In securities class actions, the settlement process goes through several steps: a tentative agreement between the parties, preliminary court approval, notice to the class, and final approval. While preliminary approval is a significant milestone, it does not guarantee final approval.
In this CRA Insights, Rahul Chhabra presents analysis of the Institutional Shareholder Services (ISS) data on cases filed in the past 10 years involving allegations under Section 10(b) of the Securities Exchange Act of 1934.
The data contains no examples of a settlement that had received preliminary approval to be denied at final approval. More commonly, there are procedural delays rather than a settlement termination or withdrawal.
Read the Law360 article, How Securities Class Action Deals Fare After Prelim Approval, here.
