The number of securities class action filings increased for the second consecutive year in 2024, with artificial intelligence (AI)-related filings more than doubling from the previous year, according to a new report released today by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.
The increase came despite a continued year-over-year decline in federal and state filings with claims under the Securities Act of 1933.
The report, Securities Class Action Filings—2024 Year in Review, found that plaintiffs filed 225 securities class action lawsuits in federal and state courts in 2024, up from 215 filings in 2023. The number of “core” filings—those excluding M&A filings—reached 220, 14% higher than the 1997-2023 historical average of 193.
The number of AI-related filings more than doubled, from seven in 2023 to 15 in 2024. The number of COVID-19-related filings increased by 36% relative to 2023, but remained below the high of 20 in 2022. The number of SPAC and cryptocurrency-related filings fell by more than 50% as compared to 2023. Cybersecurity-related filings also continued to decline.
“In 2024, federal and state 1933 Act filings declined 34% from 2023 and reached the lowest number since 2013,” said Alexander “Sasha” Aganin, the report’s coauthor and a Cornerstone Research senior vice president, who coheads the firm’s finance practice. “Meanwhile, federal Section 10(b)–only filings increased to the highest level on record, the number of AI- and COVID-19-related filings rose, and the total number of overall filings increased.”
Along with an increase in overall filings, the size of core filings, when measured by the Disclosure Dollar Loss Index (DDL Index), rose 23% to $438 billion in 2024, far above the historical annual average of $237 billion. Conversely, the aggregate filing size, as measured by the Maximum Dollar Loss Index (MDL Index), declined to $1.6 trillion in 2024, a 52% drop from $3.3 trillion in 2023. T
Key Trends
- Of the 15 AI-related filings in 2024, eight were in the Technology sector, four were in the Communications sector, two were in the Industrial sector, and one filing was in the Consumer Non-Cyclical sector.
- The number of filings in the Consumer Non-Cyclical sector increased from 54 in 2023 to 67 in 2024, largely driven by an increase in filings against Biotechnology companies in 2024 H2.
- While the likelihood of core filings targeting U.S. exchange-listed companies increased to 3.9% in 2024 from 3.2% in 2023, the probability of an S&P 500 company being the subject of a core federal filing dropped one percentage point to 6.1%.
- The count of mega DDL filings (27) in 2024 was the highest on record, and the total index value of mega DDL filings was the third highest on record.
- For the second year in a row, the number of core federal filings in the Ninth Circuit (69) exceeded those in the Second Circuit (64). The number of core federal filings in the Ninth Circuit was relatively flat compared to 2023, but the number of core federal filings in the Second Circuit increased from 49 to 64.
- The share of core federal filings with Rule 10b-5 claims rose to the highest level in more than five years.
SOURCE: Cornerstone Research
Topics
Lawsuits
Trends
InsurTech
Data Driven
Artificial Intelligence
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