Every few months, it seems, a new report counting the number of securities class actions filed year to date is released, and sweeping conclusions often follow. The latest such report issued by Stanford Law School and Cornerstone Research finds that securities class action lawsuits fell 24 percent in 2009, prompting the WSJ's Law Blog to ask today, "Is The Golden Era of Securities Class-Action Suits Coming to An End?"

Of course, it was just a few weeks ago that another report from NERA found that under a slightly different counting methodology, 2009 filings projected to be just slightly below the number for 2008 (235 versus 253), but well within the 1997-2004 average of 231 annual filings. And it was just five months ago that an Advisen report noted a tiny blip in filings in the first few weeks of July 2009, leading the American Lawyer to hopefully declare that a "New Report Says Securities Filings Are Back Up."

After watching these zigs and zags for a few years, I have begun to tune some of the more dramatic conclusions out. I did notice a Bloomberg article today about the the most recent Cornerstone report, however, due to a colorful quote explaining the drop in 2009 filings:

“That pig has moved through the python,” Stanford Law School Professor Joseph Grundfest said of the financial traumas that helped trigger the recession. “All of the major cases that were profitable have already been filed,” he said. “The pool is in effect fished out.”

Hmmmm. Pig, python... where have I heard that before? Oh yeah! It was four years ago nearly to the day, when Cornerstone's 2005 report found a 17% decline in 2005 securities fraud class actions compared to 2004. Commenting on that report, and its finding that total market capitalization losses and "dollar disclosure losses" decreased significantly from 2004, Prof. Grundfest similarly declared that

"The pig may have moved through the python," said Stanford Law School Professor Joseph Grundfest, Director of the Securities Class Action Clearinghouse and former Commissioner of the Securities and Exchange Commission. "Two factors are likely responsible for the decline. First, lawsuits arising from the dramatic boom and bust of U.S. equities in the late 1990s and early 2000s are now largely behind us. Second, improved governance in the wake of the Enron and WorldCom frauds may have reduced the actual incidence of fraud."

The 2005 decline in the overall number of cases filed did not last, however. After an even lower number of cases were filed in 2006 (119), the number of securities class actions rebounded in 2007 (177 cases) and 2008 (223 cases) to levels roughly in line with what had been seen prior to the drop in 2005.

So is the pig finally through the python now? Who knows. Until there is some sustained drop in the overall number of cases, however, it is probably too early to declare the "golden era" over. As Bill Lerach said about the 2005 report four years ago, "I don't think you can draw any conclusions. The ocean comes in, the ocean goes out. It doesn't feel any different to me.''