Securities Class Action Settlements

On January 6, 2020, solar panel company First Solar announced that it had settled the securities class action lawsuit  pending against the company and certain of its executive officers for a payment of $350 million. During the long course of this matter, the case made its way to the Ninth Circuit a couple of times; the case even involved an unsuccessful petition to the U.S. Supreme Court for a writ of certiorari. In addition to its sheer size, there are a number of other interesting aspects to this settlement, as discussed below. The settlement is subject to court approval. The company’s January 6, 2020 press release can be found here.
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Opt-outs “remain a small yet significant part of the overall securities class action landscape,” according to a recently updated Cornerstone Research report written in conjunction with the Latham & Watkins law firm. The report, entitled “Opt-Out Cases in Securities Class Action Settlements” (here) notes that the opt-out rate has more than doubled in the most-recent four year period and that opt-outs remain more likely in larger dollar settlements. Cornerstone Research’s September 25, 2019 press release about the report can be found here.
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Aggregate, average, and median securities class action lawsuit settlement amounts all rose in 2018, according to the latest report from Cornerstone Research. The 2018 total settlement amount of just over $5 billion dollars is substantially higher than the prior year total and in fact is the third-highest total in the past 10 years. The $5 billion total was driven by a small number of very large settlements. The Cornerstone Research report, which is entitled “Securities Class Action Settlements: 2018 Review and Analysis” can be found here. Cornerstone Research’s March 26, 2019 press release regarding the report can be found here.
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As I have previously noted (for example here), a number of reports have analyzed the 2017 approved securities class action lawsuit settlements in statistical and numeric terms, such as the aggregate, average, and mean settlement amounts. But what do the 2017 securities suit settlements look like when broken down according to the lead plaintiffs’ firm that negotiated the settlement? An April 4, 2018 study from ISS Securities Class Action Services entitled “The Top 50 of 2017” (here) takes a look at this issue and reports some interesting conclusions, discussed below. The organization’s April 4, 2018 press release can be found here.
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In the third-largest securities class action settlement ever in Australia, QBE Insurance has agreed to settle the securities suit pending in the Federal Court of Australia and filed against the company on behalf of QBE investors related to the sharp share price decline the company experienced in December 2013. The amount of the settlement is A$ 132.5 million (US$ 103.5).The company admitted no liability in connection with the settlement. The settlement is subject to Court approval. A copy of QBE’s December 28, 2017 market statement regarding the settlement can be found here.
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In one of the largest U.S. securities class action lawsuit settlements ever, the Brazilian-based energy company Petrobras has agreed to settle the bribery and corruption-related securities class action lawsuit pending against the company in the Southern District of New York for $2.95 billion. The settlement, which is subject to court approval, resolves only the claims of Petrobras investors who purchased the company’s securities in the U.S.; it does not resolve the claims of investors who purchased Petrobras securities in Brazil.  The settlement resolves the case just before the U.S. Supreme Court was to consider whether to take up a cert petition in which the defendants sought to have the high court address class certification issues in the case. The company’s January 3, 2017 press release describing the settlement can be found here. The plaintiffs’ lawyers’ January 3, 2017 press release about the settlement can be found here.
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gavel2Thirteen of the 100 all-time largest securities class action lawsuit settlements were finalized in 2016, the highest number of settlements during any one year period, according to a recent report from Institutional Shareholder Services (ISS). Two of the 2016 settlements among the top 100 were among the eleven largest of all times. The report, which also ranks the plaintiffs’ law firms by the number of top 100 settlements in which they were involve, entitled “The Top 100 U.S. Settlements of All Time,” can be found here.
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halliburtonAccording to the company’s December 23, 2016 press release (here), Halliburton has reached an agreement to settle the long-running securities class action pending against the company and certain of its directors and officers for $100 million. During its 14-year existence, the storied case had made two trips to the U.S. Supreme Court and three trips to the Fifth Circuit. The settlement is subject to court approval. Nate Raymond’s December 23, 2016 Reuters article about the settlement can be found here.
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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.
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pwc3On April 10, 2015, PwC released the latest in what is now a series of annual securities class action litigation reports. PwC’s report is generally consistent with the reports previously published by Cornerstone Research and NERA. What makes the PwC report noteworthy is its commentary on the trends the report’s authors believe could contribute to