Securities Litigation

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Earlier this week, a plaintiff shareholder filed a securities class action lawsuit against ad-buying platform The Trade Desk after the company announced revenues lower than anticipated due to delays in the rollout of the company’s AI-based forecasting tool. As discussed below, this new lawsuit arguably represents a potential new direction in AI-related securities lawsuits. A copy of the February 19, 2025, lawsuit can be found here.Continue Reading Ad Platform Hit with Securities Suit for Alleged Failure to Disclose AI Risk

The global economy is still adapting to the advent of the Artificial Intelligence (AI) era. It remains unclear what AI ultimately will mean for economies and businesses, and many businesses are struggling to adjust in real time. The firms experiencing these struggles also include companies in the business of providing AI products and services. In many cases, these companies’ struggles can translate into securities litigation. A lawsuit filed earlier this week against Netherland-domiciled AI services company Elastic illustrates the ways securities litigation can arise from AI companies’ business struggles. A copy of the February 11, 2025, complaint filed against Elastic can be found here.Continue Reading AI Search Company Hit with Securities Suit   

As I have noted on this site (most recently here), plaintiffs’ lawyers have launched a plethora of lawsuits against companies whose prospects soared during the initial government shut-down phase of the pandemic, but whose fortunes waned as the pandemic moved into the return-to-work phase. While plaintiffs’ lawyers have been quick to file these kinds of pandemic-related suits, the cases have not always fared particularly well.

Last week, in the latest example of one of these kinds of suits stalling at the initial pleading stage, a federal district court granted the defendants’ motion to dismiss – albeit without prejudice – in a pandemic-related lawsuits that had been filed against the portable energy generation company, Generac Holdings. The court’s February 7, 2025, decision, which can be found here, makes for interesting reading and arguably has important implications for other lawsuits of this type.Continue Reading Court Dismisses COVID-19-Related Securities Suit Against Energy Generator Company

In my recent year-end wrap up, I noted that one of last year’s top stories was the rise of artificial intelligence (AI) as a source of corporate and securities litigation risk. Among the evidence reflecting the rise of AI as a source of risk was the onset of securities class action litigation containing AI-related allegations. Last week, in a new lawsuit filing showing that AI-related litigation risks are continuing, a plaintiff shareholder filed a securities suit against a Canadian technology services company whose revenues declined and whose margins shrunk as the company shifted its services to an AI-based model. A copy of the January 30, 2025, complaint against Telus International (CDA) Inc. can be found here.Continue Reading Tech Company Hit with Securities Suit Alleging AI-Related Omissions

We live in a time of significant geopolitical risk, from the highly volatile conditions in the Middle East, to the ongoing war in Ukraine, to continuing tensions in the South China Sea, among many other concerns. These risks of course have important ramifications, including among many other things as a source of potential D&O liability exposure. In prior posts (most recently here), I have highlighted ways that geopolitical issues, such as, for example, trade sanctions, can translate into corporate and securities litigation. In the latest example of this phenomenon, on December 19, 2024, a plaintiff securityholder filed a securities class action lawsuit against Joint Stock Company Kaspi.kz, a Kazakh company whose American Depositary Shares (ADS) trade on Nasdaq. Among other things, the plaintiff alleges that the company misrepresented the extent to which its bank subsidiary was being used for unlawful purposes, including assisting Russians with evading sanctions in the wake of the 2022 Russian invasion of Ukraine. A copy of the December 19, 2024 complaint in the case can be found here.Continue Reading Geopolitical Risk, Trade Sanctions, and D&O Risk Exposure

Liz Dunshee
Nessim Mezrahi

U.S. listed companies must comply with the SEC’s periodic disclosure requirements. The problem for reporting companies is that company disclosures and omissions can become the basis of liability claims and governmental investigations. In the following guest post, Liz Dunshee and Nessim Mezrahi consider the ways that companies can use data analytics to guide their disclosure decisions. Liz is a shareholder at the Fredrikson & Byron law firm and Nessim is co-founder and CEO at SAR LLC. A version of this article previously was published on Law360. I would like to thank Liz and Nessim 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 Liz and Nessim’s article. Continue Reading Guest Post: Using Data to Inform Corporate Disclosure Decisions

The onset of COVID-related securities class action litigation since the initial outbreak of the coronavirus in the U.S. in March 2020 is something that I have fully documented on this site (most recently, for example, here). Even though the coronavirus-outbreak peaked long ago and even though the relevant U.S. agencies officially declared an end to the pandemic health emergency on May 11, 2023, the pandemic’s impact on the U.S. economy continues to reverberate. And the economic disruption the pandemic caused among other things continues to result in securities class action lawsuit filings, even at this late date after the pandemic ended. The latest example of this phenomenon is the lawsuit filed this week against alcoholic beverage company MGP Ingredients, whose fortunes soared during the lockdown but tailed off more recently as the company acknowledged the impact on its sales from pandemic-induced overstocking. A copy of the December 16, 2024, complaint against the company can be found here.Continue Reading Beverage Company Hit with COVID-Related Securities Suit

As I have documented on this site, conservative advocacy and legal groups have been pursuing an aggressive ESG backlash campaign. Among other things, these groups’ efforts have caused several high-profile companies to walk back their DEI initiatives. These groups have also pushed for state-level anti-ESG legislation and have also even pursued anti-ESG litigation. The litigation results have been mixed at best, as noted for example here. However, in the ESG-backlash securities lawsuit filed by a conservative advocacy group against Target in the wake of a consumer boycott following the company’s LGBT “Pride Month” campaign, a federal district court has denied the defendants’ motion to dismiss. As discussed below, there are several interesting features of the court’s ruling. A copy of the Court’s December 4, 2024, opinion can be found here.Continue Reading ESG Backlash Securities Suit Against Target Survives Dismissal Motion

Every participant in the world economy currently faces an environment fraught with geopolitical risk, with a war in the Middle East showing a dangerous potential to expand, a war in Ukraine that continues to flame, tensions in the South China Sea, and many other concerns. While companies’ operating risks in these environments in many cases may seem apparent, it may not always be obvious how geopolitical risks can translate into corporate and securities litigation.  A recent securities class action lawsuit filed against technology company Super Micro Computer provides some insight into these litigation risks. Although the lawsuit involves a host of issues, among the principal concerns are allegations that the company misrepresented its compliance with trade control regulations restricting exports to Russia. These allegations illustrate how trade issues, for example, can contribute to securities litigation activity. A copy of the new complaint in the Super Micro Computer case can be found here.Continue Reading Geopolitics and Securities Litigation Risk

In my recent round-up of the top trends in the world of directors’ and officers’ insurance and liability, I noted that, even though we are now well into the fifth year since the initial outbreak of COVID-19 in the U.S., COVID-related securities suits continue to be filed. In the latest example of this kind of lawsuit, last week a plaintiff investor filed a securities class action lawsuit against customer contact data firm ZoomInfo Technologies, alleging that after COVID-related demand inflated the company’s results during the pandemic, the company allegedly strained to conceal subsequent declining demand from investors. A copy of the September 4, 2024, complaint can be found here.Continue Reading Customer Contact Data Company Hit with COVID-Related Securities Suit