SECURITIES LITIGATION

CD: Could you provide an overview of notable trends impacting the securities litigation space over the past 12 months or so?

Herring: Since the Morrison decision in the US Supreme Court in 2010, which determined that securities litigation claims brought by foreign investors against foreign companies over securities transacted on a foreign exchange cannot be litigated in the US, there has been a steady rise in securities litigation around the world. Institutional investors still find it challenging to reconcile their long-term interests as an investor with potentially removing significant amounts of capital from an investment by way of a damages claim. Hence, there is increasing interest in more sophisticated litigation strategies combining traditional litigation procedure with corporate governance objectives. This is with the goal of producing meaningful changes within a company to avoid similar conditions for a damages claim arising again in the future. Recent high-profile class actions in this space have tended to focus on the most blatant examples of corporate wrongdoing, which cannot be ignored and that affect large groups of investor claimants.

Drylewski: Securities litigation filings in the US have remained at high levels in 2024, which has been driven in part by continued stock market volatility. So-called ‘event driven’ securities claims – which follow on the heels of announcements of negative events, such as an accounting restatement, product recall or regulatory penalty – have remained steady over the past few years. Other recent trends include an increase in artificial intelligence-related and coronavirus (COVID-19)-related securities class actions. And as public company disclosures regarding environmental, social and governance (ESG) factors have grown in prominence, there has been a corresponding increase in ESG-related securities suits. Finally, digital asset-related securities litigation remains very active, both from private class action plaintiffs and securities regulators.

Jan-Mar 2025 issue

McCarthy Tétrault LLP

Pinsent Masons LLP

Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

Travers Smith