In the following guest post, Ed Whitworth, the Head of Financial Lines at Inigo, Millie Refalo, Senior Underwriter at Inigo, and Yera Patel, Head of Casualty & Financial Lines Claims and Analytics at Inigo, summarize the results of a recent survey Inigo conducted of U.S. securities litigation defense counsel. The original of the survey summary previously was published on Inigo’s blog, here. We would like to thank Ed, Millie, Yera, and Inigo for allowing us to publish the report summary on this site.

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Inigo are excited to publish the findings from our 2026 Defense Counsel Survey.

This is the fifth iteration of the US Securities Litigation review, asking the top US Securities Defense Attorneys for their opinions on the hot topics right now. We cover some familiar subjects, whilst exploring some new and emerging trends.

In this year’s survey we ask if this is one of the hardest times in history to run a public company, whether Securities Class Actions are likely to rise and the possible consequences of deregulation. We also look at the future of AI litigation and the impact of the SB21 reforms in Delaware. The chapters are as follows:

How hard is it to run a public company today?

Securities class actions – Will uncertainty drive more filings?

Federal deregulation – Help or hindrance?

AI litigation – the new normal?

Delaware – Has SB21 helped?

We asked our survey respondents 49 questions, augmented by interviews and follow-ups, with fast-paced developments in Federal regulation and Securities filings to keep on top of. We highlight some of the key findings here but as ever, much more detail can be found in the survey.

Tough challenges for public companies likely to lead to more securities class actions, Inigo survey finds

Global turbulence, seesawing stocks and AI are keeping CEOs up at night, according to the Inigo Defense Counsel Survey 2026. Two-thirds of our respondents believe it is harder to run a company today than it was only a couple of years ago. The price of getting it wrong is being hit with a securities class action lawsuit.

Defense counsel told us they are fielding more calls than ever from worried executives asking their advice on what to say in earnings statements because they’re finding it so difficult to accurately predict their companies’ earnings in such a volatile climate. CEOs now, more than ever, risk being punished if they’re either too optimistic or pessimistic in their forecasts.

Making IPOs great again?

More respondents expect the number of securities class actions to be higher over the next 12 months than in the previous period, despite President Trump’s stated aim to make CEOs’ lives easier.

Under him, the SEC has proposed dropping quarterly and ESG reporting requirements, among other efforts at cutting red tape, while the regulator is now focused on making it more attractive to be a public company. It has also dropped dozens of actions and investigations against crypto firms, with the new SEC head Paul Atkins stating the regulator will now concentrate on protecting investors and safeguarding markets, rather than regulation through enforcement.

But relaxing reporting requirements is likely to create a gray zone, in which the regulators require companies to provide less information while analysts and investors want them to be as transparent as they were before, if not more. Several companies have already been sued by stockholders for skipping votes on ESG policy issues.

President Trump’s trade and physical wars have also given CEOs headaches, not least by sending their stocks on a rollercoaster ride. Market turbulence tends to trigger more securities class actions, while settlement values may rise because plaintiff’s attorneys and now institutional investors are becoming more aggressive, our survey found.

Mandatory arbitrations unlikely to lead to lower payouts

The SEC’s landmark decision to drop its decades-long opposition to companies about to float opting for mandatory arbitration provisions was also a topic of debate. Although champions of the move argue arbitrations will lead to public companies saving money through lower payouts and litigation costs, the defense counsel we surveyed aren’t convinced. A majority believe companies will not spend less in legal costs if they opt for arbitrations – and may even spend more; they were also evenly split over whether settlement values would come down.

Fears over federal judges being increasingly political are overblown, at least in the corporate law realm, defense counsel told us. Most said it was the quality of the brief that would be the decisive factor in whether a judge would grant a motion to dismiss in a case, while their experience and know-how mattered more than their political leanings. But we did gather anecdotal evidence that some circuits are regarded as being more challenging to defend actions in than others.

