The number of accounting-related securities class action lawsuit filings declined in 2025, but the value of accounting-related securities suit settlements increased during the year, according to the latest annual report on the accounting suits from Cornerstone Research. The report, which is entitled “Accounting Class Action Filings and Settlements – 2025 Review and Analysis” can be found here. Cornerstone Research’s March 18, 2026, press release about the report can be found here.

The report defines “accounting case filings” and “accounting cases” as securities class action lawsuits that involve allegations made in the first identified complaint (FIC) of GAAP violations or violations of other reporting standards, auditing violations, or weaknesses in internal controls over financial reporting.

According to the report, there were 34 accounting case filings in 2025, representing 17% of all 2025 securities suit filings, compared to 57 in 2024, representing 26% of all 2024 securities suit filings. The 34 accounting suit filings in 2025 represents a 40% decline compared to the 57 accounting suit filings in 2024, a much larger decline than the 9% decrease in the overall number of securities suit filings in 2025 compared to 2024. The 34 accounting suit filings in 2025 were also approximately 42% below the 2016-2024 average number of accounting case filings of 59. The 2025 accounting case filings in 2025 were at the lowest level both by count and as a proportion of all securities suit filings during the year since Cornerstone Research began tracking the cases in 2004.

The most common accounting related allegation alleged in the 2025 accounting-related cases was allegations of asset valuation and/or impairments, for the second year in a row, compared to prior years in which revenue recognition was the most common allegation. There were seven accounting cases in 2025 involving a restatement, representing a 50% decrease from the 14 restatement cases filed in 2024, and well below the average number of cases involving restatements during the period 2016-2024 (15). The seven restatement cases in 2025 was the lowest number of restatement cases since 2021 (5), and the second-lowest number since tracking began.

Accounting cases tend to be filed more quickly than non-accounting cases, as measured by the number of days between the end of the class period and the initial filing date (described in the report as the “filing lag”). The median filing lag for 2025 accounting cases was 25 days, compared to 38 days for non-accounting cases. The report notes that over the past ten years, accounting cases that were filed more quickly (that is, with a shorter filing lag) were more likely to be dismissed. From 2016 to 2024, the median filing lag for accounting cases that were dismissed was 16 days, compared to 29 days for accounting cases that are ongoing.

Accounting-related cases are less likely than non-accounting cases to be dismissed but more likely to be settled. On average, accounting cases filed during the period 2016 through 2023 have a 13% lower dismissal rate through three years than non-accounting cases. For cases filed during the period 2021 through 2024, 29% of accounting cases settled, compared to 19% of non-accounting cases.

As measured by the decline in market capitalization involved in the case, the value of the accounting cases filed in 2025 was well below recent years. The market capitalization decline is measured by using an annual aggregate of Disclosure Dollar Loss (DDL), which represents the dollar-value change between the trading day immediately preceding the end of the class period and the trading day immediately following the end of the class period. The aggregate DDL for accounting cases in 2025 was $28.1 billion, compared to the $46.8 billion in 2024, and 50% below the 2016-2024 accounting case annual aggregate DDL of $56.2 billion.

According to the report, many of the accounting allegations that ultimately are asserted in accounting cases are not made in the initial complaint. About 44% of accounting case settlements included allegations of GAAP violations that were not made in the first identified complaint.

The number of accounting case settlements in 2025 (35) was level with the number of accounting case settlements in the two prior years. However, the aggregate, average, and median settlements of accounting cases increased in 2025 compared to 2024. The total value of accounting case settlements in 2025 increased to approximately $1.5 billion, up 40% from $1.1 billion in 2024. The 2025 accounting settlements represented 51% of the total value of the all 2025 securities suit settlements. The average accounting case settlement amount increased in 2025 to $43.5 million, an increase of 40% over the 2024 average of $31.0 million, and the median accounting case settlement in 2025 was $17.1 million, representing a 38% in increase over the 2024 median of $12.3 million.

For D&O insurance underwriters, there is a great deal of information in this report. It is worth reading at length and in full. As a general matter, the report tends to confirm standard underwriting assumptions – that is, the cases with accounting allegations are incrementally more dangerous than cases without accounting allegations. The accounting cases are less likely to be dismissed, more likely to settle, and arguably more expensive to settle as well.