One of the characteristics of “opt-out” class actions in the U.S. is that class members retain the option of opting out of the class settlements. A new study shows that in recent years, opt-outs are becoming an increasingly common phenomenon in securities class action settlements, particularly in connection with securities cases having certain traits. The Cornerstone Research study, entitled “Opt-Outs in Securities Class Action Settlements: 2019-H1 2022” can be found here. Cornerstone Research’s October 25, 2023, press release about the report can be found here.Continue Reading Cornerstone Research: Securities Suit Opt-Outs Increasingly Frequent in Large, Complex Cases

Supreme court1The U.S. Supreme Court has agreed to take up a case arising out of the credit crisis-era collapse of the Lehman Brothers investment bank, in order to decide whether or not, under principles known as the “American Pipe doctrine,” the filing of a securities class action lawsuit tolls the Securities Act’s statute of repose. In its 1974 American Pipe decision, the Court held that the filing of a class action suit tolls the applicable statute of limitations; in this latest case, the Court must resolve a split between the federal circuit courts and decide whether a class action lawsuit filing also tolls the applicable statute of repose. Though the case involves seemingly arcane issue, it could have very important practical implications, particularly with respect with respect to the timing of class members’ decisions whether or not to opt-out of the class. The U.S. Supreme Court’s January 13, 2017 order granting the petition of the plaintiff for a writ of certiorari in California Public Employees’ Retirement System v. ANZ Securitites Inc. can be found here.
Continue Reading Supreme Court Agrees to Hear Securities Act Statute of Repose Tolling Question

scales of justiceAmong the important parts of any securities class action lawsuit settlement agreement are the so-called “blow provisions,” which provide settling defendants with an option to terminate the settlement agreement if a specified threshold of investors elect to opt out of the settlement. Among other key consideration with respect to blow provisions is that the threshold specified must be carefully structured to allow defendants to terminate or renegotiate the class settlement when opt-outs reach an unacceptable level. In a December 8, 2016 research paper entitled “Considerations for Blow Provisions in Securities Class Action Settlements” (here), Cornerstone Research takes a look at the various ways that blow provisions can be structured, and identifies the pitfalls with the various alternatives.
Continue Reading Setting the “Blow Provisions” in Securities Class Action Settlement Agreements

cornerstoneOne of the more interesting story lines in the world of securities class action litigation over the past several years has been the rise of class settlement opt outs, whereby various claimants representing significant shareholder ownership interests select out of the class suit and separately pursue their own claims – and settlements. The class action opt-out litigation emerged as a significant phenomenon in the litigation arising out of the era of corporate scandals a decade ago. In an October 6, 2016 report entitled “Opt-Out Cases in Securities Class Action Settlements” (here), Cornerstone Research and Latham & Watkins LLP take a look what the statistics show about securities class action opt-outs. This recent report updates the findings in their 2013 study, based on updated data reflecting case settlements during the period 2012 to 2014. Cornerstone Research’s October 6, 2016 press release regarding the report can be found here.
Continue Reading Securities Class Action Settlement Opt-Outs: Statistics and Trends

On November 19, 2013, Cornerstone Research, in conjunction with the Latham & Watkins law firm, released a report analyzing securities suit opt-out cases. The report, entitled “Opt-Out Cases in Securities Class Action Settlements,” and which can be found here, takes a comprehensive look at cases in which individual class members have opted out of

Settlement opt-outs have been always been a feature of securities class action litigation. However, as part of the settlements of the huge cases filed during the era of corporate scandals at the beginning of the last decade, opt outs became more prevalent and they represented an increasingly significant part of the case resolution. Many of

NYSE Commission on Corporate Governance: On September 23, 2010, the NYSE Commission on Corporate Governance issued a report (here) following a two year review of governance issues and considerations. The Commission, chaired by Larry Sonsini of the Wilson Sonsini law firm, included more than two dozen members representing a broad range of constituencies

Over the years, legislative reforms of the U.S. securities laws have cycled back and forth, between initiatives, on the one hand, to discourage abusive litigation and, on the other hand, to restrain corporate misconduct. In the current Wall Street bailout, post-Madoff environment, sentiment may be running high for legislative reforms that could expand liabilities under