SOURCE: The Corporate Library

November 29, 2006 10:22 ET

Enhanced Rating System Developed to Help Predict Securities Class Action Lawsuit Risk

The Corporate Library's New Screen Detects the Most Likely -- and Least Likely -- Public Companies to Face a Securities Class Action

PORTLAND, ME -- (MARKET WIRE) -- November 29, 2006 -- Using a series of newly-developed screens that draw upon governance and performance data, The Corporate Library today released its report identifying the 75 most likely -- and 50 least likely -- public companies to face a Securities Class Action (SCA) lawsuit within the next 18 months.

The new analysis identifies six key factors which, in combination with performance fundamentals such as share price volatility and leverage, provide a reliable tool for assessing the probability of SCAs. The key factors are:

--  Excessive CEO compensation
--  Director age, tenure, over-commitment, and lack of independence
--  Institutional owners
--  Industry-specific risk
--  Company size
--  Share trading volume

This latest study, a follow up to The Corporate Library's previous class action studies published in April 2005 and July 2006, examines more closely the probability of occurrence of SCAs. Suggestions for reducing the risks are also provided.

The full report can be purchased from The Corporate Library's online store:

About The Corporate Library

The Corporate Library, headquartered in Portland, Maine, is the leading independent resource for corporate governance and compensation information and analysis of public U.S. corporations. Founded in 1999, it continues to be the authority on corporate governance matters, as evidenced by the frequency with which key media, business and government leaders seek its unique insight and objective perspectives. Additional information on The Corporate Library and its suite of online corporate governance data and analysis products can be found on its website at

Contact Information

  • Contact:
    Melanie Bond
    Media Relations
    The Corporate Library
    Email Contact
    207 874-6921