Securities Class Action Settlements Held Steady in 2020 Despite Pandemic

March 26, 2021

Securities class action settlements for 2020 generally kept pace with recent years despite the pandemic, according to a recent report from Cornerstone Research.

The report, “Securities Class Action Settlements—2020 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. However, excluding settlements over $1 billion, total settlement values declined by 4 percent in 2020 over 2019, the report said.

The median settlement value of $10.1 million in 2020 was down 13 percent from 2019 (adjusted for inflation) but was still 19 percent higher than the prior nine-year median. The average settlement doubled from $27.8 million in 2019 to $54.5 million in 2020 but was only 15 percent higher than the prior nine-year average.

“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,” said Laura E. Simmons, a Cornerstone Research senior adviser and co-author of the report.

Among the report’s other highlights:

Source: Cornerstone Research