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E-MailJeff Lubitz is Executive Director at ISS Securities Class Action Services LLC. This post is based on his ISS memorandum.
In the midst of a global pandemic, securities class action cases continue to provide investors with critical recoveries from companies accused of various fraudulent activities. In fact, the dollar amount of settlements in 2020 totaled $5.84 billion… an increase of 61% over the $3.62 billion in settlements during 2019.
The number of worldwide settlements in 2020 where a monetary amount was agreed to totaled 133… an increase of 13% above the 118 settlements finalized during 2019.
The primary difference between 2019 and 2020 were with the mega settlements… typically considered cases settling for $100 million or greater. While the quantity of these cases were similar during the last two calendar years, the largest settlements in 2020 were incredibly higher in dollar amounts. The two largest settlements in 2019 were Cobalt International Energy at $389.6 million and Alibaba Group Holding at $250 million… while the top 2020 settlements were the following:
- Valeant Pharmaceuticals – $1,210,000,000
- American Realty Capital –$1,025,000,000
- First Solar – $350,000,000
- Signet Jewelers – $240,000,000
- SCANA Corporation – $192,500,000
Interestingly, 2020 was the first year since 2016 with two settlements worth more than one billion dollars (in 2016, Household International settled at $1.575 billion and Merck settled at $1.062 billion).
Of the 117 U.S.-based settlements in 2020, six were S&P 500 listed companies. This includes the $149 million Equifax settlement, which ended litigation related to the high-profile data breach.
Not surprisingly, the Federal court with the most 2020 activity was the USDC New York (Southern) with 29 settlements. The next highest quantity at seven (7) cases included both the USDC New York (Eastern) and USDC New Jersey. At the State level, the most frequent venue was the Delaware Chancery Court with nine (9) settlements. The next highest quantity at two (2) cases involved both the Nevada District Court, Clark County and New York Supreme Court, New York County.
Outside of the U.S., there were a total of 16 settlements in 2020… ten in Canada and six in Australia (no other country experienced a shareholder securities settlement during 2020). The largest Canadian settlement was with Valeant Pharmaceuticals at CAD $94 million; while the largest Australian settlement was with Spotless Group Holdings at AUD $95 million.
Here are a handful of key statistics from 2020:
| Venue | Number of Settlements | Dollar Amount of Settlements* |
|---|---|---|
| U.S. Federal | 91 | $5.2 Billion |
| U.S. State | 23 | $229.7 Million |
| U.S. SEC Disgorgements | 3 | $93.9 Million |
| Int’l – Canada | 10 | $117.2 Million |
| Int’l – Australia | 6 | $173.2 Million |
| Int’l – Other | 0 | $0 |
