litigation trends

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As The D&O Diary has emphasized in numerous posts in recent months (most recently here), geopolitical issues represent an increasing source of D&O risk. The geopolitical issues include, among other things, sanctions, tariffs, and export controls. Another geopolitical issue that can have an impact on D&O risk is the enforcement of anti-money laundering (AML) laws. In the latest example of AML enforcement translating into D&O risk, in late July a plaintiff shareholder filed a securities class action lawsuit against British money transfer technology company Wise Group, a company whose U.S. bank charter application was denied due to AML concerns. A copy of the July 31, 2026, complaint can be found here.

Continue Reading Anti-Money Laundering Enforcement and Securities Litigation Risk

Artificial intelligence-related securities litigation continues to accelerate, with plaintiffs increasingly targeting not only alleged misstatements about AI products and capabilities, but also companies’ disclosures regarding their investments in AI and the impact of those investments on business operations.  A couple of recently filed lawsuits challenge AI-related spending and capital allocation decisions, which may underscore whether growing investor scrutiny of whether management adequately disclosed the financial risks, costs, and tradeoffs associated with aggressive AI initiatives.

Continue Reading Another AI Spending-Related Securities Class Action

In recent years, the D&O Diary has followed the growing debate over whether companies should reincorporate outside Delaware, particularly in states such as Nevada and Texas.  We have also followed Delaware’s efforts to address the trend through measures including the enactment of SB 21 and the Delaware Supreme Court’s decision upholding the statute.

And we queried whether DExit could prove to be a new source of D&O exposure. A newly amended class action complaint against Dropbox may provide yet another example of that risk, as shareholders are challenging Dropbox’s reincorporation to Nevada, alleging that the move was undertaken to protect management and the controlling stockholder from accountability for underlying business and governance decisions.

Continue Reading Dropbox Derivative Suit Over a DExit

As we have previously noted (most recently, here), geopolitical issues represent an increasingly important source of D&O risk. A lawsuit filed late last week against the fuel cell and power generation firm Bloom Energy highlights this developing source of risk. In the new complaint, a plaintiff shareholder alleges that the company understated its supply chain exposure to China and understated the extent of its reliance on China for a specific rare earth element, scandium. The company’s share price declined after a short seller’s media outlet published a report claiming that the company was, in fact, reliant on Chinese scandium. A copy of the new complaint against Bloom Energy can be found here.

Continue Reading Geopolitical Issues Lead to Securities Suit Against Fuel Cell Company

In its July 29, 2026, report on first half securities class action lawsuit filings (here), Cornerstone Research explained the increased levels of 1H26 securities suit filings as being due in significant part to “a surge in litigation involving artificial intelligence-related claims .” In the latest example of this type of AI-related securities litigation, as well as an example of the kinds of allegations that can lead to these kinds of suits, late last week a plaintiff shareholder sued Israeli cloud web development platform company Wix.com, alleging the company had overstated its AI-related capabilities and prospects, while understating its AI-related costs. A copy of the July 24, 2026 complaint can be found here.

Continue Reading AI-Related Securities Suit Hits Israeli Web Development Platform

D&O Diary readers are aware of a growing trend over the past year: an increasing number of securities class actions arising from alleged market manipulation involving low-float public companies. These cases, ranging from pump-and-dump and spoofing schemes to stock promotion claims, now also include a lawsuit filed this week against Megan Holdings Limited (Megan), whose share price allegedly surged more than 400% in one month before plunging over 93% in a single trading day. The company, headquartered in Malaysia, develops, constructs, and maintains aquaculture farms and related infrastructure. 

Continue Reading Pump-and-Dump Securities Suit Adds to Growing Market Manipulation Litigation Trend

Over the past couple of years, the D&O Diary has followed how geopolitical developments, including wars, sanctions, tariffs, export controls, and trade disputes, can create public company D&O exposure. These developments can present disclosure challenges and have led to securities suits arising from export controls, tariffs, and related business impacts.

A recently filed securities class action against Photronics, Inc. (Photronics) highlights how later statements about geopolitical tensions and supply chain challenges can be woven into broader claims that a company’s earlier disclosures were misleadingly incomplete. Photronics manufactures photomasks, the highly precise templates used in the process to produce semiconductors. While the complaint primarily alleges misstatements about product demand and financial performance, it also cites disclosure failures related to the U.S.-Iran conflict and supply chain disruptions.

Continue Reading What Constitutes Geopolitical Disclosure Risk?

One of the questions that has accompanied the Securities and Exchange Commission’s changing approach to digital asset regulation is whether a decline in enforcement activity would lead to an increase private plaintiff litigation against cryptocurrency and crypto-adjacent companies.  A July 7, 2026, report by NERA Economic Consulting (NERA) suggests the answer may be more nuanced. While, according to NERA’s analysis, private securities litigation has become a larger share of crypto-related litigation, it has not fully replaced the reduction in SEC enforcement actions.  The changing nature of crypto-related claims could have a significant impact on D&O underwriters operating in the sector. The NERA report provides a useful framework for evaluating the D&O implications of these developments.

A link to the NERA report published by Simona Mola, Ph.D. can be found here.

Continue Reading Crypto D&O Risk Is Evolving

A securities class action filed against ZoomInfo Technologies, Inc. and certain of its directors and officers on June 25, 2026, highlights what may be the next phase of AI-related securities litigation. Unlike many earlier AI-related lawsuits, which alleged that companies overstated their AI capabilities, the Zoom complaint alleges that the company accurately described its AI initiatives but failed to disclose that AI was simultaneously disrupting its legacy business model.

If this theory gains traction, it could represent another evolution in AI-related securities litigation: from alleged AI washing to alleged underdisclosure of AI-related business risks.

Continue Reading AI-Related Securities Litigation Continues to Evolve

The third episode of The D&O Diary Podcast Series is now live. Building on our June 30, 2026, post discussing first-half federal court securities class action lawsuits, this episode explores the factors and  trends driving the number of current suit filings.

In this podcast, we discuss the overall increase in the total number of federal court securities suits during the first six months of 2026; the continued emergence of AI-related securities litigation; and the significant role that stock manipulation and promotion-related claims in the number of securities suits that have been filed so far this year. We also examine what these developments may mean for public companies, directors and officers, and D&O insurers in the months ahead.

Continue Reading The D&O Diary Podcast Series – Episode 3: Securities Class Action Suit Filing Trends