The following is an excerpt from a recently published ISS Securities Class Action Services white paper. Click here to download and read the full report.
The world was truly turned upside down in 2020 when the novel Coronavirus became the world’s deadliest pandemic in more than a century. The global turmoil over the last year also affected investor opportunities to address allegations of fraud against publicly traded companies.
With different environmental and health factors affecting global economics, United States Federal and State Courts adapted quickly to the new norms and remained adamant in performing its functions. Despite the dramatic decline in newly filed cases of investor complaints in both Federal and State courts throughout 2020, the quantity of traditional class action settlements remained steady, while the settlement amounts increased nominally by 3 percent from $3.17 billion in 2019.
Looking back at the full year of 2020, ISS Securities Class Action Services verified 99 approved monetary class action settlements in the U.S. These cases amounted to $3.26 billion of settlement funds available for distribution to eligible members of the settlement classes. Of the 99 U.S. settlements in 2020, 76 cases received judgment in the Federal Courts amounting to $3.04 billion, while 23 cases received judgment in the State Courts amounting to $229.7 million. Four of the settlements in 2020 delivered significant settlement amounts to be included within this Top 100 publication of largest U.S. settlements of all-time. These four class actions include:
- American Realty Capital Properties, Inc. – $1.025 Billion
- First Solar, Inc. – $350 Million
- Signet Jewelers Ltd. – $240 Million
- SCANA Corporation – $192.5 Million
Looking ahead, it appears likely that 2021 will have continued activity in driving shareholder recoveries. A few 2021 high profile settlements have already occurred, including a $1.21 billion settlement with Valeant Pharmaceuticals International and a SEC disgorgement for $500 million with Wells Fargo & Company. Other prominent actions are making their way through the legal process and scheduled settlement hearings show a handful of actions above the $100 million threshold, including Snap, Inc. at $187.5 Million (combining both the Federal and State settlements). Both Valeant and Snap are large enough settlements to enter next year’s Top 100 report.
By Jeff Lubitz, Executive Director, and Lloyd Flores, Vice President, ISS Securities Class Action Services