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The annual study by the school's Securities Class Action Clearinghouse reports securities fraud class actions decreased by 38 percent since 2005, plunging from 178 filings to just 110, making this year's numbers nearly 43 percent lower than the ten-year historical average of 193.

The study, conducted with Cornerstone Research, attributes the record low numbers of securities fraud class action filings in 2006 to tougher enforcement and a strong stock market combined with lower stock price volatility.

"The federal government is a much more aggressive adversary than the private bar, and the feds can force a level of compliance that private class action lawyers could never touch," said Stanford Law School Professor Joseph Grundfest, director of the Securities Class Action Clearinghouse. Grundfest served as Securities and Exchange Commission Commissioner from 1985 to 1990. "I think we are seeing the effects of a tougher and smarter campaign against white collar fraud by the SEC and Department of Justice."

However, there were more allegations of specific accounting irregularities in the complaints filed in 2006 compared to 2005, a trend that is consistent with the previous year's findings and indicates a continued concern over the quality of financial reporting.

There was a more than 70 percent spike in the percentage of cases involving "other" accounting allegations, jumping from 37 percent of all accounting allegations in 2005 to 63 percent in 2006. Almost half of the "other" accounting allegations were related to stock options issuances.