The Changing Terrain of Securities Litigation and Financial Disputes

Securities litigation is currently experiencing a significant transformation due to the rise of artificial intelligence and changes in the regulatory environment. These factors are not only altering the types of claims being filed but also impacting how cases are pleaded, how rules are shaped and enforced by regulators, and how companies handle litigation risk. The traditional approaches to securities litigation are no longer suitable for the present market realities.

As a result of these evolving dynamics, companies and their advisors are being compelled to reconsider their disclosure practices, litigation strategies, and the use of experts much earlier in the process than before. The ability to interpret complex financial and market data accurately and present it in a defendable manner has become crucial, especially at the motion to dismiss stage, where cases are often decided outright.

Eric Poer, the Managing Director at Secretariat International, a distinguished expert advisory and disputes consulting firm, sheds light on the changing landscape of securities litigation.

“Our work lies at the intersection of financial markets, regulation, and litigation, supporting clients in matters where the factual, economic, and accounting issues are both highly technical and highly consequential.”

Poer has extensive experience in this area, working on some of the country’s most significant securities litigation and investigations matters. These include cases like the Wells Fargo sales practices investigation, Apple’s securities litigation, the Rivian Automotive securities litigation concerning its IPO, and more.

The primary clients of Poer’s practice are Am Law 100 law firms and directors and officers facing regulatory inquiries, enforcement actions, or securities litigation. They specialize in technically demanding and time-sensitive situations where early strategic decisions can significantly impact the case’s direction.

“Our practice focuses on securities class actions, derivative litigation, complex financial disputes, including damage assessments, and forensic investigations involving disclosure issues, market activity, valuation, or transaction-related allegations.”

The team at Secretariat uses an expert-led, technology-enabled model to differentiate themselves from others in the market. They employ a highly experienced group of professionals who have worked together for over 15 years. This continuity allows them to operate efficiently and apply judgment refined over decades.

Moreover, the firm takes a tailored approach to each case, avoiding a one-size-fits-all framework. They use technology to support their analysis, not as the primary driver. The team’s ability to go deep into nuanced issues early in a case adds value to their clients’ defense strategies.

In recent years, client expectations in securities litigation have shifted towards precision, credibility, and clear articulation of defense strategies early in the case. Settlement values have been increasing, with clients looking for advisors who can help them win or narrow the case significantly in the early stages.

The major enforcement and regulatory shifts influencing securities litigation this year include the increased role of state attorneys general in enforcement activities and significant changes within the SEC. These shifts introduce new risks for companies historically focused on federal compliance and litigation strategies. Clients are now seeking experts who know how to effectively and responsibly implement AI technologies in their strategies. Deliverables relying on AI must meet rigorous standards with robust human oversight to be defensible in a scrutinized legal environment.