Accounting Flaws Now Prime Target In Securities Class Actions

For the third straight year, there has been an increase in the number of securities class actions filings with accounting-related allegations, says a report from Cornerstone Research. There was also a significant increase in the market capitalization losses associated with those filings. The total settlement value for cases with accounting allegations in 2015 was $2.6 billion, which was almost three times the level for 2014. The study breaks down the numbers in a variety of ways, including by industry, location of company, type of allegation, and factors affecting settlement. The majority of accounting-related filings involve allegations of internal control weaknesses.