Cornerstone finds uptick in “core” accounting case filings, settlements

By Anne Sherry, J.D. A report from Cornerstone Research finds that the number of securities case settlements involving accounting-related claims declined in 2018, but the total settlement value increased enormously, driven by five “mega settlements” of over $100 million each. Although the number of case filings dropped overall, the number of “core” accounting case filings increased for the first time since 2014. Last year saw a total of 143 new accounting cases, 79 of which were M&A-related and 64 of which were core cases. Definitions. Cornerstone considers cases to be accounting cases if they allege violations of GAAP or other reporting standards, auditing violations, or weaknesses in internal controls over financial reporting. M&A filings have Section 14 claims but no Rule 10b-5, Section 11, or Section 12(2) claims. “Core” filings exclude M&A filings. Mega cases. All five 2018 “mega settlements” involved alleged…

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