Securities Litigation

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According to the latest annual report from NERA, and based on NERA’s inclusive counting methodology, the number of federal securities class action lawsuits was flat in 2024 relative to 2023, but the number of “traditional” securities class action suits increased in 2024 for the second year in a row. In addition, the number of case resolutions (including both settlements and dismissals), increased in 2024, reversing a six-year decline in the number of resolutions. NERA’s January 22, 2025 report entitled “Recent Trends in Securities Class Action Litigation: 2024 Full-Year Review,” can be found here.Continue Reading NERA Reports Securities Suit Filings Level, Dismissals Increased in 2024

After the 2021 peak of the SPAC IPO frenzy, many SPACs wound up liquidating, while another significant tranche of the SPACs (or the SPACs post-merger successor companies) wound up in litigation. The post-frenzy glut of SPAC-related lawsuits has since been making its way through the courts ever since, and some have made it to the settlement stage. In recent days, the parties to two of these SPAC-related lawsuits have reached noteworthy settlements. As discussed below, the two settlements – the Alta Mesa SPAC-related lawsuit settled for $126.3 million and the Grab Holdings SPAC-related lawsuit settled for $80 million – are among the largest ever SPAC-related lawsuit settlements and could potentially set standards for future SPAC lawsuit settlements. The two settlements are subject to court approval.Continue Reading Record-Setting Settlements in Two SPAC-Related Securities Suits

In prior posts, I have noted the phenomenon of securities class action lawsuit filings following in the wake of antitrust enforcement actions (most recently here). A new securities lawsuit filed just before year-end presents an interesting new variation on this sequence. The new lawsuit, filed against both Capri Holdings Limited and Tapestry, Inc., two high-fashion firms, and certain of their executives, relates back to an enforcement action the FTC filed against the firms to block their plans to merge. As discussed below, the lawsuit involves several interesting features. A copy of the plaintiff’s December 23, 2024, complaint can be found here.Continue Reading Securities Suit Follows After Antitrust Ruling Bars Firms’ Merger Plans

The number of federal court securities class action lawsuit filings increased in 2024 for the second year in a row, to the highest level since 2020. The increased number of federal court securities suit filings during the past year is due to several factors, including continuing filings relating to ongoing trends such as new lawsuit filings relating to SPACs, COVID-related suits, and cryptocurrencies, as discussed further below.Continue Reading Federal Court Securities Class Action Lawsuit Filings Increased in 2024

At the outset of the current U.S. Supreme Court term, corporate and securities law observers and commentators were excited that the Court had agreed to take up two securities law cases that had significant potential to provide insights about securities lawsuit pleading standards and processes. However, as noted here, in November, the court dismissed…

The current Supreme Court term promised to be an interesting one from a securities law standpoint, as the Court had agreed to take up two cases dealing with key securities class action litigation issues. One of those cases is the securities case involving the Facebook/Cambridge Analytica’s user data scandal. The Facebook case would have required the Court to address an important and recurring disclosure related issue. However, on November 22, 2024, the Court issued a single-line order stating that “the writ of certiorari is dismissed as improvidently granted,” meaning that the Supreme Court’s consideration of the Facebook case will now not go forward, and the Ninth Circuit’s ruling in the case, in which the appellate court reversed in part the district court’s dismissal of the case, will now stand. A copy of the Supreme Court’s November 22, 2024, order can be found here.Continue Reading U.S. Supreme Court Dismisses Facebook Case, Saying Writ Improvidently Granted

As I have previously noted on this site (for example, here), a long-standing and frequently recurring litigation pattern has been the filing of a corporate or securities lawsuit in the wake of an antitrust enforcement action. In the latest example of this pattern, the card payment processing company Visa has been hit with a securities class action lawsuit after the DOJ launched an antitrust enforcement action against the company in September. There are several interesting features to this new lawsuit, as discussed below. The November 20, 2024, complaint against Visa can be found here.Continue Reading Antitrust Enforcement Action Against VISA Leads to Follow-On Securities Suit

One of the more interesting developments in the securities litigation arena over the past several years has been the continuing influx of pandemic-related securities class action lawsuit filings. Here we are now approaching what will be the sixth year since the initial outbreak of COVID-19 in the U.S. and yet the pandemic-related suits are continuing to come in. In the latest example, last week a shareholder plaintiff filed a securities class action lawsuit against the toy company Hasbro, alleging that the company misled investors by claiming that the level of inventory it built up in response to pandemic lockdown-related consumer demand was appropriate, only to later announce it would have to incur substantial inventory reduction costs. A copy of the November 13, 2024, complaint against Hasbro can be found here.Continue Reading Toy Company Hit with Pandemic-Related Securities Suit

It is now well-recognized, as Bloomberg columnist Matt Levine has famously said, that “Everything Everywhere is securities fraud.” Just the same, it does come as a surprise sometimes to see the things that make their way into securities class action lawsuit complaints. In the latest example of this phenomenon at work, a plaintiff shareholder has filed a securities class action lawsuit against the restaurant company Chipotle Mexican Grill, as a result of a social media campaign raising questions about the chain’s meal portions. To combat the social media chatter, the company concentrated on providing generous portions, which cut into the company’s margins – and drew a securities lawsuit. A copy of the November 11, 2024, complaint in the suit can be found here.Continue Reading Social Media Squabble Over Restaurant Portions Begets Securities Suit

Short sellers have a complicated relationship to securities class action litigation, as several prior posts on this site have noted (most recently here). Among the more unusual roles short sellers can play in a securities suit is to serve as lead plaintiff. One recent high-profile case where a short seller acted as lead plaintiff is the suit filed against Overstock, its founder and former CEO, Patrick Byrne, and other executives. The short seller alleged, with some plausibility, that Overstock and Byrne had attempted to mount a “short squeeze” targeted at the short sellers. The district court granted the defendants’ motion to dismiss, and in an interesting October 15, 2024, opinion, the Tenth Circuit affirmed the district court. The appellate court’s opinion has several interesting features, as discussed below.Continue Reading Tenth Circuit Affirms Dismissal of Short Seller’s Securities Suit Against Overstock