Cornerstone Research: Securities Class Action Settlements Stay on Pace Despite Pandemic

By Erin Cahill.
Updated Mar 17, 2021

WASHINGTON (PRWEB) March 17, 2021 - Despite the unprecedented economic disruption that the COVID-19 pandemic caused in 2020, settlements in securities class actions generally continued at a pace typical of recent years, according to a new Cornerstone Research report released today.

The report, Securities Class Action Settlements2020 Review and Analysis, found that courts approved 77 settlements totaling $4.2 billion in 2020, compared to 74 settlements totaling $2.1 billion the previous year. There were six mega settlements (equal to or greater than $100 million) in 2020, ranging from $149 million to $1.2 billion. Excluding settlements over $1 billion, total settlement values declined by 4% in 2020 over 2019.The median settlement value of $10.1 million in 2020 fell 13% from 2019 (adjusted for inflation) but was still 19% higher than the prior nine-year median. The average settlement amount in 2020 was $54.5 million, representing a 15% increase over the prior nine-year average.

The report also analyzed simplified tiered damages, a measure of potential shareholder losses. In 2020, median simplified tiered damages at $326 million was the second highest in the last decade.

Commentary Laura E. Simmons, a Cornerstone Research senior advisor and report coauthor: Any disruption in settlement rates as a result of the COVID-19 pandemic appears to have been temporary, with the overall number of settlements for 2020 in line with recent years. It will likely be at least a couple of years before we learn whether COVID-19-related allegations have had an impact on other settlement trends.

Laarni T. Bulan, a Cornerstone Research principal and report coauthor: In several respects, after an unusual year in 2019, cases settled in 2020 represented a return to levels prevalent in prior years. However, one prominent trend continuing from 2019 is an increase in the size of issuer defendant firms.

Highlights

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