Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—Cornerstone finds half of settled class actions have a parallel derivative suit, (Aug 28, 2025)

By Anne Sherry, J.D.

One-fourth of derivative settlements include a monetary component other than plaintiff attorney fees, Cornerstone found.

Cornerstone Research released updated findings from its analysis of settlement outcomes for parallel derivative lawsuits. In about half of settled class actions, the group found, a derivative action is brought over the same or similar conduct.

When parallel derivative settlements include a monetary component other than plaintiff attorney fees, which happens in a quarter of cases, the median settlement amount is $9.2 million, and the median plaintiff attorney fee award is $2.8 million. The other 75 percent of derivative settlements include only what Cornerstone calls therapeutic provisions, and these see a median attorney fee award of $760,000. About 71 percent of monetary settlements also include therapeutic provisions.

Cornerstone found that monetary settlements occurred more often in derivative cases where there was a large settlement in the related securities class action, a corresponding SEC action, or corresponding criminal charges. Monetary derivative settlements and attorney fee awards were larger in the Delaware Court of Chancery although this could be down to the size of the related class action.

More specifically, monetary derivative cases filed in the Chancery Court settle for a median of $12.2 million, compared to $6.8 million in non-Chancery cases. But the median settlement amount in class actions related to Chancery derivative cases is $65 million, compared to $25 million for class actions that run parallel to derivative actions outside of Chancery. In other words, the ratio of the derivative settlement to the class action settlement is actually lower for Chancery cases.

Among monetary settlements, 23 percent had a corresponding SEC action and 9 percent had corresponding criminal charges. These figures are only 12 percent and 4 percent, respectively, for non-monetary settlements.

The analysis looked at settlements between 2019 and 2024 and adjusted the older figures for inflation. Cornerstone stated that it used numbers from the settlement stipulations and that these could differ from the amounts ultimately approved by courts.

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