Introduction -

This report provides, for what we believe is the first time, a comprehensive quantitative analysis of publicly available lawsuits and settlements of so-called opt-out securities cases: cases in which at least one putative class member excludes itself from the class in order to pursue a separate lawsuit against the defendant. We analyzed publicly available information about the judgments and settlements that resulted from opt-outs from securities class action settlements reached between 1996 and 2011.

Key Findings -

- Out of 1,272 securities class action settlements between January 1, 1996, and December 31, 2011, we identified 38 cases in which at least one plaintiff opted out of the class action settlement and pursued a separate case against the defendant. We obtained opt-out settlement amount information in 21 of these 38 cases.

- Plaintiffs are more likely to bring opt-out cases stemming from larger class action settlements: 53 percent of class actions with class settlements of at least $500 million had at least one related opt-out case, compared with 3 percent of all class action settlements.

- Opt-out settlements represented an average of 12.5 percent of the value of the class action settlement, excluding optouts, and a median of 3.8 percent...

This Article Co-Authored by Cornerstone Research and Latham & Watkins.