Closeup of mallet being hit on stacked coins at table in courtroom

Securities class action settlement activity in the U.S. surged to record levels in 2022, according to a new report from Cornerstone Research.

The number of securities class action settlements reached last year rose by 21% and the value of those settlements doubled to US$3.8 billion, the firm reported. The median settlement rose by 46% year over year.

“The historically high number of settlements in 2022 can likely be explained by several factors, including a correspondingly high number of case filings between 2018 and 2020, when over 70% of the 2022 settled cases were filed,” said Laarni Bulan, principal at Cornerstone Research, in a release.

The higher median settlement amount was likely driven in part by record-high “simplified tiered damages,” she said, a rough proxy for potential shareholder losses.

According to the report, the doubling in the overall value of settlements also reflects a handful of so-called “mega” settlements worth at least US$100 million.

There were eight mega settlements in 2022, up from four in 2021, with the value of these deals ranging between US$100 million and US$809.5 million.

Settlements last year involved larger defendants and took longer to resolve than in prior years.

“As we look ahead, the latest trends in securities class action filings suggest we may see a slowing in settlement activity, as well as some shifts in the focus of case allegations, such as towards cryptocurrency-related issues,” said Laura Simmons, senior advisor at Cornerstone.