Recent Trends in Securities Class Action Litigation: 2021 Full-Year Review

25 January 2022
Janeen McIntosh and Svetlana Starykh

NERA has published “Recent Trends in Securities Class Action Litigation: 2021 Full-Year Review,” revealing a sizable decrease in filings, resolutions, and median settlement values.

The 2021 edition of the 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, the number of settled and dismissed cases, settlement values, and attorney fees and expenses.

Highlights from the 2021 report include:

In 2021, aggregate settlements amounted to $1.8 billion. This is $400 million lower than the $2.2 billion aggregate settlement amount in 2019, and considerably lower than the $3.1 billion and $5.2 billion in 2020 and 2018, respectively.
For the first time since 2016, fewer than 300 new federal securities class action suits were filed—declining from 321 in 2020 to 205 in 2021. This decline in the aggregate number of new cases filed was driven by the notable decrease in the number of merger-objection suits in 2021.
Over 10% of new federal filings were related to special purpose acquisition companies (SPACs).
Of the new cases filed, over 30% were filed against defendants in the electronic technology and services sector and 40% were filed in the Second Circuit.
There were 20 securities class action cases filed with a COVID-19-related claim alleged in the complaint, a decrease from the 33 suits filed in 2020.
The aggregate plaintiffs’ attorneys’ fees and expenses associated with settled cases was $451 million for 2021.

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