Large Settlements Get Larger, Small Settlements Get Smaller

SettlementTrendNational Economic Research Associates (NERA) has been researching case filings and settlements in US securities class actions  for more than 20 years. As a result, NERA often lends interesting perspective to industry trends.

At first glance, NERA’s Recent Trends in Securities Class Action Litigation: 2013 Full-Year Review appears to indicate only marginal variations from 2012*, with settlement activity proceeding at a “very slow pace after the 2012 record low”:

•    A 10% increase in the number of federal securities class actions filed (234 vs. 213)
•    Filings in the 9th Circuit (including CA) back to historical level, after the 2012 trough
•    Filings in the 5th Circuit alleging violation of Rule 10b-5 roughly doubled

In addition, legal developments in federal securities class action headlined the news in 2013 because of the possible impacts on securities litigation.

The story gets more compelling, though, when the discussion turns to settlement amounts.

According to the NERA study, nine settlements exceeded the $100 million mark, which contributed to record-high average class action settlement  amounts. The “average settlement amount in 2013 broke prior records, reaching $55 million, an increase of 53% over 2012 and 31% over the previous high in 2009.”**

The 2013 median settlement, in contrast, dropped substantially compared to 2012. To sum it up, the study notes that “2013 was a year in which large settlements got larger and small settlements got smaller.”

These are just the highlights of the extensive findings contained in the NERA study. For the full, in-depth discussion and analysis on the top securities class action filing trends from 2013, download the report now.

*    Source: Recent Trends in Securities Class Action Litigation: 2013 Year in Review, National Economic Research Associates (NERA). Co-authored by NERA Senior Consultants Dr. Renzo Comolli and Svetlana Starykh. 21 January 2014.

**     The report’s calculation excludes settlements above $1 billion, settlements in IPO laddering cases, and settlements in merger objection cases to preserve the visibility of trends “in the more usual cases.”