Number of Securities Class Action Settlements at Highest Level Since 2010

Details

Publish Date:
January 25, 2017
Author(s):
  • Laarni T. Bulan
Source:
The National Law Review
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Summary

There were 80 securities class action settlements approved in 2015, the highest number since 2010. Total settlement dollars rose to more than $3 billion, an increase of 184 percent over the historic low in 2014.

The surge in securities class action settlements in 2015 can be attributed in part to three consecutive year-over-year increases in the number of case filings. The increases in case filings may suggest that higher numbers of settlements will persist in the near future. While settlement volume fluctuates from year to year, the size of the typical settlement tends to remain fairly consistent.

“Settlements in class action securities litigation can be viewed as rather predictable phenomena,” observed Professor Joseph A. Grundfest, director of the Stanford Law School Securities Class Action Clearinghouse. “You can only get a high settlement value for a strong case that alleges substantial damages, and those factors can often be assessed relatively early in the litigation process. When the number of mega filings is up, you can expect an increase in mega settlements three or more years down the road, with the larger settlements taking longer to reach, and that’s the process that seems to be at work in the 2015 settlement data.”

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