class actions settlements

class actions settlements

Securities class actions settlements reached a minimum 14 years last year in terms of the number of cases resolved , according to a new report from Cornerstone Research . However, the total dollars paid in those settlements more than double the previous year . In 2012 , the total amount paid to settle the securities class action was 2,201 million , compared with only 1.405 million dollars in 2011.

Settlement amounts paid last year are comparable to those reported from 1996 through 2011 , when viewed in terms of the minimum , average, average and maximum . In 2012 , the minimum payment was $ 0.5 million , $ 10.2 million median , average and maximum $ 822,600,000 $ 54,700,000 . Over the previous fifteen years since 1996 , the average for each is : A minimum of $ 0.1 million , an average of $ 8.3 million , an average of $ 55,200,000 and a maximum of 8325.1 million.

Settlement values ​​for the previous year were significantly affected by mega settlements , defined as more than $ 100 million . These settlements accounted for nearly 75 % of the total dollar settlement in 2012. That compares with 41 % in 2011 , 60% in 2010, 75 % in 2009 and 52 % in 2009. Indeed , more than half of class actions settlements of securities from passing the Reform Act was less than 10 million dollars. Which contrasts with 2012 where more than half the villages were under $ 10 million . This may suggest a change in size typical case, according to the Cornerstone . These higher settlement values ​​may also reflect the fact that less than 60 % of the settlements were funded entirely by D & O insurance , compared to almost 80 % in the previous year .

An analysis of the time the settlement suggests that in 2012 , the number of years between the filing of the complaint and low resolution . In 2012 , 22.6 % of cases resolved within two years , compared to 13.4 % between 2007 and 2011. While these percentages reversed within 2-3 years , with 17 % in 2012 and 30.6% for the previous four years , the number moves back again in the time frame of 3-4 years 26.3% in 2012 compared to 19.3% for 2011 compared to 2007 .

Number of cases settled , involving appropriate action by the SEC increased last year compared to 2011 . In 2012 there were 11 securities class actions settled with the SEC implementing parallel action , compared with only five in the previous year . Last year's number is, however , well below those of previous years . For example , in 2010 settled 21 securities class actions had a parallel SEC action while in 2009 and 2008 were 22 in each year, and 31 in 2007 market crisis began manifest. In part this can be explained by the mixture of charges in cases . In 2012 , about 60 % of the shares determined by class of securities settlement cases involving alleged violations of GAAP while the number of actions brought by the SEC accounting fraud in recent years has decreased significantly.

Two other points about places from last year are noted. First, because the passage of Reform Act institutional investors have played an increasingly important role . Since 2006, institutional investors served as lead plaintiff in more than half of the cases . This trend continued last year with public pension funds serving as the principal applicant in approximately 49 % of cases resolved . Typically, settlement amounts are larger when an institutional investor serves as lead plaintiff .

Finally , last year, more than 50 % of securities class actions set were accompanied by a derivative suit . This represents a significant increase from the average post- Reform Act of around 30% per year. Settlements in class actions accompanied by derivative suits tend to be significantly higher , depending on the Cornerstone , even when settlements are not at the same time .