Recent Trends in Securities Class Action Litigation: 2020 Full-Year Review

25 January 2021
Janeen McIntosh and Svetlana Starykh

NERA has published “Recent Trends in Securities Class Action Litigation: 2020 Full-Year Review,” revealing the emergence of COVID-19-related filings, an overall decline in filings, and sustained high settlement values. The 2020 edition of their annual report utilizes NERA’s proprietary database of securities class actions, which spans more than three decades. Senior Consultants Janeen McIntosh and Svetlana Starykh, the report’s authors, consider litigation trends related to the number of filings, the economic sectors involved, settlement and dismissal rates, settlement values, and attorney fees and expenses.

Highlights from this year’s report include:

Since the first COVID-19-related lawsuit in March 2020, 32 additional filings have included COVID-19-related claims in their complaints. Nearly a quarter (24%) of these filings were against defendants in the health and technology services sector, and 21% were against defendants in the finance sector.
There were 326 federal securities class actions filed in 2020. This marks a 22% decline from 2019 filings.
For the first time in five years, complaints including an allegation related to misled future performance outnumbered claims related to accounting issues, regulatory issues, or missed earnings guidance.
In 2020, 320 cases were resolved, marking a slight increase from the total number of cases resolved in 2019, but remaining below the number of cases resolved in 2017 and 2018.
The average settlement value in 2020 was $44 million, more than a 50% increase over the 2019 average of $28 million but still below the 2018 value.

NERA has reported on trends in securities class actions for over 25 years and is an industry leader in advising clients in the economics of securities, finance, and commerce.