Securities Fraud, ERISA Class Action Settlements Surge in 2025

Last year, the total amount of the 10 largest settlements of securities fraud and ERISA-related class action lawsuits surged by more than $1 billion to more than $4 billion according to a report from law firm Duane Morris LLP. Almost half of that total came from settlements with Tesla Inc., Alphabet Inc. and Alibaba.com Ltd.

“On the securities front, over the past three years, plaintiffs have filed dozens of lawsuits alleging that various defendants made false or misleading statements related to [artificial intelligence] technology,” the report stated. This includes claims that companies overstated their AI capabilities, effectiveness, or revenue generation, which the report refers to as “AI washing.”

The report cited as an example a securities class action suit against Apple Inc. that accused the tech giant of making misleading and false statements regarding its digital personal assistant Siri’s generative artificial intelligence features. The plaintiffs alleged that at its annual Worldwide Developers Conference and on earnings calls, Apple claimed that its AI solution called Apple Intelligence would create a more advanced and capable Siri.

The complaint alleged that Apple stated the new technology would be available in early 2025, but announced only a few months later that the rollout was going to take longer than expected, sending Apple’s share price $47 lower.

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“Investors have shown a willingness to pay a premium for shares of companies that appear positioned to capitalize on the effective use of AI,” the report stated. “When projections fail to materialize, however, and share prices decline, plaintiffs are poised to take advantage.”

Duane Morris predicted an upward trend of key decisions and new cases related to AI lawsuits in 2026, noting that this “burgeoning area” of the law continues to expand.

“With AI continuing to flourish, the implications of its development, use and advertisement are providing the raw material for creative plaintiffs’ class action lawyers,” the report stated.

Huge Settlements

The three largest securities settlements of 2025 were related to Tesla, Alphabet and Alibaba, according to the report. The biggest was a $919 million settlement of a case filed against Tesla CEO Elon Musk, which alleged that the electric vehicle maker’s board members overpaid themselves from 2017 through 2020.

The second largest was a $500 million shareholder derivative litigation against Google owner Alphabet that alleged the tech giant’s executives engaged in anticompetitive and monopolistic practices.

The third largest was a $433.5 million settlement with Alibaba Group, which was accused of making misstatements about the company’s exclusivity practices and its planned initial public offering of a financial tech affiliate.

The law firm also reported that 10 largest class action settlements related to the Employee Retirement Income Security Act in 2025 totaled $680.3 million, up from $413.3 million one year earlier. Nearly half of last year’s total came from one settlement.

The largest was a $332 million settlement in a class action lawsuit filed against the Colgate-Palmolive Co., which alleged the company failed to properly calculate retirement benefits.

The second largest was an $84 million settlement of legal action against GreatBanc Trust Co., which accused the bank holding company of using dividends earned by its employee stock ownership plan to meet its 401(k) matching obligations.

The third largest ERISA settlement was for $69 million, resolving a lawsuit against UnitedHealth Group Inc., which was accused of imprudence, disloyalty, prohibited transactions and failure to monitor in violation of ERISA.

The report also noted that 95% of ERISA lawsuits were granted class certification, while securities fraud lawsuits were granted class certification 79% of the time.

The overall largest class action settlement was for $38 billion to resolve claims between 12 million U.S. merchants and Visa, Mastercard and several banks over certain rules set by the credit card companies. The plaintiffs alleged that the rules reduced choice and forced merchants to accept higher-fee cards without being able to refuse them or direct consumers toward cards with cheaper rates.