The D&O Diary has been chronicling how securities plaintiffs continue to expand litigation theories beyond traditional “AI-washing” claims. The recent securities class action against data protection company Commvault Systems, Inc. demonstrates how AI hype and strategy can become entangled with traditional securities claims, even when actual AI integration is not the central issue of the lawsuit.
Continue Reading AI-Adjacent Securities Litigation
For several years, cybersecurity has been a perennial D&O liability issue. Although there has never quite been the volume of cybersecurity-related D&O litigation that some anticipated, cybersecurity-related D&O claims do continue to arise. In the latest example, last week a plaintiff shareholder filed a securities suit against cloud data storage company Snowflake, alleging, among many other things, that the company failed to disclose shortcomings in its customer data security arrangements that allegedly allowed key customers to experience a data breach. There are a number of noteworthy aspects of this new complaint and its cybersecurity-related allegations, as discussed below. A copy of the plaintiff’s complaint can be found here.
Continue Reading Cybersecurity-Related Securities Suit Hits Cloud Data Storage Company
Those who observe securities class action litigation filing patterns know that life sciences companies are frequent securities litigation targets. Though the number of securities suit filings against life sciences companies fluctuates from year to year, more recently the number of life sciences company filings has stabilized at higher levels, according to the latest annual report from the Sidley law firm. A copy of the law firm’s recent memo, entitled “Securities Class Actions in the Life Sciences Sector: 2025 Annual Survey,” can be found here. A two-page summary of the report can be found here.
Continue Reading A Detailed Look at the 2025 Securities Litigation Against Life Sciences Companies
It is a well-established fact that securities class action lawsuits rarely go to trial. In most cases, the lawsuits are either dismissed or settled. However, there has been an interesting recent uptick in the number of securities suits going all the way to a jury verdict. In the latest example of this development, on May 14, 2026, a federal court jury entered a defense verdict following trial in the long-running ExxonMobil securities class action lawsuit. As discussed below, this verdict is the latest of several post-trial verdicts entered in securities suits this year. A May 14, 2026, Law360 article about the verdict can be found here.
Continue Reading Rare Securities Suit Trial Results in Defense Verdict in ExxonMobil Case
The recent securities and derivative litigation involving e.l.f. Beauty reflects a familiar D&O liability pattern: a high-growth narrative challenged by operational headwinds, followed by securities litigation and a derivative action. While e.l.f. and its D&Os achieved meaningful success at the motion to dismiss stage, the survival of certain securities claims and a recently filed a derivative complaint in Delaware highlights the potential of prolonged D&O exposure.
Continue Reading Securities Suit Partially Survives; Derivative Action Follows and Prolonged D&O Exposure
According to industry reports, education technology companies experienced unprecedented demand during COVID‑19, fueled by remote learning mandates and significant public investment in digital infrastructure. School districts rapidly deployed laptops, software platforms, and immersive learning tools while students were learning remotely. However, now that classrooms have largely returned to in‑person instruction, a growing backlash against ed‑tech has begun to emerge. In the last month, both the New York Times and Wall Street Journal have reported on the backlash from educators and parents, as well as study results showing the deteriorating effect of technology use in classrooms.
This recent reporting has coincided with certain ed‑tech companies confronting tightening capital markets, operational challenges, and increasing scrutiny from investors and regulators. A complaint filed against zSpace, Inc (zSpace) and its directors and officers on April 23, 2026 (zSpace SCA), may demonstrate how these converging dynamics are now beginning to manifest in securities litigation. The following will discuss the zSpace SCA allegations, the company’s purported financial pressures, and potential D&O exposure for companies in the ed‑tech industry.
Continue Reading Ed-Tech Backlash and Emerging Securities Litigation Risk
In a rare trial in a securities class action lawsuit, a federal jury has ruled that hedge fund Armistice Capital and certain of its executives had not, as the plaintiffs alleged, committed insider trading or engaged in a pump-and-dump scheme in selling over $200 million in vaccine company Vaxart stock during the COVID-19 pandemic. The jury specifically held that the plaintiffs had not proven that the defendants had engaged in a scheme to defraud and had not proven their insider trading allegations.
Continue Reading Rare Securities Class Action Lawsuit Trial Results in Defense Verdict
Peloton Interactive, Inc. (Peloton) has faced well-publicized operational and reputational challenges over the past several years. The company’s trajectory, from pandemic-era growth darling to post-pandemic recalibration and product safety scrutiny, has resulted in securities litigation. As previously discussed on the D&O Diary, Peloton successfully defeated a COVID-19-related securities suit at the pleading stage. More recently, the company faced a second securities class action tied to alleged product defects in its flagship bike (Peloton SCA). In a March 31, 2026, decision, the United States District Court for the Eastern District of New York granted Peloton’s motion to dismiss, rejecting plaintiff shareholders’ attempt to convert operational challenges into actionable securities fraud.
Continue Reading Peloton SCA Dismissed: Product Safety Allegations and D&O Exposure
The following guest post examines the resolution of class certification motions in securities class action lawsuits during 2025; considers the parties’ economic arguments in support of or in opposition to class certification; and analyzes the courts evaluation of those arguments. The article is written by Andrew Roper, Mame Maloney, Brendan Rudolph, and Ravi Sinha, Principals at The Brattle Group, and Aidan Kutner, an Associate at The Brattle Group. We would like to thank the authors for allowing us to publish their article as a guest post on our site. Here is the authors’ article.
Continue Reading Guest Post: Key Trends in 2025 Class Certification Decisions: Fraud-on-the-Market Under FireIn February, I noted an emerging securities litigation trend involving pump-and-dump schemes characterized by thin public float, retail investor participation, and the amplifying effects of social media. Three subsequent pump-and-dump securities filings in February and March 2026, along with a recent federal court ruling involving social media platform liability, provide further evidence that these risks may be accelerating. Taken together, these developments have important implications for D&O liability exposure and for underwriters evaluating risks associated with low-float issuers and companies whose securities trading activity may be influenced by online promotional activity.
Continue Reading Follow-On Developments in Pump-and-Dump Litigation