CROSS-BORDER SECURITIES LITIGATION
CD: Could you provide an overview of recent trends in securities litigation? How would you characterise the level of cross-border cases in particular?
Zhang: A commonly discussed trend has been the increase of securities class actions filed in state courts after the US Supreme Court’s decision in Cyan, Inc. v. Beaver County Employees Retirement Fund. However, how much plaintiffs can leverage uncertainties introduced by litigating in the state courts is still to be observed as more state courts unveil their positions on the applicability of the protections provided under the Private Securities Litigation Reform Act (PSLRA). The recent Delaware Supreme Court’s upholding of a form-selection provision requiring that claims under the Securities Act of 1933 be brought in federal court adds an interesting factor that may further shape the trend. In terms of cross-border cases, there have been a number of filings of both stock drop cases and event driven securities litigation. There has been no obvious decline of cross-border cases despite various challenges posed by the pandemic. In fraud-related securities litigation, we continue to observe complicated interactions of multiple legal proceedings in different jurisdictions.
Schwartz: The number of US securities class actions has continued to grow. According to Cornerstone Research’s 2019 report, 2019 saw a slight increase in total US filings from 2018 – from 420 to 428 – including a substantial increase in ‘core’ filings related to disclosures about ongoing business, and a decrease in filings concerning M&A transactions. These numbers dwarf pre-2017 filing levels, which often were half the 2019 numbers.
Oct-Dec 2020 issue
Kirkland & Ellis LLP
Skadden, Arps, Slate, Meagher & Flom LLP
Sullivan & Cromwell LLP
Weil, Gotshal & Manges (London) LLP