Filings involving company announcements of internal control weaknesses hit highest level in 10 years
By Joseph McCafferty
April 19, 2016
While Valeant Pharmaceuticals continues to battle allegations of bookkeeping misdeeds, it's not the only company dealing with accounting problems. The number of class-action securities law suits based on allegations of accounting missteps increased for the third straight year in 2015, according to a new report from Cornerstone Research. There were 71 such class-actions in 2015, up from 69 in 2014.
Accounting-based class-actions continued to costs companies a bundle, too. Accounting case settlement dollars reached $2.6 billion in 2015. Not only did the number of accounting case filings increase in 2015, the market capitalization losses associated with those filings jumped as well," said Elaine Harwood, a vice president of Cornerstone Research and head of the firm's accounting practice.