The steep downturn in the economy seems to be triggering an equally sharp rise in the number of shareholder suits. And companies that have launched initial public offerings are now facing a particularly high risk of being sued, according to PricewaterhouseCoopers.

In fact, a total of 263 federal class-action lawsuits alleging securities fraud have been filed already this year, PwC executives note in a press release. That compares with 201 class-action lawsuits filed in all of 2000, and 207 cases in 1999, as reported in PwC’s 2000 Securities Litigation Study.

Contributing to this year litigiousness are the 143 lawsuits related that name IPO underwriters and companies that have recently gone public as defendants. Called “laddering cases,” such suits generally allege that companies and their underwriters allocated shares in hot IPOs in exchange for excessive and undisclosed commissions and for investor guarantees to buy added shares in the after-market. Every major investment bank has been named in the “laddering cases” and many have been named in lawsuits, according to PwC.

Most companies named in these lawsuits involve computer services, telecom companies, and other outfits in the high-tech sector that have been taken public in the last three years, according to the accounting firm.

Shareholder class-action lawsuits alleging accounting fraud also continue at high levels. Through June 30, nearly 48 percent of non-IPO related cases filed allege financial fraud, according to PwC. Last year, fifty-three percent of all cases filed in 2000 contained financial fraud allegations.

At least 58 percent of the 2001 financial fraud cases involve companies that have restated earnings or plan to restate earnings. Last year 47 percent of the accounting cases involved a restatement of earnings, according to the PwC study.