Number of Securities Class Action Settlements Reaches 10-Year High


Median settlement value in 2021 down more than 20% to $8.3 million.

Washington—The number of securities class action settlements reached a 10-year high in 2021, but the combined dollar amount of all settlements and the median settlement value fell to their lowest levels since 2017, according to a new Cornerstone Research report released today.

The report, Securities Class Action Settlements—2021 Review and Analysis, found that there were 87 settlements totaling $1.8 billion in 2021, compared to 77 settlements totaling $4.4 billion (adjusted for inflation) the previous year. There were three mega settlements (those valued at $100 million or higher) in 2021, ranging from $130 million to $187.5 million, the latter reflecting the lowest maximum value in the last decade.

We expect this heightened settlement activity to continue for the next few years, given the elevated number of case filings in 2018–2020 and assuming no increases in dismissal rates.

“Undeterred by the challenges of the pandemic, securities class action settlements occurred in larger numbers and were resolved more quickly than observed in prior years. The increase in the number of settlements also reflects the unusually high rate of case filings when many of these settled cases were first initiated,” said Laura E. Simmons, a Cornerstone Research senior advisor and report coauthor. “We expect this heightened settlement activity to continue for the next few years, given the elevated number of case filings in 2018–2020 and assuming no increases in dismissal rates.”

The $8.3 million median settlement value in 2021 was down 22% from the previous year (adjusted for inflation) and showed a 10% decline from the 2012–2020 median. The average settlement amount in 2021 was $20.5 million, down 64% from 2020 and 61% below the 2012–2020 average.

Reflecting the decline in the number of larger settlements, median “simplified tiered damages,” a measure of potential shareholder losses, fell in 2021 to the lowest level since 2017. Median simplified tiered damages were $653 million, down 42% from 2020 and the second lowest in the last decade. Lower “simplified tiered damages” are typically associated with smaller issuer defendants, measured by their total assets and/or market capitalization. While median issuer defendant total assets were more than 45% smaller for cases settled in 2021 compared to those settled in 2020, median market capitalization increased 30% from 2020 to 2021.

“The mix of cases that settled in 2021 had smaller estimates of potential shareholder losses and lacked many of the plus factors that often contribute to higher settlement outcomes, such as related SEC actions, parallel derivative actions, or institutional investors as lead plaintiffs,” said Laarni T. Bulan, a Cornerstone Research principal and report coauthor. “The infrequency of these factors likely contributed to the smaller settlement values overall.”

Securities Class Action Settlements—2021 Review and Analysis


  • Nearly 60% of settlements in 2021 were for less than $10 million.
  • The proportion of settled cases alleging Generally Accepted Accounting Principles (GAAP) violations in Rule 10b-5 cases in 2021 was 32%, an all-time low among all post–Reform Act years.
  • In 2021, 43% of settled cases involved an accompanying derivative action, the lowest rate in the last five years.
  • The rate of settled cases in 2021 involving a corresponding SEC action was the lowest in the past decade.
  • Among cases settled in 2021, institutional investor lead plaintiff appointments were among the lowest in more than 15 years.
  • The median time from filing to settlement hearing date was 2.6 years in 2021, compared to 3.0 years for settlements from 2012 to 2020.


Elisabeth Gaubinger
Cornerstone Research