Cornerstone Research has released its yearly securities
class action litigation report and found dramatic increases in the number of
settlements and in the average settlement pools. (The link to the full report
Cornerstone focused on federal securities class actions,
specifically cases alleging Rule 10b-5, Section 11, and Section 12(a)(2)
allegations. These suits make up the majority of the securities litigations which investors
are able to participate in each year. The Cornerstone team reviewed 2,116 class
actions from 1996 (the year after the passage of the Private Securities
Litigation Reform Act) until 2022. Here are some of the key data points:
--The average number of federal securities settlements
between 2017 and 2021 was 79. There were 87 in 2021, and 105 last year.
--This spike is largely thanks to the increase in securities
class actions filed between 2018 and 2020. In those years filings spiked from the
typical low 200s per year to over 400 in ’18 and ’19 to nearly 325 in 2020.
--The average settlement increased 63% over 2021, with the
average fund at $36.2 million.
--There were eight mega=-settlements, which are settlements
over $100 million.
A longer summary of the report is available here:
And the full report is here:
Sound Busy? Federal Cases Are Only Part of the Securities
Class Action Landscape
Take those federal cases and throw in securities litigations
in state courts, SEC Fair Funds, and Canadian settlements, and there were 150
funds to participate in last year. Add international litigations beyond Canada,
and there are dozens more.
Keeping up with the flow can be a full-time job. Of course,
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