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2015 class action settlements highest in years

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The 80 securities class action settlements approved in 2015 was the highest number since 2010, says Cornerstone Research, in a report issued Tuesday.

Among other findings, the total value of settlements approved by courts in 2015 dollars was $3.03 billion, which was similar to the annual average of $2.8 billion for the prior five years, but a substantial increase over the unusually low level of $1.07 billion for 2014, according to the report, “Securities Class Action Settlements, 2015 Review and Analysis.”

The survey found also there were eight “mega” settlements greater or equal to $10 million in 2015, compared with just one in 2014, among other findings. The average settlement size also increased to $37.9 million in 2015, a 123% increase compared with 2014’s $17 million.

Commenting on the findings, Joseph A. Grundfest, director of the Stanford Law School Securities Class Action Clearinghouse in Palo Alto, California, said in a statement, “Settlements in class action securities litigation can be viewed as rather predictable phenomena. You can only get a high settlement value for a strong case that alleges substantial damages, and those factors can often be assessed relatively early in the litigation process.

“When the number of mega filings is up, you can expect an increase in mega settlements three or more years down the road, with the larger settlements taking longer to reach, and that’s the process that seems to be at work in the 2015 settlement data.”