Courts Update: Skadden Securities Litigators Share Insights

In 2024, the world of securities litigation saw some interesting developments. While the overall pace of litigation remained steady, there were some unique occurrences that stood out. One of the notable aspects of the year was the fact that the U.S. Supreme Court had four securities cases on its docket, which was higher than usual. However, what truly made headlines was the Court’s decision to dismiss two of these cases after oral arguments, leaving unresolved issues of significant importance.

The rulings and decisions made by the Supreme Court in 2024 had a profound impact on the world of securities litigation. One such ruling that gained attention was in the case of Macquarie Infrastructure Corp. v. Moab Partners LP, where the Court clarified that pure omissions are not actionable under Rule 10b-5(b). Additionally, in SEC v. Jarkesy, the Court ruled that the SEC cannot seek civil penalties in its administrative courts. These rulings, along with the influence of past decisions like the 2021 Goldman Sachs ruling, have played a significant role in shaping the landscape of securities litigation.

Class certification denials have increasingly been influenced by Supreme Court precedents like the Goldman Sachs decision, with courts using these rulings to challenge the presumption of classwide investor reliance. The impact of these decisions is far-reaching and has had a considerable effect on the strategies employed by both defendants and plaintiffs in securities cases.

Throughout 2024, securities litigation saw a consistent level of activity, with filing trends remaining in line with historical averages. While the number of core filings, which exclude allegations related to merger transactions, saw a slight uptick compared to the previous year, overall filing rates remained stable. The likelihood of a U.S.-listed company facing a lawsuit in any given year was slightly above the historical average at 3.9%, indicating a relatively stable environment for securities litigation.

One interesting trend observed in 2024 was the increase in securities class actions related to COVID-19, with seven such cases filed in the first half of the year. Additionally, suits involving companies in the artificial intelligence sector saw a rise. This uptick can be attributed to the growing presence of public companies in the AI space and the unique legal challenges associated with this technology.

On the other hand, securities class actions involving special-purpose acquisition companies (SPACs) and merger transactions experienced a decline in 2024. This downward trend may be linked to a broader market slowdown affecting SPAC and de-SPAC transactions, along with general market conditions that contributed to reduced litigation in these areas.

In conclusion, the year 2024 brought several interesting developments to the world of securities litigation. The decisions made by the U.S. Supreme Court, along with filing trends and legal challenges, have shaped the landscape of securities litigation and provided valuable insights into the evolving nature of this field. As the legal and regulatory environment continues to evolve, it will be crucial for practitioners and stakeholders to stay abreast of these developments to navigate the complexities of securities litigation effectively.