This report analyzes settlement outcomes for 164 parallel derivative actions associated with securities class actions that settled between 2019 and the first half of 2026.
Coauthored by Laarni Bulan. Matthew Davis, and Prithvi Hingorani, this study analyzes the settlement characteristics of parallel derivative lawsuits in which a shareholder derivative action—brought by a corporation’s current shareholder(s) on behalf of the corporation—features the same or similar underlying allegations as a securities class action.
As shown in Securities Class Action Settlements—2026 Midyear Assessment, approximately half of securities class actions were associated with a parallel derivative claim. This report analyzes settlement outcomes for 164 parallel derivative actions associated with securities class actions that settled between 2019 and the first half of 2026. Often, the defendants in these derivative actions include executives and/or members of the corporation’s board of directors.
Many parallel derivative actions are “follow-on” suits, that is, derivative lawsuits filed after the initial securities class action and based on similar underlying allegations.
This report focuses on derivative actions associated with a separate securities class action, that is, a lawsuit brought by purchasers of a corporation’s common stock alleging Rule 10b-5, Section 11, and/or Section 12(a)(2) claims and seeking damages for investors who purchased stock after allegedly false or misleading statements.
Many parallel derivative actions are “follow-on” suits, that is, derivative lawsuits filed after the initial securities class action and based on similar underlying allegations. Among such follow-on suits, it is not uncommon for derivative plaintiffs to allege injury to the corporation as a result of the alleged false or misleading statements made by the defendants, and/or to claim that the board of directors breached its fiduciary duty in failing to properly oversee the corporate actions or circumstances that led to the alleged misconduct.
As the corporation is alleged to have been harmed, monetary settlements paid in the derivative suit are paid to the corporation, benefiting the plaintiff shareholder(s) indirectly.
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