NERA Economic Consulting and Cornerstone Research have released their respective 2023 annual reports on federal securities class action filings. As usual, the different methodologies employed by the two organizations have led to slightly different numbers, although they both identify the same general trends.
The findings for 2023 include:
(1) The reports agree that there was a slight increase in overall filings. NERA finds that there were 228 filings (compared with 206 filings in 2022), while Cornerstone finds that there were 215 filings (compared with 208 filings in 2022). Although the overall numbers remain steady, both NERA and Cornerstone note that filings involving only Section 10(b)/Rule 10b-5 claims for securities fraud are an increasing percentage of the overall filings. For example, NERA found that 184 of the 228 filings fit this description, an increase of 34% from 2022.
(2) The number of M&A filings, filings alleging Section 11 claims for misstatements in registration statements, and state 1933 Act filings continues to drop. NERA found that there were only seven merger-objection suits in 2023, a ten-year low. Cornerstone found that the number of federal Section 11 and state 1933 Act filings decreased from 50 filings in 2022 to 19 filings in 2023 (a 62% decline).
(3) According to Cornerstone, the Ninth Circuit was the busiest circuit for core filings in 2023 with 67 new filings (32% of the national total). Core filings exclude M&A filings.
(4) NERA found that when excluding settlements of $1 billion or higher, the average settlement value was $34 million in 2023, a decrease of 12% from the $39 million inflation-adjusted amount in 2022. There was an aggregate settlement value of $3.9 billion and plaintiffs’ attorneys’ fees and expenses comprised 24.9% of that number.
The NERA report can be found here. The Cornerstone report can be found here.
You must be logged in to post a comment.