EU Companies Wary Of U.S. Court System, D&O Claims
European companies doing business in the U.S. are vulnerable to securities legal action in the U.S., especially if their shares are traded on U.S. exchanges and that number is rising, according to a report from Advisen.
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The number of lawsuits reflects a trend where shareholder lawsuits filed in European courts are on the rise, prompting demand for directors and officers coverage, according to an Advisen study, "European D&O Insurance Market Reforms Cause a Shifting Landscape."
Advisen says the number of securities lawsuits filed against European companies and their shareholders in U.S. courts has mushroomed in recent years - from 15 suits in 2005 to 44 in 2008; 50 in 2010; and at an annualized rate of 52 in the first quarter of 2011.
Growth in new suit filings occurred in 2010 and first-quarter 2011 despite the falloff in credit crisis- and Madoff-related suits, which dominated in 2008 and 2009. Of all suits filed since 2005, 68 percent were filed since 2008, according to Advisen.
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