In 2015, we saw a major spike in the amount investors lost and a spike in the total securities class action settlements in dollars. Last year, investors lost about $183 billion related to all securities class action suits filed.  This is a 25% increase from 2014.  The median settlement value also increased from $6.8 million in 2014 to $7.2 million in 2015.  Since 2009, we have seen a continuous uptick in filed securities class actions but the type of suits filed have consistently changed.  For example, there was a large increase in merger-objection lawsuits in 2015.

The average and aggregate settlement for securities class actions in 2015 took a significant jump compared to prior years.  In 2014, there were a total of 63 settlements, and in 2015, there was a 27% spike resulting in 80 settlements.  On top of the rise in settlements, there were also 8 massive (mega) settlements and an increase in smaller settlements while the medium settlements stayed on par.  The average of settlements tripled, resulting in over $3 billion in 2015 compared to the $1 billion in 2014.  Out of the 8 mega settlements (settlements over $100m), 6 were between $100-$200 million, while one major suit settled for over $970 million.  These mega settlements accounted for 73% of the total settlement dollars. Historically, mega settlements have generally resulted in over 50% of the annual settlement dollars.  29% of the cases settled for less than $2 million, mainly because of the increase in Chinese reverse merger suits.  Historically, 34.5% of all settlements are less than $5 million, but in 2015, 47.5% were less than $5 million.

In some cases, 2015 continued annual trends, but in other places, it did not.  There was almost a 10-year gap since the aggregate settlement size was over $3 billion.  In 2007, there were $8 billion in total settlement dollars, but in 2006, there was just over $20 billion.  Due to the consistently evolving landscape, it has been questioned if massive settlements have started to dissipate.  It is also noted that settlements that take 2 years or less to settle average a median settlement of $6 million.

To learn more about 2015 securities class action settlements click here.

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