The increase in settlements is notable given that the first quarter is not typically one of the more active periods for SEC settlements.

Although large in quantity, average and median settlement amounts were lower than for the SEC's full fiscal year 2009 (FY09). The average settlement for companies whose settlement included a monetary payment in the fiscal first quarter was $4.7 million, compared to $10.8 million in FY09. The median company settlement was $0.4 million, compared to $1 million in FY09. Monetary payments were a component of 41% of company settlements and 58% of individual settlements in the first fiscal quarter.

The proportion of company settlements that included a monetary payment was the third-lowest in any quarter since the passage of the Sarbanes-Oxley Act and well below the 56% rate for 4Q02 through 4Q09. For individuals, however, the proportion of settlements that included a payment was consistent with recent levels.

According to SEC Settlements Trends: 1Q10 Update co-author Dr. Elaine Buckberg, "The increase in the number of settlements in the first fiscal quarter of 2010 may signal increased enforcement and a higher rate of settlements going forward. The increase is composed of relatively low-value settlements and includes a relatively high proportion of company settlements without any monetary payment. This may indicate that the SEC is pursuing all infractions of the securities laws, or it may represent a one-time 'clearing out' of relatively minor cases."

SEC Settlement Trends Report Series SEC Settlements Trends: 1Q10 Update, historical SEC settlements data, and previous SEC settlement trends reports can be viewed on NERA Economic Consulting's Securities Litigation Trends website at www.securitieslitigationtrends.com.

This report is authored by NERA Senior Vice President Dr. Elaine Buckberg, Senior Consultant Jan Larsen, and Dr. Baruch Lev, NERA Special Consultant and Philip Bardes Professor of Accounting and Finance at the Stern School of Business and Director of the Vincent C. Ross Institute of Accounting Research at New York University.