Securities Class Action Filings Increase for Second Consecutive Year in 2024

AI-related filings more than double and 1933 Act filings continue to decline.

MENLO PARK, Calif., Jan. 29, 2025 /PRNewswire/ -- The number of securities class action filings increased for the second consecutive year in 2024, with artificial intelligence (AI)-related filings more than doubling from the previous year, according to a new report released today by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. The increase came despite a continued year-over-year decline in federal and state filings with claims under the Securities Act of 1933.

The report, Securities Class Action Filings—2024 Year in Review, found that plaintiffs filed 225 securities class action lawsuits in federal and state courts in 2024, up from 215 filings in 2023. The number of "core" filings—those excluding M&A filings—reached 220, 14% higher than the 1997–2023 historical average of 193.

The number of AI-related filings more than doubled, from seven in 2023 to 15 in 2024. The number of COVID-19-related filings increased by 36% relative to 2023, but remained below the high of 20 in 2022. In contrast to the AI and COVID-19 trend categories, the number of SPAC and cryptocurrency-related filings fell by more than 50% as compared to 2023. Cybersecurity-related filings also continued to decline. The top three trend categories in 2024 were AI (15 filings), COVID-19 (15 filings), and SPAC (11 filings), collectively accounting for nearly 20% of core federal filings. 

"In 2024, federal and state 1933 Act filings declined 34% from 2023 and reached the lowest number since 2013," said Alexander "Sasha" Aganin, the report's coauthor and a Cornerstone Research senior vice president, who coheads the firm's finance practice. "Meanwhile, federal Section 10(b)–only filings increased to the highest level on record, the number of AI- and COVID-19-related filings rose, and the total number of overall filings increased."

Along with an increase in overall filings, the size of core filings, when measured by the Disclosure Dollar Loss Index® (DDL Index®), rose 23% to $438 billion in 2024, far above the historical annual average of $237 billion. Conversely, the aggregate filing size, as measured by the Maximum Dollar Loss Index® (MDL Index®), declined sharply to $1.6 trillion in 2024, a 52% drop from $3.3 trillion in 2023. There were 35 mega MDL filings (filings with more than $10 billion in MDL) in 2024, which accounted for $1.3 trillion in MDL, nearly 80% of total MDL.

"Retrospectively, 'no news' is the big news in the world of securities litigation. The U.S. Supreme Court initially agreed to hear two cases involving private securities litigation but then dismissed both with no decision on the underlying questions of law. The concern among practitioners is that the Court will, in the future, be even more selective in deciding whether to hear securities cases," commented former SEC Commissioner Joseph Grundfest, now professor emeritus at Stanford Law School. "Prospectively, crypto is the elephant in the room. How will the statutes and regulations be reformed? If much of crypto is redefined as not constituting a security, then securities litigation in that sector will obviously plummet. Stay tuned, is about all one can say."

Key Trends

• Of the 15 AI-related filings in 2024, eight were in the Technology sector, four were in the Communications sector, two were in the Industrial sector, and one filing was in the Consumer Non-Cyclical sector.
• The number of filings in the Consumer Non-Cyclical sector increased from 54 in 2023 to 67 in 2024,  largely driven by an increase in filings against Biotechnology companies in 2024 H2.
• While the likelihood of core filings targeting U.S. exchange-listed companies increased to 3.9% in 2024 from 3.2% in 2023, the probability of an S&P 500 company being the subject of a core federal filing dropped one percentage point to 6.1%.
• The count of mega DDL filings (27) in 2024 was the highest on record, and the total index value of mega DDL filings was the third highest on record.
• For the second year in a row, the number of core federal filings in the Ninth Circuit (69) exceeded those in the Second Circuit (64). The number of core federal filings in the Ninth Circuit was relatively flat compared to 2023, but the number of core federal filings in the Second Circuit increased from 49 to 64.
• The share of core federal filings with Rule 10b-5 claims rose to the highest level in more than five years.

About Cornerstone Research
Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm works with an extensive network of prominent academics and industry practitioners to identify the best-qualified expert for each assignment. With a reputation for high quality and effectiveness, Cornerstone Research has consistently delivered rigorous, state-of-the-art analysis since 1989. The firm has more than 1,000 professionals in nine offices across the United States, UK, and EU.

About the Stanford Law School Securities Class Action Clearinghouse
The Securities Class Action Clearinghouse is an authoritative source of data and analysis on the financial and economic characteristics of federal securities fraud class action litigation. The SCAC maintains a database of more than 6,500 securities class action lawsuits filed since the passage of the Private Securities Litigation Reform Act of 1995. The database also contains copies of complaints, briefs, filings, and other litigation-related materials filed in these cases.

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SOURCE Cornerstone Research