Recent Trends in Securities Class Action Litigation

According to National Economic Research Associates’ 2024 Securities Class Action Litigation report, there were 229 federal securities class action suits filed in 2024, equaling the total number of filings in 2023. Standard cases, containing Rule 10b-5, Section 11, and/or Section 12 claims, increased for a second straight year, 20% relative to 2022, with 214 filings, and accounted for over 93% of all filings in 2024.  Of these, Rule 10b-5 only claims continue to make up the majority of standard cases with 198 filings, an increase of 8% relative to 2023 and 46% since 2022, marking a 10-year high. By contrast, there were only 16 standard cases with Section 11 and/or Section 12 claims (with or without an accompanying Rule 10b-5 claim), a 62% decline relative to 2022, the lowest number of such filings over the past decade. This is due to the slowdown in U.S. IPO activity in recent years, with the number of IPOs declining from 1,035 in 2021 to approximately 225 per year over 2022–2024.  Filings involving merger objections and unregistered crypto securities continue to decline, with only five suits filed in each category.

The technology and healthcare sectors comprised 56% of filings in 2024, up from 41% in 2023. The percentage of suits in the finance sector declined by nearly half to 10%, partially due to a decline in filings in the banking sector. Elsewhere, the consumer sector accounted for 8% of filings, roughly in line with recent years.

Among filings of standard cases, 41% included claims related to missed earnings guidance. The percentage of standard cases containing claims related to accounting issues declined by over one-third to 13%. The percentage of standard cases containing claims related to merger-integration issues continued to decline by over one-quarter to 8%, partially driven by a decline in SPAC-related filings.

Suits with AI-related claims more than doubled relative to 2023, with 13 such suits filed in 2024. Nineteen cases with COVID-related claims were filed in 2024, a 46% increase from 2023. By contrast, crypto- and SPAC-related filings continue to decline, with only eight and nine suits filed in each category, respectively.

There were 36 standard suits filed against foreign companies in 2024, a 5% decline from 2023, when 38 such suits were filed. The number of filings against companies based in Europe has steadily grown over the past three years, going from nine cases in 2021 to 17 cases in 2024. By contrast, suits against companies based in China or Hong Kong declined from 24 in 2021 to four in 2024—an 83% decrease over the same three-year period.

From 2017 to 2023, there was a decline in the number of resolved federal securities class action cases. This six-year decline ended in 2024, when the number of resolutions increased by 17% from 186 in 2023 to 217 in 2024. Of these resolved cases, 93 were settlements and 124 were dismissals. For cases settled between 2015 and 2021, the median time from filing to resolution was relatively stable at around 3.0 years. While the median time to settlement notably increased to 3.9 years in 2023, it declined to 3.2 years in 2024.

In 2024, aggregate settlements totaled $3.8 billion. While there was a $1 billion settlement with Wells Fargo in 2023, there were no settlements of $1 billion or higher in 2024. The 10 largest settlements in 2024 ranged from $85 million to $490 million and collectively accounted for 60% of the $3.8 billion aggregate settlement amount. There were four settlements of at least $200 million, which include suits against Uber ($200 million) over alleged misrepresentations in connection with its initial public offering, Google ($350 million) in a case involving a data privacy breach, Under Armour ($434 million) over claims the company hid declining demand of its products, and Apple ($490 million) in a matter over alleged misrepresentations involving iPhone sales in China.

Around 42% of settlements had a recovery of less than $10 million, another 40% had a settlement between $10 million and $49.9 million, and 18% settled for $50 million or more, largely mirroring the distribution of settlement values from 2023. The average settlement value was $43 million, a roughly 7% decline relative to the 2023 inflation-adjusted average settlement value of $46 million.

In the past decade, annual aggregate plaintiffs’ attorneys’ fees and expenses have ranged from $504 million to $1.6 billion. In 2024, aggregate plaintiffs’ attorneys’ fees and expenses totaled $1.06 billion, nearly $90 million more compared with $974 million in 2023. Plaintiffs’ attorneys’ fees and expenses comprised approximately 27.3% of the $3.8 billion aggregate settlement amount.