PHILADELPHIA--(BUSINESS WIRE)--ACE USA, the U.S.-based retail operating division of the ACE Group of Companies, today launched a new audio podcast (or Internet-distributed program), discussing the broader issues connected with securities, derivative and regulatory litigation against today’s executives. In the podcast, Carol Zacharias, Senior Vice President and Chief Counsel, ACE Professional Risk, discusses her white paper,“The Return of D&O Litigation: Trends Driving Increasing Costs and Frequency of Litigation Against Corporate Directors and Officers,” and provides an informative overview of the trends and factors behind the escalation of case filings against directors and officers and the rising severity of settlements and judgments.
“Declining securities class action filings in recent years have raised the question of whether the strictures of the Sarbanes-Oxley Act of 2002 have worked, heralding a new era of greater transparency, less fraud, and hence fewer cases—particularly those against directors and officers,” said Ms. Zacharias. “On the contrary, we’re seeing a marked increase in securities class action litigation and a significant increase in case values. For instance, 2007 securities class action settlements exceeded those in previous years by 15 percent to 46 percent, depending upon the measurement.” She explains that median settlements increased by 30 percent, from $6.9 million to $9 million and average settlements increased by 15 percent, from $54.7 million in the years prior to 2007 to $62.7 million in 2007.
Ms. Zacharias commented further on her findings, “There are some common characteristics and elements in these cases, but certainly the most important driver is increasing investor losses, and a significant driver of those losses today are the credit and subprime problems.” She explained that median investor losses for cases settled in 2007 were $310 million, whereas median investor losses for cases filed in 2007 were $355 million, a 15 percent increase and the highest in the past three years. “It appears that recently filed cases seek greater damages than those filed in prior years, which may translate into even more expensive settlements and judgments in the future.”
Ms. Zacharias commented on the typical plaintiff in a securities case. “Years ago, the shareholder was the typical plaintiff in a securities case. Today, the adversaries are much more varied and resourceful, making the cases more complex to litigate and settle.”
To access the ACE Professional Risk audio podcast program (approximately 26 minutes in length), please visitwww.aceusa.com/News/Pages/Podcasts.aspx. To access the white paper, please visitwww.aceusa.com/News/Pages/ArticlesSpeeches.aspx. The material presented in the podcast is not intended to provide legal or other expert advice. It is presented for general information only. Listeners of this podcast should consult legal counsel or other experts, as applicable, with any questions.
Staffed by a team of innovative underwriters, ACE Professional Risk is the operating unit within ACE USA, which distributes management liability, professional liability and surety products through retail brokers throughout the U.S. and Canada. For more information about ACE Professional Risk and its range of products and services, please visit www.aceprofessionalrisk.com.
ACE USA is the U.S.-based retail operating division of the ACE Group of Companies, headed by ACE Limited (NYSE:ACE), and is rated A+ (Superior) by A.M. Best Company and A+ (Strong) by Standard & Poor’s. ACE USA, through its underwriting companies, provides insurance products and services throughout the U.S. Additional information on ACE USA and its products and services can be found at www.aceusa.com. The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients around the world.