White Paper

The Critical Role of Defense Counsel in Securities Class Actions: BHSI’s Approach

Working to help insureds find the legal representation they need.

White Paper Summary

Securities class actions are an unfortunate fact of life for U.S. public companies large and small. When a company and their directors and officers are sued for securities fraud, finding the right defense counsel is mission critical. The securities defense bar is a small subset of all U.S. law firms, but choosing the right firm, and the right attorney within the right firm, remains a daunting task.

How can the directors and officers named as defendants in a securities class action get it right?

Berkshire Hathaway Specialty Insurance (BHSI) believes it has an answer. BHSI maintains a list of securities defense firms that, in its view, provide the best defense in this crucial area. But their “Preferred Counsel” program goes even further, offering insureds several financial and other incentives unique in the D&O marketplace.

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In 2024, there were 220 “core” securities class actions filed (i.e., alleging 10b5 and section 11 violations), as compared with 209 filings in 2023. Claimed damages rose by 23 percent last year, with 27 lawsuits alleging damages of over $5 billion. Likewise, settlement numbers followed this trend, with typical settlements ranging between $30 million and $40 million. Ten securities class actions settled for $100 million or more, and the total value of all settlements in 2024 was over $6 billion. In addition to traditional securities class actions, “mega” shareholder derivative cases continue to rise, with many of them settling at $100 million or more.

To learn more about Berkshire Hathaway Specialty Insurance, please visit their website.

Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, accident and health, medical stop loss, and homeowners insurance. The actual and final terms of coverage for all product lines may vary. It underwrites on the paper of Berkshire Hathaway's National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor's.

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