The number of securities class action lawsuit filings involving accounting allegations increased slightly in 2024 compared to 2023, but the 2024 accounting-related filings remained below the long-term annual average number of such filings, according to the latest annual report from Cornerstone Research. The number of accounting-related settlements in 2024 remained steady compared to 2023, while the median, average, and total settlement values all decreased compared both to 2023 and long-term values.

The Cornerstone Research Report, which is entitled “Accounting Class Action Filings and Settlements: 2024 Review and Analysis,” can be found here. Cornerstone Research’s April 16, 2025, press release about the report can be found here.

According to the report, there were 57 securities class action lawsuit filings in 2024 that containing allegations related to GAAP violations or violations of other reporting standards, auditing violations, or weaknesses in internal controls over financial reporting, compared to 56 accounting-related filings in 2023, representing the third year in a row in the increase in the number of accounting-related suits. The accounting-related securities suit filings represented 26% of the 217 total securities class action lawsuit filings in 2024.

While the 57 accounting-related filings in 2024 represented a slight increase in the number of such filings compared to 2023, the 2024 accounting-related filings remained below the 2008-2023 average annual number of accounting case filings of 62. The 2024 accounting case filings as a percentage of all annual securities suit filings was at the lowest level since 2021, and the second lowest level in the last 10 years.

Accounting-related securities suits tend to be filed more quickly than non-accounting cases, a pattern that held again in 2024. The median number of days between the end of the class period and the lawsuit filings date (“the lag time”) for the filing of accounting cases during 2024 was 37 days, compared to 51 days for non-accounting cases. While the median 2024 filing lag time of 37 days for accounting cases was lower than the 2023 median filing lag time for accounting cases of 43, the 2024 lag time of 37 days was the second-longest in a decade, and also was approximately double the 2015-2023 median lag time for accounting cases (18 days).

The median pre-disclosure market capitalization of issuer defendants in accounting-related securities suit filings in 2024 was $445.6% million, well below the inflation-adjusted 2023 median pre-disclosure market capitalization of $740.5 million, representing a decrease of 40%. The 2024 median pre-disclosure market capitalization in accounting cases was the lowest in the last ten years.

According to the report, the disclosure dollar loss (DDL) for accounting-related case filings also decreased in 2024. DDL is the dollar value change in the defendant firm’s market capitalization between the trading day immediately preceding the end of the class period and the trading day immediately following the end of the class period. At $45.6 billion, the DDL index for 2024 accounting cases was well below the inflation-adjusted 2023 DDL index for accounting cases of $79.1 million, as well as below the 2015-2023 accounting case average annual DDL index of $54.8 billion. The 2024 DDL index for accounting cases as a share of the total DDL index was at the second lowest in the last ten years.

Cases involving revenue recognition related allegations represented 23% of all accounting-related securities suit filings in 2024, compared to 27% in 2023, and the lowest level in the last five years. 33% of 2024 accounting-related securities suit filings involved asset valuations and/or impairments allegations; 2024 was the first year since Cornerstone Research began tracking that allegations related to asset valuations and/or impairments surpassed revenue recognition as the most common accounting-related allegation.

The report notes a couple of interesting items about accounting-related securities suit filings. First, accounting cases filed in 2024 were over 2.5 times more likely to refer to a short-seller report than non-accounting cases, “the largest disparity between accounting and non-accounting cases since tracking began.” Second, since 2015, 32 companies had a least two separate complaints involving different sets of accounting-related allegations filed against them, suggesting that some companies allegedly are repeat offenders when it comes to alleged accounting violations.

In 2024, four plaintiff law firms — The Rosen Law Firm, Pomerantz, Glancy Prongay & Murray, and Levi & Korsinsky, filed 74% of all of the 2024 accounting-related securities suits. These same four firms also represented plaintiffs in just over half (51%) of accounting case settlements in 2024.

The report contains a great deal of information about dismissal rates at the one-year and three-year marks, much of this information relating to cases filed in recent years, many of which have not yet finally been resolved. I found it more interesting to look at the data relating to the years 2015 to 2020 – that is, years that likely have mostly or fully resolved.

These data show that for accounting cases filed during that period, between 48% and 55% of all cases filed during each year being dismissed, with the dismissal rate generally trending upward during that period (from 48% in 2015 to 55% in 2020). For the period 2015 through 2023 (a period for which 16% of cases filed remain ongoing), 44% of the accounting cases were dismissed, 39% dismissed, and 1% were remanded. The report also notes that accounting cases filed from 2015 through 2023 were 26% more likely to settle than non-accounting cases.

There were 35 accounting-related securities suit settlements in 2024, representing a total settlement value of nearly $1.1 billion, representing a declined from the total 2023 accounting case settlement value of $1.645 billion and well below the 2008-2023 annual average total accounting case settlement value of $2.845 billion.

The median 2024 accounting case settlement was $12.0 million, below the inflation-adjusted median 2023 accounting case settlement of $15.4 but more or less consistent with the annual inflation adjusted accounting case settlement for the period 2008-2023 of $12.2 million.

The 2024 average accounting case settlement of $30.1 million was below the inflation-adjusted average 2023 accounting case settlement of $47.0 million, as well as below the inflation-adjusted 2008-2023 annual average accounting case settlement of $63.2 million.

The average time to settlement for accounting cases in 2024 (3.4 years) was close to the historical average of 3.5 years. The length of time between filing and settlement for the cases settled in 2024 correlated with the settlement size, consistent with prior year patters. Small settlements (that is, settlements below $10 million) and mid-range settlements (settlements between $10 million and $50 million) took place on average between 2.9 years and 3.4 years of filing, which the 2024 accounting-related settlements of greater than $50 million took an average of 6.2 years to settle.