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In the latest AI-washing related securities class action lawsuit to be filed, a plaintiff shareholder has filed a securities suit against AI-based health care company Tempus AI, alleging, among other things, that the company overstated its AI capabilities. The lawsuit comes after the company’s share price declined following the publication of a short seller report critical of the company and its management. A copy of the June 12, 2025, complaint against Tempus AI can be found here.Continue Reading AI-Washing Securities Suit Filed Against Tempus AI

As I have noted in prior posts (most recently here), courts have over time evinced a continuing skepticism of securities class action lawsuit allegations based on short-seller reports. The short sellers’ financial incentives and their reliance on anonymous sources have caused courts to be wary of securities suit allegations based on their reports. In a recent Fourth Circuit decision in a case in which the plaintiffs’ allegations were largely relied on a short-seller’s report, the appellate court affirmed the district court’s dismissal of the case, based on the plaintiffs’ failure to adequately allege loss causation. The court’s opinion provides several interesting observations about securities suit allegations based on short sellers’ reports.Continue Reading 4th Circ.: Short Seller Report’s Allegations Insufficient to Establish Loss Causation

As I have previously noted on this site (for example, here), a long-standing and frequently recurring litigation pattern has been the filing of a corporate or securities lawsuit in the wake of an antitrust enforcement action. In the latest example of this pattern, a plaintiff shareholder has alleged that Atkore, a PVC pipe manufacturer, misled investors by failing to disclose that its product pricing was being propped up by an alleged scheme with its competitors to fix prices. The securities suit filing follows a prior civil antitrust action against the company and its competitors. The securities suit, which in addition to representing an example of antitrust follow-on securities litigation, is also an example of a lawsuit arising out of a company’s post-COVID business operations. A copy of the February 21, 2025, complaint can be found here.Continue Reading Antitrust Allegations Lead to Securities Suit Against PVC Pipe Company

Short sellers have a complicated relationship to securities class action litigation, as several prior posts on this site have noted (most recently here). Among the more unusual roles short sellers can play in a securities suit is to serve as lead plaintiff. One recent high-profile case where a short seller acted as lead plaintiff is the suit filed against Overstock, its founder and former CEO, Patrick Byrne, and other executives. The short seller alleged, with some plausibility, that Overstock and Byrne had attempted to mount a “short squeeze” targeted at the short sellers. The district court granted the defendants’ motion to dismiss, and in an interesting October 15, 2024, opinion, the Tenth Circuit affirmed the district court. The appellate court’s opinion has several interesting features, as discussed below.Continue Reading Tenth Circuit Affirms Dismissal of Short Seller’s Securities Suit Against Overstock

Artificial Intelligence (AI) has for months been the hot story in the securities marketplace, with share prices of companies with AI connections soaring. In a new lawsuit with several unusual twists, short sellers have filed a securities class action lawsuit company against electronic component power company Vicor Corporation, alleging that the company misleadingly suggested that it had entered a substantial contract with an existing customer for delivery in an AI power platform. The company’s share price surged, and the short sellers were forced to cover their positions at a significant loss. When the company allegedly later tried to walk back the story about the supposed significant customer contract, its share price plunged. The claimants seek to recover damages on behalf of similarly situated short sellers. A copy of the plaintiffs’ July 11, 2024, complaint can be found here.Continue Reading Short Sellers File AI-Related Securities Suit Against Electronic Power Company