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NERA recently issued its “Recent Trends in Securities Class Action Litigation: 2024 H1 Update report. NERA’s announcement of the report provides some of key takeaways:

– A total of 112 new federal securities class action suits were filed in the first half of 2024. The bulk of these (106 cases) were standard cases containing alleged violations of Rule 10b-5, Section 11, and/or Section 12. If this pace continues, 2024 will see approximately 224 cases, roughly in line with 2023 levels.

– The electronic technology and technology services and the health technology and services sectors accounted for 54% of filings. However, suits in the finance sector declined by more than one-third to 11%.

– The most active jurisdictions were the Second and Ninth Circuits, which together accounted for approximately 60% of filings.

– A significant number of standard case filings included allegations related to missed earnings guidance (38%) and allegations related to misled future performance (32%). Cases with allegations related to accounting issues declined to 12%.

– AI-related suits have increased, while crypto- and SPAC-related filings have continued to decline.

– The first half of 2024 saw 100 cases resolved, split between 52 dismissals and 48 settlements. If this rate continues, the number of resolved cases in 2024 would exceed the 190 seen in 2023.

– Excluding settlements of $1 billion or more, average settlement values saw a decline by approximately 25% in 2024 H1 from 2023 to $26 million. Similarly, the median settlement value declined by 40% to $9 million.

Over on “The D&O Diary” blog, Kevin LaCroix has posted a deep dive on the NERA report. This excerpt notes that the aggregate value of settlements projects to a lower total than last year, but also points out some big-ticket settlements that may be finalized during the second half of 2024:

The aggregate settlement amount for the first six months of 2024 was $1.2 billion, which projects to a year-end total well below the inflation adjusted aggregate total of $4.0 billion for the full year 2023. However, the report notes that there are several large previously announced pending settlements for which settlement-approval hearings are scheduled in the second half of 2024, including Under Armour ($434 million), Alphabet ($350 million), Zoom Video Communications ($150 million), and Perrigo Company plc ($97 million). The report comments that “the aggregate settlement value in the second half of 2024 would be expected to exceed the $1.2 billion seen in the first half of 2024.”

– John Jenkins