Securities class action filings increase slightly in 2024

Securities class action filings experienced a slight uptick in 2024, with significant growth in cases linked to artificial intelligence (AI) and COVID-19, as per a study carried out by Cornerstone Research and Stanford Law School Securities Class Action Clearinghouse. The total number of state and federal securities class action filings in 2024 rose to 225, a slight increase from 215 in 2023 and 208 in 2022. The number of “core” filings, excluding mergers & acquisitions-related claims, reached 220, a jump from 209 in 2023, 14% higher than the 1997-2023 historical average of 193 filings. Federal courts saw five M&A-related filings in 2024, approximately the same as the six filings in the previous year.
In terms of trends, federal AI-related filings more than doubled in 2024, reaching 15 compared to seven in 2023, predominantly concentrated in the technology sector. COVID-19-related filings also experienced a surge, increasing to 15, up by 36% from the previous year, although still below the peak of 20 filings in 2022. Conversely, cases related to special purpose acquisition companies (SPACs) and cryptocurrency witnessed a notable decline in federal filings, dropping by over 50% from 2023. There were only 11 SPAC filings in 2024, down from 27 in 2023, and just a third of the 33 filings seen in 2021. Cryptocurrency filings also decreased, with only seven cases compared to 15 in 2023 and 23 in 2022. Cybersecurity-related filings continued to diminish, with only two cases in 2025, down from the previous year and below the peak in 2021.
Alexander “Sasha” Aganin, coauthor of the report and a senior vice president at Cornerstone Research, highlighted that federal and state Securities Act of 1933 filings, associated with allegations of inadequate or inaccurate information for investors, saw a drop of 34% compared to 2023, reaching the lowest level since 2013. However, federal Section 10(b)-only filings, which allege fraud or deceit in the sale of securities, increased to 198, the highest on record.
The report also mentioned the U.S. Supreme Court’s dismissal of two securities actions concerning claims against Facebook Inc. and Nvidia Corp. “Retrospectively, ‘no news’ is the big news in the world of securities litigation. The U.S. Supreme Court initially agreed to hear two cases regarding private securities litigation but then dismissed both without a decision on the underlying legal issues,” noted Joseph Grundfest, a professor emeritus at Stanford Law School and former commissioner of the Securities and Exchange Commission.
Regarding the impact of litigation on market cap, the Disclosure Dollar Loss (DDL) Index tracks changes in the dollar value of a defendant’s market capitalization between the trading day before and after the end of the class period. The DDL Index in 2024 reached $438 billion, a 23% increase from the previous year. There were 27 “mega-DDL” filings in 2024, cases with a DDL of at least $5 billion, making up 75% of total DDL value. The Maximum Dollar Loss (MDL) Index, which monitors changes in a defendant company’s market capitalization between the highest market cap during the class period and the day after, decreased by 52% to $1.62 trillion in 2024 from the record high in 2023. There were 35 “mega-MDL” filings in 2024, with an MDL of at least $10 billion, comprising 79% of total MDL. For further details, the full report is available on the Cornerstone Research website.