‘Trigger-Happy’ Investors Boost IPO Insurance Through Litigation

Investor lawsuits filed in the wake of share sales by Groupon Inc. and Deutsche Telekom AG are boosting the appeal of insurance for public offerings.

Almost 19 percent of the 3,510 initial public offerings on a U.S. stock exchange between 1996 and 2009 were defendants in at least one U.S. securities class-action, according to Cornerstone Research. Groupon, the biggest online coupon company that has slumped by more than half since its November IPO, is being sued by an investor after the firm reported a “material weakness” in its financial controls on March 30.