Driven by an increase in both the number of settlements and the size of a handful of them, total settlement amounts for securities class action lawsuits increased 46% in 2013 to $4.77 billion, Boston-based Cornerstone Research Inc. said in a report Thursday.
The total number of settlements increased to 67 in 2013 from 57 in 2012, the first year-over-year increase since 2009, according to the report. Six “mega” settlements, defined as those totaling at least $100 million, accounted for 84% of all settlements in 2013.
“The largest settlements in 2013 were associated either with pharmaceutical firms or financial institutions involved with subprime credit crisis allegations,” report co-author Laura Simmons, a senior adviser in Cornerstone's Washington office, said in a statement.
Among other study findings, the settlement size in about 60% of settled cases was $10 million or less, slightly higher than the cumulative 10-year percentage of about 56%. About 32% of the settlements that were less than $10 million in 2013 were for cases involving Chinese reverse mergers.
The study also found that since 2006, more than half of the settlements in any given year have involved institutional investors as lead plaintiffs, with public pensions the most active of these. The median settlement in 2013 for cases with a public pension as lead plaintiff was $23 million, compared with $3 million for cases without one, according to the study.
Copies of the report, “Securities Class Action Settlements, 2013 Review and Analysis,” are available here.
In January, Cornerstone and the Stanford, Calif.-based Stanford Law School Securities Class Action Clearinghouse released a report on the federal securities class action lawsuits filed in 2013.