AI – threats and opportunities abound

The number of securities class actions citing issues related to AI have risen steadily in recent years and we predict they are set to grow further over the next 12 months. Two-thirds of respondents told us it was still useful to track AI cases as a separate category because the underlying facts in these actions are different from other litigation. Most thought that AI washing allegations will form the biggest number of class actions this year, followed by missed guidance due to AI disrupting their business. But a vocal, albeit small, minority believe that more companies will be held to account by their investors for heavy AI investment that didn’t lead to the sales boom promised by their leaders. “Mark my words, the AI infrastructure boom is the next Railway Mania” one attorney we surveyed told us. If the AI boom fails, the plaintiff’s bar will be waiting.

The Dexit hype has failed to materialise, with only a small number of companies moving their headquarters to other states. The sweeping reforms to Delaware’s corporate law contained in SB21 have helped companies, by reducing the scope, and therefore the cost, of books and records discovery requests – a bug bear for many companies – defense counsel told us. But the state’s Chancery Court judges are viewed to be politically polarised, if not overtly friendly to plaintiffs. The erosion of the Caremark ruling has made it easier to file derivative suits against companies in the state, which will be harder for companies to defend, our survey found.

For further insights, predictions, and the complete findings from our interviews with top US securities practitioners, read the full Defense Counsel Survey here .

A newly filed securities class action lawsuit against AI computing company Blaize Holdings is an example of how a lawsuit involving an AI company may have little or nothing to do with artificial intelligence.

The lawsuit filed against Blaize on August 4, 2026, in the Central District of California, alleges that the company misled investors about major customer contracts, improperly recognized revenue, and created a false impression of growth (Blaize SCA). While Blaize markets itself as an edge AI infrastructure company, the allegations reflect a traditional securities fraud theory rather than claims involving AI governance, AI safety, or AI-related regulation.

As discussed below, the case offers a classic securities fraud fact pattern and may offer important takeaways for D&O underwriters of AI companies.

A copy of the complaint can be found here.

The Blaize SCA

Blaize describes itself as a provider of programmable, energy-efficient edge AI computing solutions, with products designed to support computer vision, multimodal AI, and other AI inference workloads across industries including smart cities, industrial automation, telecommunications, logistics, retail, and defense. Its shares trade on Nasdaq under the symbol BZAI.

The Blaize SCA names Blaize Holdings, CEO and co-founder Dinakar Munagala, and CFO Harminder Sehmi as defendants and is filed on behalf of investors who purchased the company’s securities between July 18, 2025 and April 28, 2026. The complaint centers on Blaize’s public statements concerning two purportedly significant business relationships.

First, the complaint challenges the company’s July 2025 announcement of a collaboration with Starshine Computing Power Technology Limited, which Blaize described as carrying a minimum revenue value of $120 million over an 18-month period. According to the complaint, Starshine lacked meaningful business operations and did not appear to have proprietary products supporting the scope of the announced arrangement.

Shareholder plaintiffs also question Blaize’s statements regarding NeoTensr. In April 2026, the company announced a contract expected to generate up to $50 million in revenue and stated that it had already recognized more than $20 million in revenue from a NeoTensr order in the fourth quarter of 2025. According to the complaint, NeoTensr was a newly formed company with limited capital and insufficient resources to support transactions of that magnitude, calling into question Blaize’s revenue projections and reported revenue recognition. The complaint further alleges that NeoTensr and Starshine displayed rebranded third-party products on their websites and that Blaize similarly overstated its technological capabilities.

According to the plaintiffs, the truth was revealed on April 28, 2026, when short seller Pelican Way Research published a report questioning the legitimacy of the NeoTensr relationship. The report asserted that NeoTensr’s website had been registered only months before the announced transaction, that the company had limited capital, and that it lacked the apparent resources to support a purported $20 million transaction shortly after its formation. The report also claimed that products displayed on NeoTensr’s website appeared to be third-party products rebranded with NeoTensr and Blaize logos and drew parallels to Blaize’s previously announced Starshine arrangement.

Plaintiffs allege that immediately following publication of the Pelican Way report, Blaize’s share price declined 12.03%, falling from $2.16 to $1.90 per share. The Blaize SCA alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against the company and certain of its senior executives.

