CORRECTING AND REPLACING Securities Class Action Settlement Totals Down 60 Percent...

CORRECTING AND REPLACING Securities Class Action Settlement Totals Down 60 Percent in 2007, Finds Cornerstone Research

Number of Settlements with Estimated Damages above $1 Billion
Lowest since 2003, But Median Settlement Reaches Highest Level Ever at
$9 Million
WASHINGTON--(Business Wire)--
Ninth graph, first sentence of release should read: The report
also notes the waning dominance, on a combined basis, of two prominent
plaintiff class action law firms --Lerach Coughlin Stoia Geller Rudman
& Robbins (now known as Coughlin Stoia Geller Rudman & Robbins) and
Milberg Weiss Bershad & Schulman (now known as Milberg)-- in terms of
the number of cases settled (sted The report also notes the waning
dominance, in terms of the number of cases settled, of two prominent
plaintiff class action law firms recently involved in conspiracy
charges--Lerach Coughlin Stoia Geller Rudman & Robbins (now known as
Coughlin Stoia Geller Rudman & Robbins) and Milberg Weiss Bershad &
Schulman (now known as Milberg).

The corrected release reads:

SECURITIES CLASS ACTION SETTLEMENT TOTALS DOWN 60 PERCENT IN 2007,
FINDS CORNERSTONE RESEARCH

Number of Settlements with Estimated Damages above $1 Billion
Lowest since 2003, But Median Settlement Reaches Highest Level Ever at
$9 Million

A report released today by Cornerstone Research finds that the
number of securities class action cases settled last year rose 21
percent, from 92 in 2006 to 111 in 2007. The total value of these
settlements, however, plummeted 60 percent from the all-time high of
$17.2 billion reported in 2006 to $7 billion in 2007. More than 70
percent of this drop was due to the largest settlement in history, the
now $7.2 billion Enron case settlement, the majority of which was
approved in 2006.

Aggregate settlements in 2007 are dramatically influenced by the
$3.2 billion Tyco International settlement, which accounts for almost
45 percent of the total value of settlements approved in 2007, and is
the third largest case settlement in history behind Enron and WorldCom
($6.2 billion). Tyco was the only settlement approved in 2007 to
exceed $1 billion (compared with four in 2006, excluding Enron) and is
only the seventh settlement in history above $1 billion.

Overall, the number of settlements in excess of $100 million
declined from fourteen in 2006 to only nine in 2007. In sharp contrast
to the decrease in settlements in excess of $100 million, middle range
settlements--those of $10-20 million--increased in 2007. In 2006 such
settlements accounted for just over 10 percent of the total; in 2007
they accounted for nearly 25 percent. In addition, in 2007 settlements
for less than $5 million declined to about 35 percent of the total. As
a result, the median settlement spiked to $9 million--the highest
amount to date. (The median represents the point at which half the
data points are greater and half are smaller; the midpoint.)

"For the past several years a relatively small number of
settlements in excess of $100 million have been the focus of attention
in analyses of securities case settlements, even though more than half
of securities cases continued to settle for less than $10 million.
What will be interesting going forward is to see whether the upward
shift emerging from the 2007 data for more typical cases persists into
future years," said Dr. Laura Simmons, a senior advisor to Cornerstone
Research and an author of the report.

Estimated damages are by far the most important determinant of
settlement amounts. For purposes of the report, "estimated damages"
are based on a highly simplified model historically used by plaintiffs
to estimate the amount of shares damaged and the amount of alleged
stock price inflation. Following the unusually high average estimated
damages for settled cases in 2006, 2007 saw a return to the 2003-05
average. While 2006 had eighteen settlements with estimated damages in
excess of $5 billion, 2007 had just ten. In 2007 only 24 percent of
settlements (twenty-seven cases) involved estimated damages of $1
billion or more--the lowest percentage since 2003.

"It seems clear that the aggregate dollar value of settlements
over the next two or three years is likely to decline significantly
because the inventory of large cases in the pipeline just isn't there.
The interesting open question is whether the subprime crisis will
cause an uptick in securities fraud settlement activity that might,
given settlement cycles in the litigation industry, only become
apparent three to five years from now," said Stanford Law School
Professor Joseph Grundfest, director of the Securities Class Action
Clearinghouse (sponsored in cooperation with Cornerstone Research),
co-director of the Rock Center on Corporate Governance, and former
commissioner of the Securities and Exchange Commission.

Institutional investor involvement continued to increase, with
almost 60 percent of cases settled in 2007 including institutions as
lead plaintiffs. Typically, cases involving institutional investors as
lead plaintiffs, particularly public pension plans, are associated
with significantly higher settlement amounts, even controlling for
other factors that affect settlement amounts.

As in 2006, accounting issues continued to be included in the
allegations of more than 55 percent of all settled cases. But for the
second year in a row, the percentage of cases involving allegations of
financial statement restatements declined, representing just 30
percent of settlements in 2007.

The report also notes the waning dominance, on a combined basis,
of two prominent plaintiff class action law firms --Lerach Coughlin
Stoia Geller Rudman & Robbins (now known as Coughlin Stoia Geller
Rudman & Robbins) and Milberg Weiss Bershad & Schulman (now known as
Milberg)-- in terms of the number of cases settled. Until 2007 the two
firms had long served as lead or co-lead plaintiff counsel in more
than half of securities class action settlements, but in 2007 their
combined share slipped to 46 percent.

Finally, the number of settled cases involving companion
derivative actions has been increasing in recent years. More than 55
percent of cases settled in 2007 were accompanied by the filing of a
derivative action, compared with 45 percent in 2006 and 35 percent in
2005. While the settlement of a derivative action does not necessarily
result in a cash payment, settlements for class actions accompanied by
derivative cases are significantly higher than for cases not involving
them.

A full copy of Cornerstone Research's Securities Class Action
Settlements: 2007 Review and Analysis is available at
securities.cornerstone.com. In addition, Dr. Simmons and Professor
Grundfest are available for interviews.

Cornerstone Research provides financial and economic analysis in
litigation and regulatory proceedings, with a focus on securities,
antitrust, intellectual property, financial institutions, energy, and
accounting. Cornerstone Research also cosponsors Stanford Law School's
Securities Class Action Clearinghouse, the leading source of data and
analysis on the financial and economic characteristics of securities
class action litigation. Information about Cornerstone Research's
consulting services is available at www.cornerstone.com.

Cornerstone Research
Dr. Laura Simmons, 757-546-5117
lsimmons@cornerstone.com
or
Hellerman Baretz
John Hellerman, 202-274-4762
jhellerman@hellermanbaretz.com

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