2024 was a busy year for shareholders.  Through the filing of lawsuits and submission of settlement claims, shareholders spent the past year holding corporate fiduciaries accountable for their actions.

Securities Class Action Filings  

In 2024, shareholders filed 225 securities class actions, which was an increase over 2023 (215).  The categories that dominated the filings include AI, which more than doubled, from seven in 2023 to 15 in 2024, COVID-19-related filings, which increased from 11 in 2023 to 15 in 2024, and SPAC filings, which accounted for 11 cases, though filings in this category fell by 59% from 2023.  

The sector with the most filings was the Consumer Non-Cyclical sector with 67 filings. Non-cyclical stocks are companies from which people will continue to consume their products even during an economic downturn, such as consumer staple goods, food, gas, utilities, and pharmaceuticals/healthcare. The Technology sector came in with 37 filings and experienced a significant increase in filings from 2023 to 2024 in large part due to an increase in AI-related filings.   

Securities Class Action Settlements  

Global securities class action settlements soared to a value of more than $5.2 billion across 136 settlements worldwide in 2024. Ten cases each surpassed $100 million, exceeding a five-year mega-settlement average by 4%, and total recoveries for antitrust claims rose 28%. Interestingly, in 2024, the average timeline for securities class action settlement was consistent across all jurisdictions, with an average of 45.4 months. For settlements of $100 million or more, the average case took 72 months to settle and included class periods beginning on average, 92 months prior to any settlement. 

According to NERA, class action settlements in the U.S. totaled $3.8 billion in 2024, with the top 10 settlements accounting for approximately 60% of this amount. The same report noted that median investor losses were $1.76 billion, the highest recorded value over the past 10 years. 

The False Claims Act  

The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the U.S. or knowingly fail to pay money owed to the U.S. According to the head of the Justice Department’s Civil Division, settlements and judgments under the False Claims Act exceeded $2.9 billion in the fiscal year ending Sept. 30, 2024. 

The government and whistleblowers were party to 558 settlements and judgments, the second highest total after last year’s record of 566 recoveries, and whistleblowers filed 979 qui tam lawsuits, the highest number in a single year. Settlements and judgments since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $78 billion. 

Of the more than $2.9 billion in False Claims Act settlements and judgments reported by the Justice Department this past fiscal year, over $1.67 billion related to matters that involved the health care industry, including managed care providers, hospitals and other medical facilities, pharmacies, pharmaceutical companies, laboratories, and physicians.  

What's to Come:

2025 is shaping up to be a busy year with 36 new class actions having been filed to date, reflecting that shareholders are as adamant as ever to ensure the companies they invest in are managed honestly and with integrity.

The information provided here is for general purposes and should not be considered as legal, financial, or investment advice.