Number of defendants settling with SEC is down 8% in ’09
The number of defendants agreeing to settlements with the Securities and Exchange Commission dropped for the second straight time in fiscal 2009, declining nearly 8% to 626 defendants from 673 in fiscal 2008, according to a report released today by NERA Economic Consulting.
The number of defendants agreeing to settlements with the Securities and Exchange Commission dropped for the second straight time in fiscal 2009, declining nearly 8% to 626 defendants from 673 in fiscal 2008, according to a report released today by NERA Economic Consulting.
While the number of defendants dropped, the average settlement more than doubled to $10.7 million, from $4.7 million in fiscal 2008 said NERA, which tracks securities litigation.
That rise in average settlement value was due to three large settlements: a $200 million settlement with UBS AG for allegedly helping customers evade U.S. taxes, a $350 million settlement with Siemens Aktiengesellschaft of Germany, and $177 million with Halliburton Co. and its former subsidiary KBR Inc.
In both the Siemens and Halliburton cases, the companies were accused of violating the Foreign Corrupt Practices Act.
Without those three large settlements, the average settlement would have been $4.4 million, according to Elaine Buckberg, senior vice president of NERA Economic Consulting. “NERA” stands for National Economic Research Associates.
It’s not clear why the number of defendants declined, and “I hesitate to interpret the decline as predicting a further decline in 2010,” said Ms. Buckberg. “The SEC is under enormous pressure to be stronger on enforcement.”
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