Standard Filings Increased Slightly, Account for Nearly All New Filings
Resolutions on Track to Exceed 2023 Levels
There were 112 new federal securities class action suits filed in the first half of 2024. Of these, 106 were standard cases containing alleged violations of Rule 10b-5, Section 11, and/or Section 12, and 15 standard cases were filed against foreign companies. Filings against companies in the electronic technology and technology services and the health technology and services sectors accounted for 54% of filings, and the Second and Ninth Circuits accounted for approximately 60% of filings. Among filings of standard cases, 38% had an allegation related to missed earnings guidance.
Suits with AI-related claims have begun to be filed, with six such suits seen through June 2024. Crypto- and SPAC-related filings declined relative to 2023, with only three and five suits filed in each category, respectively. On the other hand, cases with COVID-related claims continued to be filed, with eight suits filed through June 2024.
There were 100 cases resolved in the first half of the year, consisting of 52 dismissals and 48 settlements. Assuming resolutions continue at this pace in the second half of 2024, the number of resolved cases would exceed the 190 seen in 2023. Excluding settlements of $1 billion or more, the average settlement value declined by approximately 25% in 2024 H1 from 2023 to $26 million. Similarly, the median settlement value declined by 40% to $9 million. Aggregate settlements totaled $1.2 billion through June 2024, while five large settlements totaling $1.5 billion are set to have their settlement-approval hearings in the second half of the year.
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