Security Frauds Fall to a 10-Year Low in 2006

Securities fraud suits fell to a 10-year low in 2006 due to a rising stock market, increased corporate controls, and the indictment of one of the top investor law firms on charges it paid illegal kickbacks to clients.

Shareholders sued 120 companies for stock fraud this year through Dec. 29, according to data compiled by Bloomberg and the Stanford Law School Securities Class Action Clearinghouse. The total is the lowest since 1996, a year after Congress passed laws aimed at curbing securities fraud litigation.

The decline may stem from increased corporate governance rules and fraud prosecutions since 2002. That year, stock fraud suits hit a record-high of 267 after an accounting scandal forced Enron Corp. to file the second biggest bankruptcy in U.S. history.
(http://www.bloomberg.com/apps/news?pid=20601109&sid=aVjHYaMwi1.E&refer=home)