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As readers of this blog well know, life sciences companies are frequent targets of securities class action lawsuits. Interestingly, at least according to the latest annual report from the Sidley law firm, in recent years the number of lawsuits filed against life sciences companies has declined, although the lawsuit frequency against life sciences companies still remains elevated by comparison to the frequency of litigation against the universe of public companies. Perhaps even more importantly, motions to dismiss in securities lawsuits filed against life sciences companies are granted more than half of the time. A copy of the law firm’s April 2024 memo, entitled “Securities Class Actions in the Life Sciences Sector: 2023 Annual Survey,” can be found here. A two-page summary of the report can be found here.Continue Reading A Detailed Look at the 2023 Securities Litigation Against Life Sciences Companies

The number of securities class action lawsuit filings involving accounting allegations increased in 2023 compared to 2022, but the 2023 accounting-related filings remained below the long-term annual average number of such filings, according to the latest annual report from Cornerstone Research. The number of accounting-related settlements decreased during 2023, as did the median settlement value, though the aggregate and average value of accounting related settlements increased. The Cornerstone Research Report, which is entitled “Accounting Class Action Filings and Settlements: 2023 Review and Analysis,” can be found here. Cornerstone Research’s April 3, 2024, press release about the report can be found here.Continue Reading Cornerstone Research: Accounting-Related Securities Suit Filings Increased in 2023

Readers know that since the initial coronavirus-related outbreak in the U.S. in March 2020, I have been tracking the COVID-related securities suit filings. Even though the four-year mark since the initial outbreak recently passed, and even though it has now been a considerable amount of time since businesses fully reopened from government shutdowns, COVID-related securities suits continue to be filed. Earlier this week, a plaintiff shareholder filed a securities lawsuit against health services management company Agilon Health, in which the plaintiff alleged that the company had understated the impact of the COVID-19 on patient utilization rates, thereby overstating key financial metrics. A copy of the April 2, 2024, complaint can be found here.Continue Reading Health Services Management Company Hit with COVID-19 Related Securities Suit

The number of securities class action lawsuits filed against life sciences companies in 2023 remained steady compared to 2022, as suits against life sciences companies represented almost one in five of the securities class action lawsuits filed during the year, according to a new report from the Dechert law firm. The report, entitled “Dechert Survey: Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies: 2023 Edition,” states that there were a total of 43 securities suits filed against life sciences companies in 2023, the same number as were filed in 2022. The Dechert law firm’s March 27, 2024 press release, which links to the full report,  can be found here.Continue Reading Life Sciences Companies Remained Frequent Securities Suit Targets in 2023

Largely as a result of an influx of new actions in the fiscal fourth quarter, new SEC accounting and auditing enforcement actions increased in FY 2023 (which ended September 30, 2023) according to a new Cornerstone Research report. The number of new accounting and auditing enforcement actions increased by 22% in FY 2023, compared to the 8% increase in the overall number of enforcement actions during the fiscal year. While the number of accounting and auditing enforcement actions increased in FY 2023, aggregate monetary settlements in accounting and enforcement actions decreased 7% during the fiscal year.Continue Reading SEC Accounting and Auditing Enforcement Actions Increased in FY 2023

Yelena Dunaevsky
Teresa Milano

As readers of this blog well know, SPAC transactions have been a frequent target of corporate and securities lawsuits. In the following guest post, Yelena Dunaevsky, Esq., Senior Vice President at Woodruff Sawyer, Executive Editor, SPAC Notebook and Teresa Milano, Esq., Vice President at Woodruff Sawyer, take a detailed look at the SPAC litigation and enforcement activity so far, including some interesting observations about recent trends. A version of this article was previously published on the SPAC Notebook (here). I would like to thank Yelena and Teresa for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.Continue Reading Guest Post: SPACs Poised to Turn a Corner in 2024: Annual Risk Update

   

I think we all recognize that the disruptions from the COVID pandemic continue to reverberate through the economy. Many industries and many companies are still trying to get back to equilibrium. The pandemic continues to impact companies, their operations, and their financial results. A new lawsuit filed against the sporting goods retailer Dick’s Sporting Goods(DSG)  illustrates how the pandemic-related factors continue to affect companies and translate into securities litigation. DSG was one of the companies that prospered at the outset of the pandemic; when conditions normalized, the company claimed it would be able to keep the positive momentum going. However, after the company announced disappointing results, its share price declined, and now a shareholder plaintiff has filed a securities class action lawsuit, in the latest in a series of COVID-related securities suits. A copy of the February 16, 2024, lawsuit against the company can be found here.Continue Reading COVID-Related Results Lead to Securities Suit    

The number of securities class action lawsuit filings increased in 2023 for the first time in four years, according to a new report from NERA. According to the report, the number of filings increased more than 10% in 2023 compared to 2022. On the other hand, the number of cases resolved in 2023 declined during the year. The January 23, 2024 report, entitled “Recent Trends in Securities Class Action Litigation: 2023 Full-Year Review, can be found here.Continue Reading NERA: 2023 Fed Court Securities Suit Filings Increased for the First Time in Four Years

In my recent round-up of the Top D&O stories of 2023, I noted that one of the key drivers contributing to the number of securities class action lawsuit filings last year was the presence of macroeconomic factors affecting company operations and financial results. Among these factors was supply chain disruption. While the pandemic-related disruptions that snarled supply chains in 2021 and 2022 appeared to have eased during 2023, the impact from the earlier supply chain disruptions continues to weigh on some businesses.

 In the latest example of how the prior supply chain disruption continues to affect businesses and how that can translate into securities litigation, on January 16, 2024, a plaintiff shareholder filed a securities lawsuit against advanced driver assistance system company Mobileye Global, after the company announced that it anticipated lower than expected sales of its key product because its leading customers had built up product in 2023 in order to avoid supply disruptions of the type that resulted from supply chain constraints in 2021 and 2022. This latest lawsuit shows how the consequences from pandemic related supply chain disruptions are continuing to weigh on businesses and result in securities litigation. A copy of the January 16, 2024 complaint can be found here.Continue Reading Supply Chain Woes Causing Inventory Build-Up Leads to Securities Suit

According to a new report, the number of excess fee and performance lawsuits filed in 2023 declined relative to the extraordinary filings levels in 2022, but excess fee lawsuit filings remained elevated. By contrast to prior years in which plaintiffs’ lawyers seemingly targeted benefit plans of all sizes, in 2023 the excess benefit plan lawsuits filed in 2023 primarily targeted companies with larger benefit plans. The number and aggregate total value of excess fee lawsuit settlements in 2023 was a record levels during the year. The January 8, 2024, report about the excess fee lawsuit filings, written by Daniel Aronowitz of Euclid Specialty, can be found here.Continue Reading Excess Fee Lawsuit Filings Declined in 2023 Due to Backlog of Prior Cases