Investors are pursuing more lawsuits accusing companies of fraud, according to a new study, but filings may plunge if the U.S. Supreme Court decides soon to remake the legal landscape, Reuters reported
 

Plaintiffs filed 166 federal securities lawsuits seeking class-action status in 2013, up 9 percent from 152 in 2012, according to a report today from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.

Filings nonetheless were the third fewest over the last 15 years.

 

The Supreme Court, in a case involving Halliburton Co. to be argued on March 5, could accelerate that decline as it re-examines a 1988 precedent that made it easier to pursue class actions against companies.

 

In that decision, Basic Inc v. Levinson, the court let shareholders who claimed they were defrauded by false statements in securities filings rely on a "fraud on the market" presumption that stock prices reflected those false statements, rather than demonstrate that they relied on actual filings.

 

A narrowing or overruling of Basic could have "seismic" implications, Joseph Grundfest, a Stanford University law professor who works with Cornerstone and a former commissioner of the U.S. Securities and Exchange Commission, told Reuters.