Those who follow securities class action lawsuit filing trends know that a significant number of the new securities suit filings each year involve non-U.S. companies with listings on U.S. exchanges. The number of lawsuit filings fluctuate year to year, but the long-term trends are important to follow for those advising non-U.S. companies with U.S. securities litigation exposure. A recent report from the Dechert law firm takes a detailed look at the 2024 securities suit filings against non-U.S. companies. The March 2025 report, which is entitled “U.S. Securities Fraud Class Actions Against Non-U.S. Issuers: 2024 Developments” can be found here.

According to the report, there were 36 federal court securities class action lawsuits filed against non-U.S. issuers in 2024, representing about a 9% increase from the 33 securities suits filed against non-U.S. companies in 2023. The increase in 2024 in the number of these suits is roughly proportionate to the increase in the overall number of securities suits filed in 2024 compared to 2023 (as there were 222 federal court securities class action lawsuits filed in 2024, while 2013 were filed in 2023). There were 34 securities suits filed against non-U.S. companies in 2022. While the number of 2024 filings against non-U.S. companies was the highest in three years, the number of 2024 filings was still significantly lower than the high of 88 filings in 2020.

Over the prior three years, the country with the most U.S. securities lawsuit filings was China. However, in 2024, Chinese companies were not the most frequently sued among non-U.S. companies. Of the 36 non-U.S. companies sued in 2024, seven were headquartered in the U.K., while five were based in Canada and Israel, respectively. Three suits were filed against companies based in China and Germany, respectively.

The 36 securities class action lawsuits filed in 2024 against non-U.S. companies spanned 16 different industries. The industry with the largest number of securities suits involving non-U.S. companies was the automobile industry, including four cases that targeted EV companies. The industry with the next largest number of 2024 lawsuits was the biotechnology and drugs industry, with five, and the software and programming industry, also with five.

Of the 36 securities suits filed against non-U.S. companies in 2024, eleven involved allegations of overstated growth and revenues; these allegations spanned companies in a wide variety of industries. Of particularly interest may be that of these 11 cases, two involved allegations that companies overstated their AI capabilities.

The report notes that the 2024 cases involved “a broad array of alleged misrepresentations and/or omissions across various industries, highlighting a trend of overstated growth and financial projections and misleading statements regarding financial health and operational capabilities. From AI and advanced vehicle technology to oil and gas and retail, the allegations underscore the importance of transparency and accurate reporting.”

As far as the law firms filing the securities suits against non-U.S. companies, the U.S. law firm filing the largest number of suits was the Pomerantz law firm, which filed 10 new suits against non-U.S. companies in 2024. The Bronstein, Gerwitz & Grossman firm filed seven new suits against non-U.S. companies in 2024, followed by the Rosen Law Firm, with six. In the recent past, the Rosen Law Firm had been responsible for the highest number of filings; for example in 2023, the Rosen Law Firm was responsible for filing 11 of the new suits against non-U.S. companies, and had filed the highest number of suits in each year during the period 2018 through 2021. The Rosen Law Firm was appointed lead counsel in the most cases in 2024 (4), followed by the Robbins, Geller, Rudman & Dowd law firm (3).

There were 22 court motions to dismiss decisions in 2024, in cases that were filed against non-U.S. companies in 2023 and 2022. Of the 22 decisions, the courts granted the motions to dismiss in their entirety in 15 cases (including ten without prejudice and five with prejudice). This implies a dismissal rate of 68%, although to be sure many of these dismissals were without prejudice, meaning that the plaintiffs have the opportunity if they wish to try to replead their allegations to cure the deficiencies the court had found. Of the 22 rulings on motions to dismiss during 2024, six granted dismissal in part, meaning that a portion of the claims will continue into discovery. In one case, the court denied dismissal in its entirety.

Of the 22 motion to dismiss decisions in 2024, seven decisions were dispositive, resulting in the closure of the cases with no motion for reconsideration or pending appeal. Three of the decisions were appealed to the Courts of Appeals.

In 2024, as was the case in 2023 and 2022, the primary reason courts dismissed complaints “was because plaintiffs failed to allege an actionable misstatement or omission, though the courts also found that plaintiffs failed to allege a strong inference of scienter.”

In its conclusion section, the report notes that the statistics make it clear that “a company does not need to be based in the U.S. to face potential securities class action liability in U.S. federal courts.” Accordingly, the report notes, “it is imperative that non-U.S. issers take steps to mitigate their risks not only in their home jurisdictions but also in the U.S.”

The report closes by identifying a number of steps non-U.S. companies can take to try to reduce their securities litigation exposure, in particular by taking steps to ensure when making statements and disclosures to “ensure accurate growth and financial projections”; “speak truthfully and disclose both positive and negative results”; “ensure that a disclosure regimen and processes are well-documented and consistently followed”; “work with counsel to ensure that a disclosure plan is adopted and covers disclosures made in press releases, SEC filings and by executives”; and “understand that companies are not immune to issues that may cut across all industries.”

Discussion

The report’s findings and analyses are interesting and detailed and worth reading at length and in full.

However, I note the following with respect to the report’s discussion of the number of securities class action lawsuit filings involving non-U.S. companies. While the analysis of the absolute number of securities lawsuits filed each year is interesting, this analysis does not take into account that the number of non-U.S. companies listed on U.S. exchanges varies over time.

Of particular interest in thinking about the number of lawsuits filed against non-U.S. companies is the fact that during the ten-year period 2015-2024, the percentage of non-U.S. companies among all companies listed on U.S. exchanges increased every year, according to the NERA Economic Consulting annual report on U.S. securities litigation (discussed at length here).

As I put it in my discussion of the NERA report, in 2024, “while foreign companies represent 25.9% of all U.S.-listed companies, a ten-year high, lawsuits against foreign companies represented only 16.8% of filings in standard cases were against foreign companies, a ten-year low.” I also added in my discussion of the NERA report that “during each year in the three-year period 2021-2024, the percentage of foreign U.S.-listed companies has exceeded the percentage of annual federal court securities suits against foreign companies.”

In other words, for those tasked with advising non-U.S. companies about their potential U.S. litigation exposure, it is important not only to consider the number of U.S. lawsuits filed against non-U.S. companies, but it is also important to think about the proportion of non-U.S. companies among all U.S. listed companies. This comparison shows that while the number of lawsuits may be stable or even increased slightly (as was the case in 2024), the litigation risk overall among non-U.S. companies may actually be declining, at least when considered as an expression of the number of non-U.S. companies among all companies listed on U.S. exchanges.