According to the latest annual report from ISS Securities Class Action Services, there were two securities class action settlements in 2022 that were large enough to make the firm’s list of the Top 100 U.S. Securities Class Action settlements. These two settlements took place in a year in which there were a total of 141 approved monetary securities class action settlements totaling $4.77 billion. The details of the settlements included the two largest during 2022 can be found in the ISS Securities Class Action Services report entitled “The Top 100 U.S. Class Action Settlements of All-Time,” here.
As noted, there were 141 U.S. securities class action settlements in 2022, representing an increase of 35.7 percent over the $3.51 billion in settlements in 2021. The aggregate dollar value of settlements in 2022 was the highest annual dollar value of settlements since 2018.
Of the 141 settlements in 2022, 110 cases representing $4.093 billion in settlements were approved in federal court, and 31 settlements representing $675.25 million were approved in state court. (Note: Of the 31 state settlements, 23 were related to corporate transactions, including cases involving breach of fiduciary duty allegations, while only 8 alleged Section 11 claims.) The average federal court securities suit settlement in 2022 was $37.2 million and the average state court settlement was $21.8 million.
Just as the aggregate dollar value of settlements increased in 2022 relative to 2021, the number of settlements increased as well. The 141 total federal and state court settlements represented an increase of 21.5 percent over the 116 total federal and state court settlements in 2021. The number of settlements in 2022 was the highest annual total since 2017.
The average time to settlement for the 2022 securities class action settlements, measured from the time of filing of the initial complaint to the final approval of settlement by the presiding judge, was 3.6 years. However, the time to settlement among the various cases varied widely. Thus the time to settlement in the Akcea Therapeutics case (which settled for $12.5 million) took just over 14 months. By contrast, the NovaStar Mortgage Trust case, a leftover vestige of the global financial crisis, took over 14 years to settle for $165 million.
Of the 141 settlements in 2022, two were large enough to be included in ISS SCAS list of the 100 largest all-time settlements. The Twitter case, which settled for $809.5 million, became the 19th largest settlement, and the Teva case, which settled for $420 million, became the 43rd largest of all-time and the largest U.S. settlement ever involving an Israeli company. These two settlements, totaling over $1.22 billion in settlement amounts, represented 25 percent of the total value of all U.S. securities class action settlements in 2022.
Readers may be interested to know how large a settlement has to be to make the Top 100 list. The settlement listed in the hundred spot on the list is 2006 settlement of $185 million in the Bristol-Myers Squibb Co. case. As astonishing an observation as this is, a settlement that does not exceed $185 million will not even make the Top 100 list. Indeed, a settlement over $1 billion will not even make the Top Ten on the list list unless it exceeds $1.1 billion. (The 2013 AIG settlement of $1.009 billion comes in at number 16.) A settlement would have to exceed $500 billion to even make the top 30.
Of the 100 cases on the Top 100 list, 91 had an institutional lead plaintiff and only nine had a non-institutional lead plaintiff. 100 of the Top 100 settlements were federal court cases, three were state court cases. The Southern District of New York, with 39 of the settlements, is the U.S. district court with the highest number of settlements on the Top 100 list.
Among the plaintiffs’ law firms, the plaintiffs’ firm with the most cases on the list in which the case was lead counsel or co-lead counsel was the Bernstein Litowitz firm, which has 36 cases on the list. The plaintiffs’ firm with the second-highest number of cases on the list is the Robbins Geller law firm, which has 21 cases on the list – including the largest case of all time (the Enron case, which had total settlements of $7.242 billion).
In an interesting sidenote, the ISS SCAS report notes that among the 141 securities class action settlements was one settlement in COVID-19-related cases: the $3.3 million settlement in the SCWorx case. In addition there are two settlements in COVID-related cases on track for approval in 2023, including the $12 million settlement in the Vaxart case and the $44 million settlement in the Inovio Pharmaceuticals case. In addition, a tentative settlement of $8.1 million has been reached in the Chembio Diagostics case.
In terms of possible Top 100 settlements that may receive final approval in 2023, the $1 billion settlement in the Dell Technologies case has been announced and is awaiting approval. If the Dell case is approved, it will become the 17th largest all-time settlement and the largest ever in a state court case. In addition, and though not large enough to make the Top 100 list, the $141 million settlement in the McKesson Corporation case and the $95 million settlement in the Group Televisa.
For those who are interested, the ISS SCAS Top 100 report also includes a list of the Top 50 SEC Disgorgements. The largest disgorgement on the list is the $800 million in the 2008 AIG action. In order to make the Top 50 list, a future SEC disgorgement order would have to exceed $55 million.
Special thanks to Jeff Lubitz of ISS SCAS for providing with a copy of the Top 100 report. Jeff is the report’s author.