The number of accounting-related securities class action filings plummeted 40% last year, going from 57 in 2024 to an all-time low of 34 in 2025, according to a new report. But the total settlement value rose 40% to $1.5 billion, with accounting cases representing 51% of total securities class action settlement dollars.
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"In 2025, asset valuation and/or impairment issues were the most common GAAP violation alleged in accounting-related securities class action filings and settlements," said Frank Mascari, a report coauthor and vice president at Cornerstone Research, in a statement Wednesday. "These allegations are often being added as litigation progresses rather than being established in the initial complaint."
In 2025, the number of accounting-related securities class action filings fell to its lowest level since tracking by Cornerstone began in 2004, but the accounting cases tended to be filed against larger issuer defendants compared to previous years. The value of accounting-related securities class action settlements hit a five-year high, exceeding 50% of all settlements, even though there was no increase in the number of such settlements in 2025 compared to 2024. The median pre-disclosure market capitalization of issuer defendants surpassed $1 billion for the first time since 2022.
Filings related to artificial intelligence, cryptocurrency and special purpose acquisition companies made up 24% of all accounting case filings, up from 14% in 2024.
The DDL Index (the dollar-value change in the defendant firm's market capitalization) of accounting cases fell 40% to $28.1 billion and was 50% lower than the 2016–2024 historical annual average of $56.2 billion.
"In 2025, we saw a shift toward fewer cases but against larger issuer defendants," said Sally Bai, a report coauthor and principal at Cornerstone Research, in a statement. "This was driven, in part, by accounting case filings involving AI issues where the median firm size was roughly four times larger than the rest of the accounting case filings."
While the number of accounting case settlements remained steady at 35, the total settlement value of these cases increased to approximately $1.5 billion, up 40% from $1.1 billion in 2024.
In 2025, 83% of accounting case settlements included allegations of GAAP violations. Although the number of accounting case settlements with alleged GAAP violations remained generally consistent with 2024, the median value of those settlements increased by 67%.
GAAP violations are also more likely to be added to non-accounting case filings than removed from accounting case filings as litigation progresses.
The average time to settle for accounting cases in 2025 increased to 4.1 years, the longest since 2015. The median accounting case settlement amount rose to $17.1 million, the highest level since 2022.
Five mega settlements (exceeding $100 million), totaling $897.6 million, represented almost 60% of the value of all accounting case settlements.
Median plaintiff-style damages — a proxy for the amount of potential investor losses that plaintiffs may claim in a securities class action with Rule 10b-5 claims — for 2025 accounting case settlements involving GAAP violations increased by 153% from 2024 to $294.9 million, the second-highest level in the past 10 years.
Last year, four plaintiff law firms — the Rosen Law Firm P.A., Pomerantz LLP, Glancy Prongay & Murray LLP, and Levi & Korsinsky — filed over half (56%) of the accounting cases, the lowest share in the past five years. The median filing lag for accounting cases filed by these four firms in the past five years (25 days) was 20 days shorter than accounting cases filed by other firms (45 days).
Short sellers played a large role in the lawsuits. Accounting cases filed in 2025 were nearly five times more likely to refer to a short-seller report than non-accounting cases, the biggest disparity between accounting and non-accounting cases since tracking began. Nevertheless, based on cases settled in 2025, references to a short-seller report in accounting case filings didn't lead to greater settlement amounts, as the median settlement amount for such cases was only $2.8 million.
