GE, EQT Lead 40% Surge in Payouts for Investor Accounting Suits

Five large settlements in some lengthy lawsuits propelled a 40% bump in the total dollars public companies paid investors in 2025 to end class actions alleging accounting misdeeds.

The duration of those cases, which involved General Electric Co., EQT Corp., Rio Tinto Group, and two other corporations, helped drive the overall total to $1.5 billion, up from $1.1 billion in 2024, according to a Cornerstone Research report issued this week. The amount shot up even though the total number of settlements, 35, remained static, according to the report, which focused on the subset of securities class actions that allege accounting issues.

One reason for the uptick could simply be that “the cases involved in this report have larger overall class-wide damages, so they’re settling for bigger numbers,” said plaintiffs’ attorney Kara Wolke of Glancy Prongay Wolke & Rotter LLP. Another potential explanation is “cases that get further along in the procedural hurdles after they get class certification,” she said. “Those will tend to settle for a higher percentage of the estimated class-wide damages.”

About 80% of accounting-related securities settlements in 2025 came in at $50 million or less, according to Cornerstone. “The percentage of large (greater than $50 million) and mega (greater than $100 million) settlements doubled from 2024 to 2025 (from 9% to 20%),” the report said. The nearly $898 million value of the five mega settlements “represented almost 60% of the value of all accounting case settlements in 2025,” the report said.

Cornerstone didn’t identify the cases, but a report by National Economic Research Associates recapping securities class actions in 2025 specified seven, including non-accounting cases, that resulted in triple-digit settlements.

GE’s $363 million deal with investors—alleging a practice known as long-term factoring that preceded a $1 billion shortfall in cash from operating activities—topped the subset of accounting cases in NERA’s list. Energy company EQT’s $168 million settlement after six years of litigation over expense accounting was next, followed by Rio Tinto’s nearly $139 million settlement of claims the mining company withheld information about ballooning copper mine costs and delays; Alta Mesa Resources Inc.'s payment of $126 million in a suit over a $3.1 billion write-down in response to an audit that showed accounting weaknesses; and VMware Inc.'s nearly $103 million settlement of investor claims that it manipulated its revenue accounting.

Thomas Redburn Jr.of Lowenstein Sandler LLP echoed that the length of litigation contributes to those high settlement values. “You really can’t draw any reliable conclusions from one year’s crop of settlements,” he said. “What is definitely a trend in the industry that’s been happening for at least the last five, if not 10 years, is that more and more defendants are not settling after a motion to dismiss. They are actually taking the case through class certification because there’s been so much legal activity in the class certification area that a lot of defendants believe that you essentially have a second chance of killing the case.”

Write-Downs and Restatements

The new data also shows a dramatic slip in the value of settlements involving write-downs and a continued decline in the prominent role that financial restatements have typically played in driving up settlement values.

In 2024, the median settlement value for cases alleging write-downs spiked, due in part to a mega settlement in a write-down case, according to the Cornerstone report. But in 2025, that median amount fell by 83%, and represented a 53% decline from the write-down median spanning 2016 through 2024, according to the report.

Underlying that are shifts by the plaintiffs’ bar as some kinds of cases become harder to bring, attorneys say. Changes in the law and judges’ views have affected what accounting allegations are brought and survive dismissal efforts, they say.

“There’s a full line of cases holding that most accounting judgments are opinion statements under the securities laws, which makes them harder to prove misleading,” said defense-side attorney Kristin Murphy of Latham & Watkins LLP. “Plaintiffs are taking a hard look at whether they can meet that burden before they file.”

Trend Reversal

Write-down cases appear to be part of that trend. “It does confirm something I’ve thought along for a while, which is that those cases are getting more and more difficult to bring,” said Lowenstein Sandler’s Redburn, who represents institutional investors who opt out of securities class actions. “Those cases, when you get right down to it, are based on opinions as opposed to statements of fact.”

“That makes them hard to bring and hard to prosecute in 10b-5 world,” he said, referring to a Securities and Exchange Commission rule implementing anti-fraud provisions of the securities laws.

Meanwhile, the 2025 annual report is the third in a row by Cornerstone Research showing “a reversal of the historical trend where cases involving restatements typically lead to larger median settlement values than those without a restatement,” the report’s authors, Frank Mascari, Sally Bai, and Kelly Lancer, said in an email.

“Courts are increasingly persuaded that restating earnings doesn’t, by itself, mean you committed fraud,” said the defense-side attorney, Murphy. “We saw that play out in The Metals Company case in the Central District of California.” The ocean floor mining company defeated an investor suit over debt levels and accounting abilities for complex transactions in January of this year.

The specific cases in a given year play a role, too. “Anecdotally, notwithstanding the fact that cases with restatements tend to be considered stronger on the merits, my guess is that that pool of cases just had overall lower class-wide damages,” said Glancy’s Wolke.