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Time to Settlement and Case Complexity: An Excerpt from Accounting Class Action Filings and Settlements—2019 Review and Analysis

In 2019, 15 percent of cases settled within two years of filing, consistent with the rate over the last 10 years. The average time from filing to settlement in 2019 was 3.3 years.

Compared to cases that settled more quickly, cases that required three to five years to settle in 2019 had a higher frequency of factors such as a public pension as a lead plaintiff and/or the presence of a corresponding SEC action.

Only 7 percent of cases in 2019 took more than five years to settle, the lowest rate in the past decade. Of these, 80 percent involved institutional investors. The median assets of the defendant firms in these cases were also substantially higher at $68 billion, compared to a median of $1.2 billion in other cases.

In 2019, cases that took more than five years to settle had a lower median settlement amount than cases that took three to five years to settle. This is despite the higher median “simplified tiered damages” of $602 million for cases that took more than five years to settle, compared to $375 million for cases that took three to five years to settle.

Median “simplified tiered damages” for Rule 10b-5 cases settling in less than two years were substantially smaller compared to settlements that took longer to resolve.

The number of docket entries as of the settlement may reflect case complexity. This factor has also been used in prior research as a proxy for attorney effort.[i] The number of docket entries is highly correlated with the duration from filing to settlement hearing date, issuer size, criminal allegations, accounting allegations, as well as the size of “simplified tiered damages.” Median docket entries for cases settled in 2019 were largely unchanged from prior years, but the average number of docket entries reached its highest level in the past decade.

Figure 12: Median Settlement by Duration from Filing Date to Settlement Hearing Date 2010–2019 (Dollars in millions)

Median Settlement


[i]       Docket entries reflect the number of entries on the court docket for events in the litigation and have been used in prior research as a proxy for the amount of plaintiff attorney effort involved in resolving securities cases. See Laura Simmons, “The Importance of Merit-Based Factors in the Resolution of 10b-5 Litigation,” University of North Carolina at Chapel Hill Doctoral Dissertation, 1996; Michael A. Perino, “Institutional Activism through Litigation: An Empirical Analysis of Public Pension Fund Participation in Securities Class Actions,” St. John’s Legal Studies Research Paper No. 06-0055, 2006. 

Read Cornerstone Research report Securities Class Action Settlements—2019 Review and Analysis.

Securities Class Action Settlement Median Value Remains Historically High in 2019

Copyright ©2020 Cornerstone Research


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
  • Examination of the underwriting and monitoring practices, and the performance of asset-backed commercial paper conduits during the financial crisis
  • Analysis of liquidity in the municipal bond market during the financial crisis
  • Examination of allegations of market and benchmark manipulation and collusive behavior in the markets for credit default swaps and foreign exchange
  • Analysis of a broker-dealer’s alleged improper trade clearing and settlement procedures
  • Merger transaction valuations, including valuations of a large financial institution and a high-technology firm
  • Analysis of the materiality of nonpublic information and alleged insider trading violations of corporate executive defendants
  • Analysis of the impact of the financial crisis on real estate markets and investments


Dr. Bulan has published numerous articles in peer-reviewed journals. Her research covers dividend policy, capital structure, executive compensation, corporate governance, and real options. Her authored or coauthored articles include:

  • “The Impact of Technical Defaults on Dividend Policy” in the Journal of Banking and Finance
  • “On the Timing of Dividend Initiations” in Financial Management
  • “A Few Bad Apples: An Analysis of CEO Performance Pay and Firm Productivity” in the Journal of Economics and Business
  • “Incentivizing Managers to Build Innovative Firms” in the Annals of Finance
  • “Irreversible Investment, Real Options and Competition: Evidence from Real Estate Development” in the Journal of Urban Economics
  • “Regulatory Risk, Market Uncertainties, and Firm Financing Choices: Evidence from U.S. Electricity Market Restructuring” in the Quarterly Review of Economics and Finance

Prior to joining Cornerstone Research, Dr. Bulan had a joint appointment at Brandeis University as an assistant professor of finance in their International Business School and in the economics department.