In the following guest post, Nessim Mezrahi, takes a look at event analysis, price impact, and damages in securities class action lawsuits. Mezrahi is cofounder and CEO of SAR, a securities class action data analytics and software company. A version of this article previously was published on Law 360. I would like to thank Nessim for allowing me to publish his article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Nessim’s article.
Continue Reading Assessing Securities Class Action Risk with Event Analysis
Securities class action lawsuit filings remained at elevated levels in 2019, but the mix of cases changed during the year, according to the recently published annual report from NERA Economic Consulting. According to the report, which is entitled “Recent Trends in Securities Class Action Litigation: 2019 Full-Year Review,” there were relatively fewer merger objection lawsuits during the year, and relatively more standard securities suits. NERA’s January 21, 2020 press release about the report can be found 
As the various stories and revelations came to light during the peak of the #MeToo movement, there were also a number of D&O lawsuits filed against companies whose executives were the target of the stories. Among these lawsuits was 
On January 6, 2020, solar panel company First Solar announced that it had settled the securities class action lawsuit pending against the company and certain of its executive officers for a payment of $350 million. During the long course of this matter, the case made its way to the Ninth Circuit a couple of times; the case even involved an unsuccessful petition to the U.S. Supreme Court for a writ of certiorari. In addition to its sheer size, there are a number of other interesting aspects to this settlement, as discussed below. The settlement is subject to court approval. The company’s January 6, 2020 press release can be found 
Last August, when prominent litigation funding firm Burford Capital Ltd. was hit with as securities class action lawsuit, I 
The number of federal court securities class action lawsuit filings during 2019 was consistent with the heightened number of filings in each of the two prior years. The total number of suits during 2019 was significantly increased by the number of federal court merger objection lawsuit filings, but even just with respect to the traditional suit filings, the number of securities suit filings in 2019 was well above historical levels. The 2019 federal court securities litigation rate (that is, the number of lawsuits relative to the number of listed companies) was at an all-time high.
In 
On November 21, 2019, when a plaintiff shareholder filed a securities class action lawsuit against Aurora Cannabis, Inc. and certain of its directors and officers, the company became the latest U.S.-listed Canadian cannabis company to be hit with a U.S. securities class action lawsuit. The lawsuit against Aurora came just one day after a different claimant launched a separate U.S. securities lawsuit against another Canadian-based and U.S.-listed cannabis company, Canopy Growth. These two companies join a growing list of cannabis-related firms that have been hit with securities suits this year. As discussed below, these cannabis-related company lawsuits are one of several factors contributed to the continued elevated level of securities class action lawsuit filings in the U.S.
As observers have discussed the kinds of problems that the U.S. Supreme Court’s Cyan decision can create, specific concerns have included the possibility of parallel state and federal court litigation, and even the possibility of parallel litigation in multiple states. In the course of the discussion of these issues, these litigation risks might have seemed merely theoretical. However, a series of lawsuits filed against a recent IPO company show that these kinds of multiple and parallel litigation risks are far from merely theoretical. The raft of jurisdictionally complicated litigation the company now faces shows the extent of the problems that Cyan creates. The company’s situation also underscores the dramatic need for Congress to address revise the securities laws in order to prevent these kinds of situations.