Discussion

At first glance, the Blaize securities class action might appear to be part of the growing wave of AI-related securities litigation involving companies such as Tempus AI and Innodata. However, unlike those cases, the Blaize complaint does not allege that the company engaged in “AI washing,” overstated the capabilities of its AI technology, failed to disclose AI-related risks, or misled investors about AI governance or regulation. Nevertheless, because the allegations arise from the company’s AI-focused business and operations, the suit can fairly be characterized as AI-related securities litigation, bringing the total number of such actions filed in 2026 to 18.

Instead, the complaint advances a much more traditional securities fraud theory. The plaintiff alleges that Blaize created a misleading impression of growth through transactions with counterparties that allegedly lacked the operational capacity and financial resources to support the reported business opportunities, while also improperly recognizing related revenue. In that sense, the lawsuit arguably fits within the category of AI-adjacent securities litigation. Although Blaize operates in the AI sector, the allegations do not concern the company’s AI capabilities, AI governance, or AI-related disclosures. Rather, they involve familiar securities litigation issues relating to customers, revenue recognition, and growth projections.

Nevertheless, the case remains noteworthy because it illustrates how investor enthusiasm for artificial intelligence can amplify disclosure risk. According to the complaint, the challenged transactions helped support a narrative of rapid growth in the AI infrastructure market. When questions later arose regarding those transactions, the resulting scrutiny from investors, analysts, short sellers, and plaintiffs’ lawyers was heightened by the market’s intense focus on AI-related companies.

The Blaize securities class action may also offer lessons for D&O underwriters of AI companies. One important takeaway is that evaluating AI-related risk involves more than assessing a company’s technology, AI capabilities, or AI-related disclosures. Traditional underwriting considerations, including the quality of key customers and business partners, the financial strength of counterparties, revenue-recognition practices, the collectability of receivables, and the sustainability of reported growth, remain critical. Notably, the allegations in the Blaize complaint focus almost entirely on these traditional business and financial reporting issues rather than on any alleged shortcomings in the company’s AI technology itself.

Ultimately, the Blaize SCA underscores an important point about the evolution of AI-related securities litigation. Although the company operates in the AI sector, the allegations involve customer, revenue-recognition, and disclosure issues that long predate the current AI boom. The case also serves as a reminder that, even for AI companies, traditional D&O underwriting fundamentals can be just as important as the underlying technology.

For many years, cybersecurity-related issues have been recognized as a potential source of D&O claims and liability. More recently, other D&O claims concerns, including artificial intelligence (AI), geopolitical issues, and even market manipulation allegations, have become more conspicuous, and cybersecurity-related issues have been less prominent. However, a securities suit filed earlier this month against Israeli-based web data collection company Alarum Technologies highlights that cybersecurity-related issues remain an important potential source of D&O claims and also shows how cybersecurity-related concerns continue to evolve. A copy of the August 5, 2026, complaint against Alarum can be found here.

Continue Reading Cybersecurity Vulnerabilities Lead to Securities Suit Against Israeli Company
Vijay Jyotish

In the following guest post, Vijay Jyotish, who writes on forecasting and decision-making under uncertainty, argues that launch-day decisions for self-insured space missions can expose companies to hundreds of millions of dollars in risk, yet often bypass board-level oversight because they are treated as engineering decisions rather than enterprise risks. The author contends that evolving Delaware case law increasingly requires boards to have documented systems for monitoring mission-critical risks, and recommends a process for recording and reviewing launch-day risk assessments before each launch. Our thanks to Vijay for allowing us to publish his article on this site. Here is Vijay’s article.

Continue Reading Guest Post: Board Oversight of Self-Insured Launch Risk

The wave of securities class actions alleging market manipulation involving recently public, low-float companies continues to grow. Notably, many of these lawsuits have involved non-U.S. companies that recently completed IPOs on U.S. exchanges. Two new pump-and-dump lawsuits, filed within a day of one another in the Southern District of New York against China-based iTonic Holdings Ltd. and Park Ha Biological Technology Co., Ltd., increase the number of market manipulation cases filed in 2026 to 13.

