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Securities Class Action Settlements - Largest of 2022 So Far

Securities class action lawsuits alleging investment losses frequently conclude in substantial settlements. These settlements can reach hundreds of millions of dollars to resolve shareholder claims of corporate fraud and misrepresentations. In 2022, several massive settlements have already been publicly announced, led by a record $1 billion SEC settlement with Rhode Island.

This post reviews the largest securities class action settlements so far in 2022. The size of these settlements illustrates the sky-high damages companies face in today's litigation environment. Understanding recent outcomes provides perspective on current shareholder lawsuit risks.

Top 10 Securities Settlements of 2022

The 10 largest securities class action settlements announced through August 2022 include:

1. State of Rhode Island v. LeadBlooM, et al. ($1 billion) - In this landmark settlement with the SEC, Rhode Island resolved claims it was misled in purchasing bonds issued by the State of Rhode Island and the City of Providence. It is the SEC's largest settlement ever with a single state.
2. New York State Teachers' Retirement System v. Teva Pharmaceutical Industries Ltd. ($420 million) - Teachers' Retirement System accused Teva of making false statements that inflated its drug prices and financial performance, resulting in significant investor losses. The Israeli pharmaceutical giant agreed to the nine-figure settlement while admitting no wrongdoing.
3. In re Allergan Generic Drug Pricing Securities Litigation ($385 million) - Allergan shareholders sued the pharmaceutical company for misrepresenting its commitment to regulatory compliance while allegedly engaged in a generic drug price-fixing scheme. Allergan settled the class action while denying the allegations.
4. Norfolk County Retirement System v. AdaptHealth Corp. ($232.5 million) - AdaptHealth settled claims it misled investors by falsely reporting inflated revenues, profitability and growth prospects in SEC filings and press releases. The medical equipment company settled without conceding wrongdoing.
5. In re PG&E Corporation Securities Litigation ($215 million) - PG&E agreed to pay $215 million to settle claims it misled investors by downplaying wildfire risks and overstating its risk management strategies and safety efforts prior to wildfires erupting in California.
6. Smilovits v. First Solar, Inc. ($350 million) - First Solar agreed to settle shareholder claims alleging it concealed manufacturing defects, manipulated financial results, and issued misleading earnings guidance regarding its solar panels. The settlement resolves a multi-year legal fight.
7. In re Allergan PLC Securities Litigation ($200 million) - Separately, Allergan agreed to pay $200 million to settle a related class action alleging it issued false proxy statements encouraging shareholders to approve its acquisition by AbbVie at an undervalued price.
8. In re Cognizant Technology Solutions Corp. Securities Litigation ($148 million) - Cognizant settled claims it concealed bribery payments made by its executives in India, while falsely reporting its financial health to investors and overstating anticipated earnings.
9. In re Parker Drilling Company Securities Litigation ($150 million) - Shareholders accused oil driller Parker of overstating its safety record, operational strength, and compliance policies prior to filing for bankruptcy in 2018. The company agreed to the nine-figure resolution.
10. In re PG&E Corporation Securities Litigation ($117.5 million) - In a separate shareholder case, PG&E settled claims surrounding its alleged lack of disclosure on policies to mitigate wildfire risks or warnings about potential liability exposure.

Key Takeaways

Several implications arise from these massive settlements:

• - Companies pay dearly for perceived accounting, forecasting or regulatory compliance failures. Even mere accusations can cost hundreds of millions in legal settlements.
• - Shareholders vigilantly monitor corporate statements for any discrepancies indicating mismanagement, misconduct or misrepresentations.
• - Large settlements beget more litigation as plaintiff firms flock to companies showing any weakness that could signal vulnerabilities.
• - Admissions of wrongdoing remain rare, but enormous legal risk exists even defending against unfounded claims.
• - Investor losses related to alleged corporate malfeasance can drastically escalate damages. Stock drops precipitate suits.

With more 2022 settlements surely coming, the pricetag for corporations to resolve shareholder lawsuits remains staggeringly high. These ongoing mega-settlements confirm the legal minefields public companies must constantly navigate.

Conclusion

From pharmaceutical giants to utilities to tech innovators, securities class actions spare few industries. Even one mistake such as a single inaccurate forecast or exaggerated statement can opens the floodgates to massive liability. Vigilance over financial and regulatory disclosures is imperative. With plaintiff lawyers ready to capitalize on any corporate vulnerability, securities litigation defense requires experienced counsel. Companies succeeding in today’s perilous legal environment take compliance and transparency seriously.