Securities Class Action Settlements Continue Upward Trend In 2016 with Record Number Of Mega Settlements: The $6 Billion Total In Approved Settlements Almost Doubles The Previous Year’s Amount

Details

Publish Date:
May 30, 2017
Author(s):
  • Bulan, Laarni T.,
  • Ryan, Ellen M.,
  • Simmons, Laura E.
Source:
The National Law Review
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Summary

U.S. courts approved the highest number of securities class action settlements since 2010. Continuing the growth observed in the prior year, there were 85 approved settlements in 2016, five more than in 2015. Both years are a substantial increase over the annual numbers from 2011 through 2014.

As reported in Securities Class Action Settlements—2016 Review and Analysis, the $6 billion of approved settlements was nearly double the total settlement value in 2015. This increase was fueled by 10 mega settlements (settlements of $100 million or more), which accounted for 81 percent of all settlement dollars. The number of mega settlements in 2016 was the highest in 10 years and included two settlements over $1 billion.

“These data continue to emphasize the importance of mega cases and mega settlements, often concentrated in industries with large market capitalization components, like pharmaceuticals and finance,” observed Joseph Grundfest, Professor of Law and Business at Stanford Law School. “Class action securities fraud litigation is a hit-driven business in which a small number of cases regularly account for the lion’s share of plaintiff recoveries.”

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