With our recently volatile stock markets comes heightened securities litigation risks, as significant stock price drops often prompt plaintiffs’ firms to look for claims. The research firm SAR recently published its latest U.S. Securities Litigation Risk Report, which quantifies securities litigation risk for U.S. public companies. The press release announcing the report notes:

“Our data and empirical analyses confirm that directors and officers of U.S. public companies face a notable increase in securities litigation risk in 2025, despite record-setting public equity valuations. Issuers now face an increase of about $1.8 trillion in market capitalization losses linked to High-Risk adverse corporate events,” said Nessim Mezrahi, Co-Founder and CEO of SAR.

Other key takeaways from the report include:

– As of June 2025, the sector with the greatest market capitalization losses as a percentage of the sector-specific market capitalization is Health Care at 25.88%, followed by Industrials at 18.26%, and Consumer Discretionary at 17.79%, respectively.

– Information Technology companies faced the greatest market capitalization losses per High-Risk ACE, amounting to $2.21 billion, followed by Communication Services and Consumer Staples with $1.95 and $1.32 billion, respectively.

– The sector with the highest median SAR Risk Score, and therefore facing a higher probability of defending a securities class action, is Health Care with a median score of 33.18%, followed by Information Technology and Consumer Discretionary with 25.41% and 26.39%, respectively.

– Dave Lynn