Securities Litigation

Subscribe to Securities Litigation via RSS

According to industry reports, education technology companies experienced unprecedented demand during COVID‑19, fueled by remote learning mandates and significant public investment in digital infrastructure. School districts rapidly deployed laptops, software platforms, and immersive learning tools while students were learning remotely. However, now that classrooms have largely returned to in‑person instruction, a growing backlash against ed‑tech has begun to emerge.  In the last month, both the New York Times and Wall Street Journal have reported on the backlash from educators and parents, as well as study results showing the deteriorating effect of technology use in classrooms.

This recent reporting has coincided with certain ed‑tech companies confronting tightening capital markets, operational challenges, and increasing scrutiny from investors and regulators. A complaint filed against zSpace, Inc (zSpace) and its directors and officers on April 23, 2026  (zSpace SCA), may demonstrate how these converging dynamics are now beginning to manifest in securities litigation.  The following will discuss the zSpace SCA allegations, the company’s purported financial pressures, and potential D&O exposure for companies in the ed‑tech industry.

Continue Reading Ed-Tech Backlash and Emerging Securities Litigation Risk

Peloton Interactive, Inc. (Peloton) has faced well-publicized operational and reputational challenges over the past several years. The company’s trajectory, from pandemic-era growth darling to post-pandemic recalibration and product safety scrutiny, has resulted in securities litigation. As previously discussed on the D&O Diary, Peloton successfully defeated a COVID-19-related securities suit at the pleading stage. More recently, the company faced a second securities class action tied to alleged product defects in its flagship bike (Peloton SCA). In a March 31, 2026, decision, the United States District Court for the Eastern District of New York granted Peloton’s motion to dismiss, rejecting plaintiff shareholders’ attempt to convert operational challenges into actionable securities fraud.

Continue Reading Peloton SCA Dismissed: Product Safety Allegations and D&O Exposure

Amid signs of a renewed uptick in SPAC activity, courts continue to grapple with D&O insurance coverage issues arising out of older de-SPAC transactions. In a March 30, 2026,  decision involving the de-SPAC of View Operating Corporation (View), the Delaware Superior Court held, in part, that View’s D&O policy “public offering” exclusion did not apply to preclude coverage for claims arising out of a de‑SPAC transaction and that additional payment conditions could not be imposed unless expressly stated in the policy.

Continue Reading Delaware Court Rejects “Public Offering” Exclusion in De-SPAC Coverage Dispute

A new study highlighted on the Harvard Law School Forum on Corporate Governance, and posted by Subodh Mishra, Global Head of Communications at ISS STOXX, on Tuesday, April 14, 2026, quantifies how cyber incidents can have sustained and measurable negative impacts on shareholder value. The report, based on research conducted by ISS STOXX and ISS-Corporate (the study), analyzed cyber incidents among companies in the Russell 3000 over a multi-year period. Its findings are stark: companies experiencing significant cyber incidents underperform the broader market by approximately 5% on average over a three-year time period. 

Continue Reading Cyber Incidents’ “Long Tail” Impact on Shareholder Value

In February, I noted an emerging securities litigation trend involving pump-and-dump schemes characterized by thin public float, retail investor participation, and the amplifying effects of social media. Three subsequent pump-and-dump securities filings in February and March 2026, along with a recent federal court ruling involving social media platform liability, provide further evidence that these risks may be accelerating. Taken together, these developments have important implications for D&O liability exposure and for underwriters evaluating risks associated with low-float issuers and companies whose securities trading activity may be influenced by online promotional activity.

Continue Reading Follow-On Developments in Pump-and-Dump Litigation

One of the interesting features of the rise of AI has been the advent of “AI-and” businesses – that is, businesses whose strategy is to apply AI tools to traditional business models. When “AI-and” business results fall short, securities litigation has sometimes followed. In the latest example of this kind of litigation, earlier this week a plaintiff shareholder filed a securities suit against Upstart Holdings, a company whose business model involves applying AI tools to traditional credit rating and lending services, after the results from the company’s AI-updated credit rating tool disappointed investors. A copy of the new Upstart Holdings complaint can be found here.

Continue Reading Lending Platform Hit with AI-Related Securities Suit

The recently filed securities class action against Beyond Meat (Beyond Meat SCA) illustrates how accounting judgments, industry-wide demand shifts, and corporate turnaround narratives can create D&O exposure. Filed in January 2026, the complaint alleges that Beyond Meat and senior executives misled investors during 2025 by failing to timely disclose a material asset impairment while publicly emphasizing operational discipline and a path toward EBITDA-positive performance. As discussed below, the allegations arise amid a broader deterioration in the plant-based meat sector, documented in a March 10, 2025, CNBC report, and alongside emerging academic research questioning the assumed health advantages of plant-based meat alternatives.

Taken together with the allegations of the Beyond Meat SCA, the marketplace shift and emerging academic findings may provide a useful lens for assessing certain D&O underwriting risk.

Continue Reading D&O Lessons from the Beyond Meat SCA

In the months since the current Trump administration first announced the so-called “Liberation Day” tariffs, some companies have struggled to deal with the tariffs’ economic impacts, and in at least some cases, companies’ tariff-related problems have led to securities class action litigation (as discussed, most recently, for example, here). In the latest example of this phenomenon, earlier this week the social media company Pinterest was hit with a securities suit after the company announced that tariff-related headwinds had caused its business partners to cut back on advertising on the company’s site. A copy of the March 30, 2026, Pinterest complaint can be found here.

Continue Reading Tariff-Related Securities Suit Hits Social Media Platform Pinterest

Financial news sites were ablaze recently with the news that a co-founder and board member of the data server company Super Micro Computer had been indicted, along with two other company executives, for allegedly conspiring to smuggle high-end Nvidia chips into China, in violation of U.S. export control laws. With news that sensational, and in light of the ensuing stock price drop, it was only a matter of time before plaintiffs’ lawyers would file a securities class action lawsuit. And, sure enough, late last week, a plaintiff shareholder did file a securities suit against the company.

The complaint in the new lawsuit, which can be found here, is interesting in and of itself, relating as it does to the sensational circumstances involved. But the lawsuit is arguably even more interesting for what it represents – that is, as an illustration of the ways that geopolitical issues can – and increasingly are – translating into securities class action lawsuits.

Continue Reading Geopolitics, Export Controls, and D&O Risk

The rise of Artificial Intelligence (AI)-based tools and applications has also meant the rise in AI-related infrastructure, such as data centers and power generation support. And just as we have seen the rise of securities litigation relating to companies’ adoption of AI tools and processes, we have also seen securities suits relating to AI infrastructure development.

In the latest example of this kind of AI infrastructure-related litigation, on March 20, 2026, a plaintiff shareholder filed a securities class action lawsuit against the engine and power systems company Power Solutions International, alleging that the company’s new strategy of providing power generation solutions for AI data centers had fallen short of the company’s representations. A copy of the new complaint against Power Solutions can be found here.

Continue Reading Power Supply Company Hit with AI-Related Securities Suit