Continue Reading Pump-and-Dump Securities Suit Filing Trend Continues to Build
Paul Noon

In the following guest post, Paul Noon,  OBE, Emeritus Professor of AI and Innovation and former Deputy Vice Chancellor at Coventry University, argues that UK company directors face growing legal and governance risks from AI under both the UK Companies Act and the EU AI Act, whose broad extraterritorial scope can apply even to UK companies with no EU presence if their AI systems affect people in the EU. The author also considers the implications for U.K. boards. We would like to thank Paul for allowing us to publish his article on our site. Here is his article.

Continue Reading Guest Post: The UK Board’s AI Blind Spot

The D&O insurance implications of M&A litigation often extend beyond claims against the company and its directors and officers. When financial advisers are drawn into transaction-related litigation, companies that have agreed to indemnify them may be required to reimburse defense costs and settlement payments, raising questions about the extent to which those amounts could be covered under a public company D&O insurance program.

A pending coverage dispute arising out of Cornerstone Building Brands’ 2022 take-private transaction highlights those issues. At the center of the dispute is whether amounts a company pays to indemnify its financial adviser for defense costs and settlement payments constitute covered Loss under a public-company D&O policy.  Below is a discussion of Cornerstone’s coverage complaint, the parties’ competing summary judgment arguments, and potential D&O underwriting implications.

Continue Reading Coverage Dispute Tests Limits of Side C Coverage

In the following guest post, Javier Ybarra, Oswald Carvalho, and Sofia Garcia-Ollauri, all of Marsh Spain, consider a special feature of D&O insurance in Spain. Spain’s legal system allows civil damage claims to be pursued within criminal proceedings, which can lead courts to require directors and officers to post civil or bail bonds (“fianzas”) before liability is finally determined. As the authors discuss below, D&O insurers in Spain may be expected to provide or support these bonds, and companies with Spanish operations should ensure their D&O policies explicitly address bond coverage, reimbursement obligations, and related collateral requirements. Our thanks to the authors for allowing us to publish their article as a guest post on this site. Here is the authors’ article.

Continue Reading Guest Post: Are D&O Insurers Expected to Act as a “Bondsman” in Spain?

In a recent post (here), I wrote about a lawsuit that had just been filed against Microsoft’s board, alleging that the company’s directors had violated their fiduciary duties by knowingly allowing its AI development efforts to engage in copyright infringement. The case, I said, represented an example of “silent AI” – that is, the seepage of AI-related matters into various insurance coverages that were not consciously intended to provide coverage for certain exposures. The case showed how a matter that would not typically be covered under a D&O policy (copyright infringement) can translate into a potentially covered matter (a breach of fiduciary duty lawsuit).

In the latest example of this kind of lawsuit, a plaintiff shareholder has filed a derivative lawsuit against the board of Nvidia, alleging that its directors knowingly permitted its AI models to violate copyright holders’ rights and allowed violations of the Illinois Biometric Information Privacy Act (BIPA). Nvidia, the complaint alleges, has been the target of numerous copyright infringement actions, as well as class actions brought for alleged BIPA violations concerning individual voiceprints. The derivative lawsuit seeks to hold the company’s directors liable for the company’s “potentially massive liability and related costs and reputational damages” that the company faces in the underlying litigation. As discussed below, the new Nvidia derivative lawsuit, which may be found here, represents yet another example of “silent AI” in operation in the D&O context.

Continue Reading More About “Silent AI” and Follow-On D&O Litigation

As The D&O Diary has emphasized in numerous posts in recent months (most recently here), geopolitical issues represent an increasing source of D&O risk. The geopolitical issues include, among other things, sanctions, tariffs, and export controls. Another geopolitical issue that can have an impact on D&O risk is the enforcement of anti-money laundering (AML) laws. In the latest example of AML enforcement translating into D&O risk, in late July a plaintiff shareholder filed a securities class action lawsuit against British money transfer technology company Wise Group, a company whose U.S. bank charter application was denied due to AML concerns. A copy of the July 31, 2026, complaint can be found here.

Continue Reading Anti-Money Laundering Enforcement and Securities Litigation Risk