This is an excerpt from Securities Class Action Filings 2024 Midyear Assessment
COVID-19-related filings are on pace to increase by 27% in 2024. The number of cryptocurrency-related filings in 2024 H1 (three) was in line with 2023 H2 (three) but down sharply relative to 2023 H1 (11). SPAC-related filings are also on pace to decline steeply relative to recent years. A new trend category tracking AI-related filings is included in this report.
Trend Filings
- There were five AI-related filings in 2020, eight in 2021, six in 2022, six in 2023, and six in 2024 H1. (page 5)
- The trend categories with the most filings in 2024 H1 were COVID-19 (seven), followed by AI (six), SPAC (five), and Cryptocurrency (three). (page 5)
- The number of filings in the SPAC trend category (five) declined sharply in 2024 H1 and is on track to be less than half the number of SPAC filings in 2023 (25). (page 5)
- There have been no new filings in the 2023 Banking Turbulence trend category since 2023 H2, possibly reflecting increased stability in the banking sector. (page 5)
- The number of cryptocurrency-related filings in 2024 H1 (three) was in line with 2023 H2 (three) but down sharply relative to 2023 H1 (11). (page 5)
M&A and Section 11 Filings
- In 2024 H1, there were two federal M&A filings which, if annualized, would be only 2% of the peak in 2017 (198 filings). (page 3)
- The number of 1933 Act filings in state courts remained low in 2024 H1, with the number of filings increasing relative to the one filing observed in 2023 H2, but in line with the number of filings in 2023 H1. (page 10)
Dollar Loss on Offered Shares Index™ (DLOS Index™
- Federal DLOS in 2024 H1 has remained at historically low levels, and DLOS in state courts is on pace to be the lowest since 2014. (page 11)
- Annualized DLOS in state courts in 2024 is on pace to be 77% lower than DLOS in state courts in 2023. (page 11)
U.S. Exchange-Listed Companies
- In 2024 H1, 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% and surpass the 2010–2023 average of 3.6% for core filings. (page 9)
Non-U.S. Issuers
- Core federal filings against non-U.S. issuers as a percentage of total core federal filings in 2024 H1 (12%) declined by nearly a quarter relative to 2023 (16%), reaching a 15-year low. (page 14)
- There were 13 core federal filings against non-U.S. issuers in 2024 H1. The annualized number of core federal filings against non-U.S. issuers in 2024 is below the previous 10 years. (page 14)
By Industry
- The number of filings in the Communications sector rebounded, nearly doubling in 2024 H1 relative to the number in 2023 H2. (page 15)
- Almost a third of all filings in 2024 H1 were in the Consumer Non-Cyclical sector. (page 15)
- DDL from Technology sector filings comprised 22% of total DDL, lower than the percentage in 2023 H2 (42%), but above the historical semiannual average (16%). (pages 15, 25)
By Circuit
- DDL in the Ninth Circuit more than tripled relative to 2023 H2, while DDL in the Second Circuit decreased by 84%. (pages 16, 25)
- Although the number of core filings in the Second Circuit in 2024 H1 (26) was slightly above the number from 2023 H2 (24), DDL in the Second Circuit dropped from $75 billion in 2023 H2 to $12 billion in 2024 H1 and was 65% below the historical semiannual average. (pages 16, 25)
The views expressed herein are solely those of the authors and do not necessarily represent the views of Cornerstone Research.
