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Securities Class Action Settlements Stay on Pace Despite Pandemic

Median settlement value in 2020 declined 13% from 2018/2019 levels.

Washington – March 17, 2021 – Despite the unprecedented economic disruption that the COVID-19 pandemic caused in 2020, settlements in securities class actions generally continued at a pace typical of recent years, according to a new Cornerstone Research report released today.

The report, Securities Class Action Settlements2020 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. Excluding settlements over $1 billion, total settlement values declined by 4% in 2020 over 2019.

The median settlement value of $10.1 million in 2020 fell 13% from 2019 (adjusted for inflation) but was still 19% higher than the prior nine-year median. The average settlement amount in 2020 was $54.5 million, representing a 15% increase over the prior nine-year average.

The report also analyzed “simplified tiered damages,” a measure of potential shareholder losses. In 2020, median “simplified tiered damages” at $326 million was the second highest in the last decade.


Laura E. Simmons, a Cornerstone Research senior advisor and report coauthor: “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.”

Laarni T. Bulan, a Cornerstone Research principal and report coauthor: “In several respects, after an unusual year in 2019, cases settled in 2020 represented a return to levels prevalent in prior years. However, one prominent trend continuing from 2019 is an increase in the size of issuer defendant firms.”


  • 45% of cases settled for between $5 million and $25 million in 2020, a return to pre-2019 levels.

  • For cases with Rule 10b-5 claims, the median settlement as a percentage of “simplified tiered damages” was 5.3% in 2020, slightly higher than prior years.

  • Measured by median total assets, the size of issuer defendant firms involved in settled cases in 2020 increased by 34% over 2019 and by more than 125% over the previous nine years.

  • The proportion of settled cases alleging GAAP violations in 2020 was 42%, among the lowest of all post–Reform Act years.

  • The frequency of settled cases involving a corresponding Securities and Exchange Commission action fell 32% from the prior year.

  • 55% of settled cases involved an accompanying derivative action, the second-highest rate over the last 10 years.

Read: Securities Class Action Settlements—2020 Review and Analysis.

Copyright ©2021 Cornerstone ResearchNational Law Review, Volume XI, Number 79

About this Author

Laura E. Simmons, CPA, Certified Public Accountant, Finance Consulting, Cornerstone Research
Senior Advisor

Laura Simmons is a certified public accountant (CPA) and has more than twenty years of experience in accounting practice and economic and financial consulting. She has focused on damages and liability issues in litigation involving securities and the Employee Retirement Income Security Act, as well as on accounting issues arising in a variety of complex commercial litigation matters. She has served as a testifying expert in cases involving accounting analyses, securities case damages, and research on securities lawsuits.

Dr. Simmons’s research...

Laarni Bulan Financial & Securities Cornerstone Research

Laarni Bulan specializes in the area of finance, consulting on cases related to financial institutions, securities, market microstructure, company valuation, insider trading, and real estate markets. Dr. Bulan leads large case teams on complex government investigations, regulatory matters, securities class actions, and white collar litigation. She works closely with experts in preparation for deposition and trial.

Specifically, her case experience includes:

  • Analysis of the liquidity and capital position of large financial institutions during the credit crisis
  • ...