Upward trend of securities case filings and shareholder derivative suits over the last three years continues unabated through the pandemic.
Today, Lex Machina and LexisNexis release their annual Securities Litigation Report looking at securities litigation trends in federal district court. It focuses on the three-year period of 2018 to 2020 and includes looks at emerging trends in cryptocurrency cases and the impact of COVID-19.
“The data revealed that in 2020, there was a continuation of the steady increase in securities case filings – and shareholder derivative suits – we’ve seen over the past three years. This could be a result of event- driven litigation, including pandemic-driven litigation, pushing shareholders to file securities cases,” said Laura Hopkins, Lex Machina’s Securities Legal Data Expert and author of the report. “This is unexpected, given the slow down many courts experienced in 2020 due to the pandemic.”
Findings from the report include:
- Yearly securities case filings as a whole, and shareholder derivative cases in particular, have increased steadily since 2016, reaching a total of 2,159 securities cases filed in 2020 (an 89% increase since 2016).
- Cases involving cryptocurrencies sharply increased since 2016, with 113 filed in 2020.
- Over the last three years, the most securities cases were filed in the Southern District of New York (1,294 cases); however, Judge Stark, from the District of Delaware, heard the highest number of securities cases (242 cases). The top four most active judges were in the District of Delaware.
- The Securities and Exchange Commission (the “SEC”) appeared as the plaintiff in 760 cases over the last three years. The most active defendants in securities cases over the last three years were banks and financial institutions, with J.P. Morgan Securities LLC appearing as the defendant in the most cases (63 cases) over the same time period.
- Over the past three years, the Securities and Exchange Commission topped the most active plaintiffs’ firms with 710 securities cases filed, followed by Rigrodsky Law with 534 cases. Skadden, Arps, Slate, Meagher & Flom appeared most often on behalf of defendants in securities cases filed over the last three years, with 172 cases.
- The total damages awarded increased from nearly $4.0 billion to $4.2 billion between 2019 and 2020. The securities case with the largest amount of damages awarded in 2020 was Securities and Exchange Commission v. Telegram Group Inc. et al, with $1.2 billion in disgorgement damages and $18.5 million in SEC/CFTC Penalties on consent judgment.
Lex Machina’s reports and software enable practitioners to devise data-driven litigation strategies. The metrics in this report may help readers decide who to pursue as clients, whether to pursue a particular motion, or when to settle. This research supplements traditional legal research and anecdotal data for a competitive edge in litigation.
Register here for a copy of the report: https://pages.lexmachina.com/2021_Securities-Report-LP.html
About LexisNexis Legal & Professional
LexisNexis Legal & Professional is a leading global provider of legal, regulatory and business information and analytics that help customers increase productivity, improve decision-making and outcomes, and advance the rule of law around the world. As a digital pioneer, the company was the first to bring legal and business information online with its Lexis® and Nexis® services. LexisNexis Legal & Professional, which serves customers in more than 160 countries with 10,400 employees worldwide, is part of RELX, a global provider of information-based analytics and decision tools for professional and business customers.
About Lex Machina
Lex Machina fundamentally changes how companies and law firms compete in the business and practice of law. The company provides strategic insights on judges, lawyers, law firms, parties, and other critical information across 17 federal practice areas and a rapidly growing number of state courts. Lex Machina allows law firms and companies to predict the behaviors and outcomes that different legal strategies will produce, enabling them to win cases and close business.
Lex Machina was named “2021 Legal Technology Trailblazer” (National Law Journal Trailblazer Awards, 2021), Winner of the “Media Excellence” Award for Analytics/Big Data (13th Annual Media Excellence Award, 2021), “Best Decision Management Solution” (AI Breakthrough Awards, 2019), and “Disruptor of the Year” (Changing Lawyer Awards, 2019). Based in Silicon Valley, Lex Machina is part of LexisNexis, a leading global provider of legal, regulatory, and business information and analytics. For more information, please visit www.lexmachina.com.
For a visual representation of this information, please see the following infographic:
Join the conversation!