Here are the key takeaways from a recent Cornerstone Research report that’s summarized in this Cooley “Securities Litigation & Enforcement” note from Brett De Jarnette and Ziwei Xiao:
- The median settlement amount ($14 million) declined 10% from 2023, and the average settlement amount ($42.4 million) declined 13%. The median settlement amount for cases with only Securities Act claims ($10.3 million) declined even more and was down 26% compared to 2023.
- Total settlement dollars declined 8%, but the total number of settlements increased; this dynamic is attributable to a smaller number of mega-settlements ($100 million+).
- Seven mega-settlements made up 54% of the total settlement dollars, down from nine in 2023. The largest mega-settlement was $490 million, down from $1 billion in 2023.
- Seventeen settlements were related to special purpose acquisition companies (SPACs), a marked increase compared to 2017 – 2023, which only saw six SPAC-related settlements in total.
- Cases with an accompanying derivative action had median plaintiff-style damages that were 47% higher than those without one; this represents the largest percentage difference in the past five years.
- 2024 saw lower institutional investor involvement on the plaintiff side and increased financial distress on the issuer defendant side.
Authored by
Broc Romanek