Number of Securities Class Action Settlements Rises Slightly as Median Settlement Amount Declines from 2023 13-Year High

Drop in settlement size attributable to lower plaintiff-style damages, among other factors.

NEW YORK, March 26, 2025 /PRNewswire/ -- The number of securities class action settlements increased slightly in 2024 while the size of those settlements declined, according to a new report from Cornerstone Research.

The report, Securities Class Action Settlements—2024 Review and Analysis, found that the number of securities class action settlements in 2024 increased to 88, up 6% compared to the 83 settlements in 2023. The median settlement amount ($14 million) declined from the 13-year high in 2023, but remained at a historically high level compared to the past decade. The total ($3.7 billion) and average ($42.4 million) settlement amounts also declined year-over-year by 8% and 13%, respectively.

"The decline in settlement sizes can largely be attributed to lower 'plaintiff-style damages'—a proxy for the amount of potential investor losses that plaintiffs may claim in a securities class action, which our research finds to be the single most important factor in explaining individual settlement amounts," said Dr. Laarni T. Bulan, a report coauthor and vice president at Cornerstone Research. "What is interesting in 2024 is the high proportion of settled cases related to SPACs. The median settlement for SPAC cases was 21% lower than the median for non-SPAC cases."

According to the report, 19% of settlements in 2024 were related to a special purpose acquisition company (SPAC). The median settlement amount for SPAC cases was $12.0 million compared to $15.3 million for non-SPAC cases.

Issuer defendant firms were 65% smaller than in 2023, as measured by median total assets, reaching the lowest observed level since 2018. Additionally, institutional investors served as lead plaintiff in only 39% of 2024 settled cases, reaching the lowest level over the last 10 years.

"In conjunction with the decline of median issuer defendant total assets, the percentage of 2024 settlements that involved issuers that were delisted from a major exchange and/or had declared bankruptcy was also higher compared to 2023," added Eric Tam, a report coauthor and principal at Cornerstone Research. "Issuer defendant firm assets and issuer distress both have potential implications for the ability to fund a settlement, which is consistent with the smaller settlements in 2024."

Median plaintiff-style damages declined 20% year-over-year to $272 million, following a record high in 2023. Previous reports have presented "simplified tiered damages" as a measure of potential investor losses. This year marks the introduction of "plaintiff-style damages," a measure of potential investor losses that accounts for additional case-specific data while still using a consistent approach across a large volume of cases. The latest investments in big data analytics and capabilities from Cornerstone Research's Data Science Center enabled this new approach.

Additional Key Trends

• There were seven mega settlements ($100 million or greater) in 2024, down from nine in 2023. These settlements accounted for more than half (54%) of the total settlement value.
• In 2024, the median settlement amount for '33 Act–only cases declined by 26% from 2023 to $10.3 million, aligning with the 2015–2023 median.
• The median duration from case filing to settlement hearing (3.2 years) declined 14% from the record peak observed in 2023 (3.7 years), but remains historically elevated.

About Cornerstone Research
Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm works with an extensive network of prominent academics and industry practitioners to identify the best-qualified expert for each assignment. With a reputation for high quality and effectiveness, Cornerstone Research has consistently delivered rigorous, state-of-the-art analysis since 1989. The firm has more than 1,000 professionals in nine offices across the United States, UK, and EU.

SOURCE Cornerstone Research