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In recent months, a number of companies have been hit with AI-washing securities class action lawsuits alleging that the defendant companies overstated their AI-related capabilities or opportunities (such as, for example, the securities suit filed late last week against Tempus AI, as discussed here). While there have been quite a number of AI-washing related securities suits, I have long though that the larger and longer-term AI-related securities litigation risk is not as much with respect to allegations that companies overstated their AI capabilities, as from allegations that companies understated their AI-related risks.

In a new securities class action lawsuit that reflects these latter kinds of risk, last week a plaintiff shareholder sued online platform Reddit, alleging that the company misled investors by downplaying the impact on the company’s site traffic and ad revenue from Google’s adoption of artificial intelligence search results. As discussed below, these kinds of AI-risk related allegations could represent a potential new area of AI-related securities litigation risk. A copy of the June 18, 2025, complaint against Reddit can be found here.Continue Reading Reddit Downplayed Impact of Google’s AI-Related Changes, Suit Alleges

In what appears to be one of the largest derivative lawsuit settlements ever, Alphabet, Google’s parent company, has agreed to provide $500 million over ten years to fund the reconstruction of the company’s global compliance structure. The lawsuit and its settlement follow in the wake of extensive federal and state antitrust enforcement activity against the company. The settlement is subject to court approval. A copy of the plaintiffs’ unopposed May 30, 2025, motion for preliminary approval of the settlement can be found here.Continue Reading Alphabet Settles Antitrust-Related Derivative Suit for $500 Million

After the November 2022 debut of ChatGPT, the public commentariat pitched itself into a virtual frenzy declaring AI’s transformative or even catastrophic potential. However, from my perspective, the reality of AI, at least so far, is that, while AI-powered tools are sometimes impressive and occasionally amazing, the AI-generated results are sometimes clunky or non-responsive and often error-filed. I am skeptical of much of the AI hype.

However, over this past weekend, I used a new AI-powered tool that absolutely blew my mind. For the first time ever, I see the sheer raw potential of AI – and yes, I now see its transformative power as well.Continue Reading I Can See the Future. You Can, Too. (Seriously. The Future. Except, You Know, Now.)

In a very interesting June 16, 2021 opinion, the Ninth Circuit has reversed in part the district court’s dismissal of the privacy and cybersecurity-related securities class action lawsuit filed against Google- parent Alphabet, Inc, relating the company’s discovery of and decision not to disclose a software vulnerability that exposed user data of nearly half a million users of the Google+ social media site. The appellate court’s decision, a copy of which can be found here, could represent a significant development in the evolution of cybersecurity and privacy-related securities litigation.
Continue Reading Ninth Circuit in Part Reverses Dismissal of the Google+ User Data Securities Lawsuit

In a derivative lawsuit settlement with one of the highest nominal dollar values ever – and in what is one of the largest #MeToo-related D&O lawsuit settlement ever – Google parent Alphabet has agreed to establish a $310 million diversity, equity, and inclusion fund as part of the settlement of the consolidated derivative litigation relating to the company’s alleged mishandling of sexual harassment allegations against senior executives and the company’s alleged overall culture of sexual discrimination and harassment. The company also agreed to adopt extensive reforms to its employment policies and to implement a number of governance reform measures as part of the settlement. The settlement is subject to court approval.
Continue Reading Alphabet Establishes $310 Million Fund in Google Sexual Misconduct Lawsuit Settlement

In the now more than a year since the #MeToo phenomenon first arose, there have been a number of D&O lawsuits filed against companies and their boards in which the plaintiffs allege that company officials either allowed the alleged sexual misconduct to take place or turned a blind eye. In the latest D&O lawsuits to follow in the wake of allegations of sexual misconduct, two Alphabet shareholders have filed separate derivative lawsuits in California state court against the company’s board based on underlying allegations of alleged sexual misconduct at the company’s Google unit.
Continue Reading Alphabet Board Hit With Derivative Suits Over Alleged Sexual Misconduct at Google

John Reed Stark

Earlier this week, media reports circulated that this past spring Google had exposed the private data of thousands of the Google+ social network users and then opted not to disclose the issue, in part because of concerns that doing so would draw regulatory scrutiny and cause reputational damage. In the wake of these revelations, one question is whether the SEC will look into these circumstances. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at what he regards as a likely SEC investigation and the questions that the SEC likely will be asking. A version of this article originally appeared on Securities Docket. I would like to thank John 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 an article. Here is John’s post.  
Continue Reading Guest Post: Ten Questions the SEC Will Probably Be Asking Google