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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

Last week, when I wrote about two recent AI-related SEC enforcement actions, I noted that the SEC’s public statements when it announced the enforcement action settlements not only underscored the SEC’s AI-related concerns but also illustrated the kinds of issues that could lead to private securities litigation brought by investors who claim they were misled by companies’ AI-related disclosures. In the latest example showing how company disclosures relating to artificial intelligence can lead to securities litigation, a plaintiff shareholder has filed a securities suit against a security screening company alleging that the company’s public statements about its AI-enabled products and services were misleading. A copy of the March 25, 2024, complaint can be found here.Continue Reading Security Screening Company Hit with AI-Related Securities Suit

SPACs were back in the business headlines again last Friday, as the news circulated that shareholders of Digital World Acquisition Corp., a special purpose acquisition company, had approved the proposed business combination with Trump Media & Technology Group, the corporate parent of Truth Social, Donald Trump’s social media company. On the same day, in a reminder of what has happened to all too many companies that merged with SPACs during the peak of the SPAC frenzy in 2020 and 2021, shareholders of a SPAC that merged with an electric vehicle company sued the directors and officers of the SPAC as well as the EV company, alleging that in the merger proxy statement the defendants failed to disclose multiple business problems at the target company. The lawsuit is the latest SPAC-related securities suit to be filed after the collapse of the SPAC surge.Continue Reading EV Company Hit With SPAC-Related Securities Suit

As readers know, in recent years I have been tracking two securities class action litigation filing trends:  the filing of SPAC-related lawsuits, and the filing of COVID-related lawsuits. In a noteworthy development, a securities suit filed last week embodies both of these filing trends. That is, a company that was formed through a SPAC merger has been hit with a securities suit based on COVID-related allegations. As discussed below, the new lawsuit has several interesting features. A copy of the February 28, 2024, complaint can be found here.Continue Reading Two-Fer: SPAC-Merged Company Hit With COVID-Related Securities Suit        

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

In any discussion these days of emerging directors’ and officers’ risks, the conversation inevitably turns to the topic of Artificial Intelligence (AI). There is a general perception that while AI presents significant opportunities, it also involves significant liability risks. The contours of the risk that AI represents have yet to develop, largely because the claims have yet to emerge. That is, until now.

Earlier this week, a plaintiff shareholder filed a securities class action lawsuit against the AI-enabled software platform company, Innodata. The plaintiff claims the company misrepresented the extent to which the company’s products and services actually employ AI technology and also the extent of the company’s investment in AI. As discussed further below, as far as I know, this case represents the first AI-related securities class action lawsuit to be filed. A copy of the plaintiff’s February 21, 2024, complaint can be found here.Continue Reading First AI-Related Securities Suit Filed

   

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    

Three of the five largest bank failures in U.S. history took place over the course of just a few weeks last Spring. Because U.S. government officials acted forcefully at the time, this dangerous sequence did not trigger a contagion event across the banking sector generally. But while the Fed and others managed to stave off further bank failures, underlying problems persisted at certain banks – in particular, problems relating to the commercial real estate sector continued to weigh on banking institutions. As the Wall Street Journal put it in an article late last week, “Investors have wondered when the pain from the downturn in commercial property would hit banks.” As the Journal noted in the same article, the commercial property-related pain has now arrived for some banks. Several banks, including New York Community Bancorp (NYCB), suffered significant stock price drops after the banks last week announced steep increases in their loss reserves in their commercial real estate portfolios.

And now these developments have translated into securities litigation, as a plaintiff shareholder has launched a securities class action lawsuit against NYCB and certain of its executives. These developments and the filing of the lawsuit suggest while the Banking Crisis of 2023 may have been contained, continuing problems in the banking sector could be a factor in the number of securities class action lawsuit filings during the year. A copy of the February 6, 2024 complaint filed against NYCB can be found here.Continue Reading Commercial Real Estate Woes Weigh on Bank, Lead to New 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

A few days ago when I published a post discussing a new COVID-19-related securities lawsuit I expressed my surprise that pandemic-related suits were still being filed in 2024, particularly after the pace of new coronavirus-related suits tailed off completely in the latter half of 2023. Well, it appears that the recent new case filing not just a single anomaly, as this past week yet another new pandemic-related securities lawsuit was filed.

On January 19, 2024, a plaintiff shareholder filed a securities suit against BioVie, a developmental stage biotech company, after the company reported that clinical trials for its Phase 3 drug candidate produced results the company concluded deviated from protocols and Good Clinical Practice (GCP) because the pandemic had limited patient access to clinical trial sites. A copy of the new complaint can be found here.Continue Reading Biotech Hit with Securities Suit After Pandemic Impact on Clinical Trials