Tracking of artificial intelligence–related filings began while
the number of cryptocurrency-related filings
declined.
MENLO
PARK, Calif., July 31,
2024 /PRNewswire-PRWeb/ -- The number of
securities class action filings increased in the first half of 2024
relative to the second half of 2023, according to a report released
today by Cornerstone Research and the Stanford Law School
Securities Class Action Clearinghouse.
The report, Securities Class Action Filings—2024 Midyear
Assessment, found that plaintiffs filed 112 securities class
actions in federal and state courts in the first half of 2024, an
increase from the 103 class actions filed in the second half of
2023. The number of core filings—those without merger and
acquisition (M&A) allegations—in 2024 H1 (110) was above the
number of core filings in 2023 H2 (101) and the historical
semiannual average (96). Tracking of the Artificial Intelligence
(AI) trend category began; there were six such filings in the first
half of 2024. The number of filings in all other trend
categories—including Cryptocurrency—is on pace to
decline in 2024, except for COVID-19-related filings, which are on
pace to increase.
"While we've seen AI-related filings in recent years, the first
half of 2024 marks the beginning of
tracking these filings as a trend category. The growing prominence
of AI in the business models of many companies may lead to more
filings in the future," said Alexander "Sasha" Aganin, the report's
coauthor and a Cornerstone Research senior vice president.
"Meanwhile, SPAC-related filings are on pace to decline steeply
relative to recent years, and cryptocurrency-related
filings, which have been hot for the past several years,
experienced a sharp decline."
The number of filings with federal Section 11 and state claims
under the Securities Act of 1933 remained low in the first half of
2024. The annualized number of these filings, 22, is in line with
the number of filings, 21, in 2023. There were two federal M&A
filings, on pace to be the lowest annual total since tracking of
federal M&A filings began in 2009.
The Maximum Dollar Loss (MDL) Index™ decreased 9% to
$908 billion in the first half of
2024, a continuing decline from the inflation-adjusted record high
set in the first half of 2023 but remaining 51% above the
historical semiannual average. The Disclosure Dollar Loss (DDL)
Index™ increased to $185 billion in
2024 H1, a 9% increase from 2023 H2 and the sixth consecutive
semiannual period with DDL at or above the historical semiannual
average of $119 billion.
"The potential for real liability resulting from artificial
intelligence is among the more interesting developments of the past
six months," according to former SEC Commissioner Joseph Grundfest, now professor emeritus at
Stanford Law School. "But more immediately, keep an eye on the
upcoming Supreme Court term. Important decisions will issue in the
NVIDIA litigation regarding pleading requirements for securities
fraud claims, and in the Facebook/Cambridge Analytica
litigation involving risk factor disclosure."
Additional Key Trends
- The likelihood of a core filing against a U.S. exchange-listed
company is on pace to increase to an annualized rate of 3.9%,
surpassing the 2010–2023 average of 3.6% for core filings.
- In the first half of 2024, there were 10 mega DDL filings
(those with a DDL of at least $5
billion), twice the 1997–2023 semiannual average (five) and
slightly above the number of mega DDL filings in 2023 H2
(eight).
- The number of core federal filings in the Second and Ninth
Circuits increased and comprised 60% of the total number of core
federal filings in 2024 H1. DDL in the Ninth Circuit more than
tripled relative to 2023 H2, while DDL in the Second Circuit
decreased by 84%.
- Core federal filings against non-U.S. issuers as a percentage
of total core federal filings in 2024 H1 declined by nearly a
quarter relative to 2023, reaching a 15-year low.
About Cornerstone Research
Cornerstone Research provides economic and financial consulting and
expert testimony in all phases of complex disputes and regulatory
investigations. The firm works with an extensive network of
prominent academics and industry practitioners to identify the
best-qualified expert for each assignment. With a reputation for
high quality and effectiveness, Cornerstone Research has
consistently delivered rigorous, state-of-the-art analysis since
1989. The firm has more than 1,000 professionals in nine offices
across the United States, UK, and
EU.
About the Stanford Law School Securities Class Action
Clearinghouse
The Securities Class Action Clearinghouse is an authoritative
source of data and analysis on the financial and economic
characteristics of federal securities fraud class
action litigation. The SCAC maintains a database of more than 6,600
securities class action lawsuits filed since the passage of the
Private Securities Litigation Reform Act of 1995. The database also
contains copies of complaints, briefs, filings, and other
litigation-related materials filed in these cases.
Media Contact
Molly McDonough, Cornerstone
Research, 312-345-7606, molly.mcdonough@cornerstone.com,
https://www.cornerstone.com/
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SOURCE Cornerstone Research