At a Glance

  • A recent report from Cornerstone Research, an economic and financial consulting firm, shows that the number of accounting-related securities class action lawsuits filed in 2025 fell 40% year-over-year to 34 cases, marking the first decline in four years and the lowest level in more than two decades.
  • At the same time, the total settlement value of accounting-related cases in 2025 surged 40% year-over-year to approximately $1.5 billion. The report, released last week, also found that the median settlement amount rose 38% year-over-year to $17.1 million, the highest since 2022.
  • The average time to settlement for cases reached 4.1 years, the longest in a decade, underscoring the "long-standing relationship between case duration and settlement amounts," said Kelly Lancer, a senior manager at Cornerstone and one of the report's co-authors, in a press release. "The longer an accounting case takes, the larger the eventual settlement tends to be," Lancer said.

Key Insights

The decline in the number of class action filings last year echoes the reduction in accounting and auditing enforcement actions by the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) revealed in an earlier Cornerstone report.

Issuer defendants targeted in accounting cases filed in 2025 were notably larger than in prior years. The report noted that the median pre-disclosure market capitalization of issuer defendants exceeded $1 billion for the first time since 2022. Overall, the size of issuer defendants in such settlements rose significantly in 2025—median total assets grew 30%, and median pre-disclosure market capitalization grew 15%.

As a result, settlement amounts in accounting-related class actions reached their highest level in five years, accounting for more than half of the total value of all securities class action settlements in 2025. This occurred despite the number of settlements in 2025 not increasing compared to 2024.

The report shows that 97% of cases filed in 2025 included allegations of violations of Generally Accepted Accounting Principles (GAAP), the highest proportion since 2015. The most common GAAP violation allegations included: asset valuation/impairment (44%), revenue recognition (24%), related-party disclosure (6%), and liability/contingency valuation issues (3%). Additionally, "other miscellaneous" allegations accounted for 35% of violation claims.

Frank Mascari, a vice president at Cornerstone and one of the report's co-authors, said in a press release that although asset valuation and impairment issues were the most common violation allegations, they were often added during litigation rather than included in the initial complaint.

Last year, a growing number of accounting cases were tied to growth-related and controversial digital currency, financing, and technology issues that companies were addressing. The report stated that accounting cases related to artificial intelligence, cryptocurrency, and special purpose acquisition company (SPAC) industries accounted for the highest proportion at 24%, up 10 percentage points from 2024.

Meanwhile, one-third of all cryptocurrency-related securities cases filed in 2025 involved accounting issues, a proportion that has more than doubled over the past five years.