Securities class action filings dropped by 22% in 2020 from a record high the year before, due in part to substantial dips in the filing of state court claims and claims tied to mergers and acquisitions, according to a report released Wednesday.
Securities class-action lawsuits plummet in 2020 – report
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The number of securities class-action lawsuits filed in 2020 dropped significantly from the record-setting levels in 2019, according to a report released Wednesday by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.
Plaintiffs filed 334 securities class-action cases in federal and state courts in 2020, a 22% reduction from the 427 cases filed in 2019. It was the first time since 2016 that plaintiffs filed complaints against fewer than 400 issuers in a year, according to the report, Securities Class Action Filings 2020 Year in Review.
The number of core filings those not focused on mergers and acquisitions fell 12% in 2020 to 234. Mergers and acquisitions filings were down to 100 in 2020 from 160 in the year prior.
James Langton
Amid the disruption caused by the global pandemic, the volume of U.S. securities class actions declined in 2020, according to a new report from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.
The total number of securities class action filings dropped by 22% last year, driven by a 38% decline in federal filings involving mergers and acquisitions. Excluding M&A activity, class action filings were down by 12% year over year, it reported.
While total class action activity was down, cases brought in the U.S. against Canadian companies hit an all-time high in 2020, Cornerstone Research reported.
There were 12 cases filed in U.S. federal courts involving Canadian firms last year, up from nine in 2019 and six in 2018.