#United States #New York #Securities Class Action #Cornerstone Research #Settlement Amount

Analyzing the Surge in Securities Class Action Settlements in 2025

In a significant development within the financial and legal sectors, the median settlement amount in securities class actions hit a remarkable $17.3 million in 2025, placing it at the highest level seen in nearly thirty years. This increase comes despite a notable decline in the overall number of settlements, indicating a complex interplay of factors within the securities market.

According to a comprehensive report released by Cornerstone Research titled "Securities Class Action Settlements—2025 Review and Analysis," the heightened median amount can be attributed, in part, to an increase in larger settlements from cases strictly under the Securities Act of 1933. These cases, which focus on alleged misstatements or omissions in registration statements related to securities offerings, constituted only 12% of total settled cases in 2025. However, their median settlement surged over threefold compared to the previous year, achieving an unprecedented level of $32.5 million.

The Context of Market Settlements

The notable growth in the median settlement amount correlates with several key trends in the market. As pointed out by Dr. Laarni T. Bulan, a co-author of the report and vice president at Cornerstone Research, the increased complexity and duration of these '33 Act-only cases were significant factors in driving larger settlements. In 2025, the median number of docket entries—indicative of case complexity—hit a record high, suggesting that such cases require extensive time and resources from litigants.

While the overall number of special purpose acquisition company (SPAC)-related settlements has decreased in recent years, which typically yielded smaller settlement amounts, there was a shift towards higher-value settlements in non-SPAC-related cases. Specifically, the average settlement amount saw a decrease of 7% overall, due significantly to the reduced frequency of mega settlements, defined as those reaching over $100 million.

Shifts in Industry Exposure

The annual report also highlighted a redistribution of settlement amounts across different sectors. In recent years, funds that would typically flow toward Health Care and Financials/Real Estate sectors have increasingly moved toward the Communication Services and Information Technology sectors. This shift may indicate changing trends in the types of securities class action filings being pursued.

Key Findings from the Report

• - A total of seventy-four securities class action settlements occurred in 2025, cumulatively amounting to $3.0 billion, with nine solely based on the 1933 Act and another nine related to SPACs.
• - The time from case filing to settlement hearing remains significantly lengthy; the median duration stood at three and a half years—a historically elevated level consistent with patterns observed in 2023 and 2024.
• - Institutional investors are consistently linked with larger settlements, often serving as lead or co-lead plaintiffs in cases demonstrating substantial potential losses.
• - Notably, the defendant firms involved in these settlements were smaller on average, with their median total assets reaching an eight-year low, reflecting potential trends in market stability.
• - A growing percentage of settlements, 54% in 2025, occurred prior to case certification motions—an increase from 48% in the prior year, indicating a trend toward early resolution in litigation.

Conclusion

As we dissect the findings illuminated in the Cornerstone Research's latest report, it is clear that the landscape of securities class actions is evolving. With the median settlement reaching its peak, stakeholders in both the financial and legal arenas must remain vigilant to navigate the implications of these trends. Adapting to the shifting dynamics within the industry will be crucial as we approach future settlement proceedings and litigation strategies. The evidence suggests that while the volume of settlements may be declining, the stakes involved are becoming increasingly substantial, highlighting the ongoing challenges and opportunities that lie ahead in the world of securities litigation.