Federal court securities class action lawsuits filings slightly declined in 2022 compared to 2021, representing the third straight years of filing declines. The number of 2022 filings also fell below long-term annual filing averages; however, the number of core federal court securities class action filings in 2022 was only slightly below the number of 2021 core filings and the long-term historical annual average number of core filings.

Number of Federal Court Securities Class Action Filings

There were 196 federal court securities class action lawsuits filed in 2022, representing about a 10% decline in the number federal court securities suits compared to 2021 (when 218 securities class action lawsuits were filed). The 196 federal court securities suit filings in 2022 were also about 14% below the 1996-2020 average annual number of such filings of 228. (Please note that these figures reflect only federal court securities suit filings; state court securities suit filings are not included in the numbers and comparisons.)

The decline in federal court securities suit filings in 2022 represents the third straight year of a decline in the number of filings. The 196 total number of filings in 2022 was also well below the recent annual high in the number of federal court securities suit filings in 2017, when there were 411 filings. The number of federal court securities suit filings in 2022 was about 53% below the 2017 figure.

The Impact of Merger Objection Lawsuit Filings

Both the recent annual figures and the cross-year comparisons are distorted by the number of federal court merger objection lawsuit filings, particularly during the years 2017 to 2020. Thus, for example, in 2017 there were 198 federal court class action merger objection lawsuits filed (more than the total number of federal court securities lawsuit filings in 2022), whereas in 2022, there were only seven federal court merger objection lawsuits that were filed as class action lawsuits. (Readers should note that the merger objection lawsuits are still being filed in significant numbers; most of the merger objection suits filed in 2022 were filed as individual actions rather than as class actions, so these lawsuits are not reflected in the figures for the securities class action lawsuit filings.)

If the merger objection lawsuit filings are disregarded, the apparent decline in the number of federal court securities suit filings in 2022 looks less steep. Thus, there were an annual average of 192 core (or traditional) federal court securities class action lawsuit filings during the period 1996-2020, which is only slightly higher than the 189 core federal court securities suits filed in 2022. Similarly, the 189 core federal court securities class action lawsuit filings in 2022 is only relatively slightly below the 200 core filings in 2021.

Special Impact Categories of Securities Lawsuit Filings

Several different types of lawsuits contributed to the overall number of securities suit filings, particularly the numbers of lawsuit relating to SPACs, relating to COVID-19, and relating to cryptocurrency and other digital assets.

Since January 1, 2021, there have been a total of 54 SPAC-related federal court securities class action lawsuits, including 23 filed in 2022. The 23 SPAC-related securities suits filed in 2022 represent about 11.7% of all 2022 securities suit filings.

There have been 61 total COVID-19-related securities suit filings since the initial COVID outbreak in the U.S. in March 2020, of which 18 were filed in 2022, 19 were filed in 2021, and 24 were filed in 2020. The 18 COVID-related securities suit filings in 2022 represented about 9% of all securities suit filings during the year.

In addition, there were ten crypto and digital asset-related securities suit filings, representing about 5% of all 2022 federal court securities suit filings. The SPAC, COVID, and Crypto filings together totaled 51 suits during the year, representing more than a quarter (26%) of all 2022 federal court securities class action lawsuit filings.

District Courts with the Highest Number of Securities Suit Filings

The 2022 federal court securities suit lawsuits were filed in 31 different federal district courts, when first-filed complaints only are considered. The federal district court with the greatest number of first-filed securities suit filings were: Southern District of New York (54); the Northern District of California (29); the Eastern District of New York (18); and the Central District of California. There were 72 securities suits total filed in the Southern and Eastern District of New York, representing 36.7% of 2022 federal court securities suit filings. There were 53 securities suits total filed in the Central, Northern and Southern Districts of California, representing 27% of all federal court securities suit filings during the year. These five district courts combined for 125 federal court securities suit filings during the year, representing 63% of all federal court securities class action filings in 2022.

Securities Suit Filings by Industry

The federal court securities lawsuits filed in 2022 were filed against a wide range of kinds of companies. The 196 federal court securities class action suits filed in 2022 were filed against companies in 83 different SIC Code categories. The SIC Code category with the highest number of companies sued in securities suits during the year was the SIC Code category 2834 (Pharmaceutical Preparations), which had 17 companies sued during the year. The SIC Code category with the next highest number of companies sued is the SIC Code Category 7372 (Prepackaged Software), which had 16 companies sued.

Overall, the industry with the highest number of securities suits overall is the high-tech industry. There was a combined total of 34 federal court securities class action lawsuits filed against companies in the 737 SIC Code Group (Computer Programming and Data Processing), representing about 17% of all 2022 federal court securities class action lawsuit filings.

Another industry with a significant number of securities class action lawsuits was the life sciences sector. There were a combined total of 24 securities suits filed against companies in the 283 SIC Code Group (Drugs) and eight securities suits filed against companies in the 384 SIC Code Group (Medical, Surgical and Dental Instruments and Supplies). There was a total of 32 securities suits filed against life sciences companies in these two SIC Code Groups, representing about 16% of all 2022 federal court securities class action lawsuits. It is noteworthy that in 2022, more high-tech companies than life sciences companies were sued in federal court securities suits; for many years, the life sciences sector has typically experienced the highest number of federal court securities suits.

There was a total of 66 federal court securities class action lawsuits filed against companies in the life sciences and high-tech sectors taken collectively in 2022, representing 33.6% of all federal court securities class action lawsuit filings.

Securities Suit Filings Against Non-U.S. U.S.-Listed Companies

32 non-U.S. U.S.-listed companies were hit with federal court securities class action lawsuits during 2022, representing about 16.3% of all federal court suits filed during the year. Among the companies sued in these 32 lawsuits were companies based in 13 different countries. The country with the highest number of companies filed was China (11), the U.K (5), Canada (3), and Switzerland (3).

Securities Suit Filings Against IPO Companies

There were 32 IPO companies sued in federal court securities suits during 2022, representing about 16.3% of all securities suit filings during the year. The corporate defendants in the cases were members of the IPO class of 2019 (1); 2020 (8); 2021 (22); and 2022 (1). The high number of companies from the IPO class of 2021 is likely a reflection of the overall high number of IPOs completed during the year.