Accounting-related securities class-action filings fell from 57 to a record low of 34 in 2025, although many of these cases were filed against larger issuer defendants compared to prior years, according to a new report from Cornerstone Research.
The report, Accounting Class Action Filings and Settlements—2025 Review and Analysis, also found that the total settlement value in accounting cases rose 40% to $1.5 billion and represented 51% of total securities class-action settlement dollars in 2025, the highest proportion since 2020.
“In 2025, asset valuation and/or impairment issues were the most common GAAP violation alleged in accounting-related securities class-action filings and settlements,” Frank Mascari, a report coauthor and vice president at Cornerstone Research, said in a statement. “These allegations are often being added as litigation progresses rather than being established in the initial complaint.”
The following are key findings pertaining to accounting case filings in 2025, according to the report:
- For the first time in four years, accounting case filings fell, down 40% in 2025 to 34 cases, the lowest level since tracking began in 2004.
- GAAP violations were alleged in 97% of accounting case filings, the highest level since 2015, while only 38% of accounting case filings included allegations of internal control weaknesses, the lowest proportion since 2009.
- Accounting case filings involved more larger issuer defendants than in recent years. 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 declined 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,” Sally Bai, a report coauthor and principal at Cornerstone Research, said 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.”
The following are key findings pertaining to accounting case settlements in 2025, according to the report:
- Although the number of accounting case settlements held 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 (more than $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 last 10 years.
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“Both the total and median settlement values for accounting cases surged in 2025 even as settlement activity held steady, reinforcing the long-standing relationship between litigation duration and settlement size,” Kelly Lancer, a report coauthor and senior manager at Cornerstone Research, said in a statement. “In other words, the longer accounting cases take to settle, the larger the eventual settlement value.”
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