Federal securities-fraud lawsuits rose 31% to 224 filing in 2002 from 2001, according to a report by Stanford Law School and Cornerstone Research, a financial and legal research firm in Boston. The rise in securities-fraud lawsuits is linked to the growing number of companies restating their earnings because of accounting problems.

“Financial restatements are the engine of class actions today,” says Stanford law professor Joseph Grundfest, a former commissioner for the Securities and Exchange Commission. According to the General Accounting Office, 225 companies restated their earnings last year.

(via USA Today)