Cornerstone Research Report Shows Securities Class Action Filings with Accounting Allegations Rise for Third Straight Year

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Accounting case settlement dollars nearly triple from previous year

A new report from Cornerstone Research reveals that 2015 was the third consecutive year that the number of accounting-related filings increased. There were 71 securities class action filings with accounting allegations in 2015, according to Accounting Class Action Filings and Settlements—2015 Review and Analysis.

“Not only did the number of accounting case filings increase in 2015, the market capitalization losses associated with those filings jumped as well,” said Elaine Harwood, a vice president of Cornerstone Research and head of the firm’s accounting practice. “The increase is attributable, in part, to accounting cases filed against NYSE-listed firms. The market capitalization losses associated with those filings more than doubled in 2015.”

Accounting case settlement dollars reached $2.6 billion in 2015. “The total settlement value for cases with accounting allegations in 2015 was almost three times the level for 2014,” said Laura Simmons, a Cornerstone Research senior advisor. “Looking at overall settlement dollars for 2015, accounting cases represented 87 percent of the total value.”


  • The Disclosure Dollar Loss (DDL) Index™ for accounting cases filed in 2015 rose to $34.8 billion, the second largest amount in the last seven years.
  • In 2015, 37 percent of accounting cases were filed in the Ninth Circuit—more than any other circuit.
  • The number of accounting cases against companies with headquarters outside the United States increased 43 percent to its second highest level in the last 10 years. Accounting cases against companies headquartered in China increased 75 percent from 2014 to 2015.
  • Accounting case filings involving company announcements of internal control weaknesses were the highest in 10 years. The DDL Index for filings with allegations related to accounting restatements was smaller than for other types of accounting case filings in 2015.
  • Accounting cases in 2015 had a median filing lag of eight days between the end of the alleged class period and the filing date of the lawsuit, the shortest in 10 years.
  • In 2015, 86 percent of accounting case settlements involved allegations of internal control weaknesses—the highest proportion in the last 10 years.
  • For settled cases with GAAP allegations, settlement amounts were highest for matters involving write-downs.
  • Following a sharp decrease in 2014, the proportion of accounting settlement dollars represented by financial firms led all sectors in 2015. This increase reflects 11 settlements averaging over $133 million.

About Accounting Cases
Cases are considered “accounting cases” if they involve allegations related to Generally Accepted Accounting Principles (GAAP) violations, auditing violations, or weaknesses in internal control over financial reporting.

About Cornerstone Research
Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex litigation and regulatory proceedings. The firm works with an extensive network of prominent faculty and industry practitioners to identify the best-qualified expert for each assignment. Cornerstone Research has earned a reputation for consistent high quality and effectiveness by delivering rigorous, state-of-the-art analysis for over 25 years. The firm has 600 staff and offices in Boston, Chicago, London, Los Angeles, New York, San Francisco, Silicon Valley, and Washington.
Twitter: @Cornerstone_Res

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