinese) at www.court.gov.cn/gzhd/zqyj/201104/t20110425_19850.htm.

With offices in Beijing and Shanghai, NERA combines local knowledge with international expertise to provide economic consulting services in Antitrust, Intellectual Property, and Transfer Pricing in China. For more information, please contact:

Dr. Alan Cox
Senior Vice President
alan.cox@nera.com

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA’s clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world’s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.