Accounting-related class actions fall, settlements soar: Cornerstone

Dive Brief:

The number of accounting-related securities class action lawsuits filed fell 40% in 2025 to 34 from the year earlier, marking the first decline in four years as well as the lowest level of such suits in over two decades, according to a new report from Cornerstone Research, an economic and financial consulting company.
The total value of accounting-related case settlements, meanwhile, surged 40% in 2025 year-over-year, reaching about $1.5 billion. The median settlement amount surged by 38% to its highest total since 2022 at $17.1 million, the report released last week found.
The average time to settle the cases reached 4.1 years — the longest timeframe in a decade, reinforcing the “longstanding relationship between litigation duration and settlement size,” Kelly Lancer, a senior manager at Cornerstone and one of the report coauthors said in a press release. “The longer accounting cases take to settle, the larger the eventual settlement value,” Lancer said.

Dive Insight:

The drop in class action cases last year paralleled a drop in accounting and auditing and enforcement actions executed by the Securities & Exchange Commission and the Public Company Accounting Oversight Board, revealed in an earlier Cornerstone report.

The accounting cases filed in 2025 took aim at much larger issuer defendants compared to years prior. For the first time since 2022, median-pre-disclosure market capitalization of issuer defendants surpassed $1 billion, the report stated. Overall, the size of issuer defendants in such settlements rose significantly in 2025 — increasing 30% in median total assets and 15% in pre-disclosure market capitalization.

As a result, the settlement amounts of accounting-related class action cases hit their highest totals in five years — accounting for over half the value of all settlements in 2025. That’s despite the fact that the number of settlements did not grow in 2025 compared to 2024.

Of the cases filed in 2025, 97% included Generally Accepted Accounting Principle violation allegations, the highest levels since 2015, according to the release. The most common GAAP violations cited were y asset valuation/impairments (44%), revenue recognition (24%), related party disclosures (6%) and liability/contingencies valuation issues (3%), according to the report. “Miscellaneous other” claims accounted for 35% of violation allegations.

Despite being the most common violation cited, asset valuation and impairment issues are often added into complaints, rather than cited e initially, Frank Mascari, Cornerstone’s vice president and a report co-author said in a statement in the release.

Last year, an increasing number of accounting cases were tied to growing and controversial digital currency, financing and technology issues that companies are navigating. The highest share of accounting case filings, 24%, were related to artificial intelligence, cryptocurrency and special purpose acquisition industries — a 10-percentage point uptick compared to 2024, the report stated.
Meanwhile one-third of all cryptocurrency cases filed in 2025 involved accounting issues — an amount that more than doubled over the past five years. .