VERIFIABLE INDEPENDENCE THROUGH THE UNIFORM APPLICATION OF EVENT STUDY ANALYSIS ENHANCES SCA TRANSPARENCY

Publications

"3 Reasons Securities Fraud Litigation Exposure Fell in Q1," Law360

April 9, 2021

In anticipation of a U.S. Supreme Court decision in Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System, tempered filing frequency and lower severity of fraud-on-the-market claims against directors, officers, and their respective U.S.-listed corporations led to a material decrease in Rule 10b-5 private securities fraud litigation exposure during the first quarter of 2021.

Based on our monitoring of securities class actions, we posit that three factors have contributed to U.S. issuers' and non-U.S. issuers' lowest exposure since 2018 to securities class actions that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act, and SEC Rule 10b-5 promulgated thereunder. 

"Limiting The Severity of Deficient Securities Fraud Claims," Law360

January 8, 2021

The U.S. Supreme Court's evidentiary requirements of price impact at the class certification stage — established in its Halliburton II decision in 2014 — provide an effective solution to disqualify securities fraud claims with price impact deficiencies. 

 

Our empirical evidence, which is derived from the uniform application of single-firm event study analysis on 397 Rule 10(b)-5 Exchange Act claims filed during the last 10 consecutive quarters, indicates that Halliburton II defenses are highly effective in limiting — and potentially eliminating — alleged aggregated damages on open securities class actions that exhibit verifiable deficiencies of stock price impact. 

"Guest Post: Second Circuit Ruling Exposes D&Os to Exchange Act Claims Based on Biased Short-Seller Research" The D&O Diary

December 3, 2020

This legal development is troubling for directors and officers of U.S. listed corporations and their insurers, because it keeps the door open for Plaintiffs to file costly securities class actions based on biased research from self-interested, non-independent parties.  The analysis by the 2nd Circuit Appellate Court prioritized the accessibility and availability of potentially material and corrective information disseminated by profit-taking short-sellers, over the independent validity of such information.

"Funder, Short-Seller Use Undermines Securities Class Actions" Law360

August 24, 2020

Two factors in the securities class action arena are exacerbating the potential for conflicts of interest: the use of and reliance on activist short-seller reports as a basis to initiate securities class action claims, and privileged third-party litigation funding agreements. These two seemingly distinct factors are related due to their potential to breed systemic conflicts of interest that inhibit the effective private enforcement of our federal securities laws if they are left to proliferate without warranted judicial scrutiny.

"Fed. Courts Are Best Regulator Of Securities Class Actions" Law360

June 29, 2020

In their working legal paper, law professors Jill E. Fisch and Jonah B. Gelbach posit: "Federal judges are poorly positioned to weigh the policy considerations reflected by the tradeoff between confidence level and power" in single-firm event studies that are used and relied upon to evaluate market efficiency, price impact, and loss causation in securities class actions that allege violations of federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by U.S. Securities and Exchange Commission.

"First-Quarter Securities Class Actions Respond To Outbreak" Law360

April 10, 2020

Transparency is paramount in the securities class action arena. Directors and officers, as well as institutional investors, rely on the rule of law and the duty of candor of their lawyers to seek and attain justice through the judiciary process. 

"Assessing Securities Class Action Risk With Event Analysis" Law360

January 22, 2020

According to a recent article in the Harvard Law School Forum on Corporate Governance, the board of directors of a U.S. publicly traded corporation "has a fiduciary duty to promote the best interests of the corporation, and in fulfilling that duty, directors must exercise their business judgment...

"Securities Class Period Selection Deserves Greater Scrutiny" Law360

October 24, 2019

The class period interval in securities class actions that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 is the second most fundamental determinant of the magnitude of potential aggregate — or classwide — damages.

"Time To Resolve Post-Cyan Securities Class Action Confusion" Law360

July 24, 2019

The Supreme Court decision in Cyan Inc. v. Beaver County Employees Retirement Fund “swings the doors of state courts wide open to actions asserting ’33 Act claims against issuers, officers, directors, underwriters, and others involved in the securities offering process.

"An Analytical Approach To Defending Securities Class Claims" Law360

June 20, 2019

Since the event-driven securities class action lawsuit against PG&E Corporation was filed one year ago, plaintiffs counsel have filed 211 securities class action complaints that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 against U.S.-based public corporations.

"Exposure To Market Fraud Suits Is Not A Major Risk" Law360

February 21, 2019

Crude measures of exposure to securities class actions that allege violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 take the “change in target companies’ market capitalization over the class period.

"Monitoring Corrective Disclosures To Protect Investors" Law360

February 4, 2019

Event-driven securities class actions are an evolving class action mechanism employed by securities class action counsel to protect all investors that buy and sell publicly traded securities on U.S. exchanges.

Press Releases

SAR Launches Quarterly Rule 10b-5 Settlement Rates in Collaboration with ISS Securities Class Action Services (ISS SCAS)

May 7, 2021

SAR, an industry pioneer in the development of independent securities class action data analytics, today announced the launch of SAR Rule 10b-5 Settlement Rates that leverage the accurate settlement reporting and claim recovery services of ISS Securities Class Action Services (ISS SCAS). 

SAR's Rule 10b-5 Settlement Rates are updated and published on a quarterly basis to enhance claim valuation transparency on filed securities class actions that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. SAR's independently quantified securities class action settlement rates support key industry stakeholders with the evaluation of potential settlement value throughout the lifecycle of a securities class action.  

Global Corporate Exposure to Rule 10b-5 Securities Class Actions Amounts to $37.8 billion in 1Q 2021

April 9, 2021

Global exposure of publicly traded companies to stock-drop securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, amounts to $37.8 billion in 1Q'21 - a decline of 78.8% relative to 4Q'20.

U.S. SCA Rule 10b-5 Exposure of U.S. Issuers amounts to $33.6 billion in 1Q'21, a material decline of 65.7% relative to 4Q'20. ADR Rule 10b-5 Exposure of non-U.S. issuers that trade via American Depositary Receipts (ADRs) on U.S. Exchanges amounts to $4.3 billion in 1Q'21, a material decline of 94.6% relative to 4Q'20.

Global Corporate Exposure to Stock Drop Securities Class Actions Amounts to $177.1 billion in 4Q and $438.5 billion in 2020

January 8, 2021

Exposure of directors and officers to stock-drop securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, amounts to $177.1 billion in 4Q'20. 

U.S. SCA Rule 10b-5 Exposure of U.S. issuers amounts to $97.8 billion in 4Q'20, a slight decrease of 4% relative to 3Q'20. ADR SCA Rule 10b-5 Exposure of non-U.S. issuers that trade via American Depository Receipts (ADRs) on U.S. exchanges amounts to $79.3 billion in 4Q'20, an increase of 153% relative to 3Q'20.

Global Corporate Exposure to Stock Drop Securities Class Actions Amounts to $133.2 billion in 3Q 2020

October 9, 2020

Exposure of directors and officers of U.S. issuers and non-U.S. issuers to stock-drop securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, amounts to $133.2 billion in 3Q'20. 

Global Corporate Exposure to Stock Drop Securities Class Actions Amounts to $53.1 billion in 2Q 2020

July 10, 2020

Exposure of directors and officers of U.S. issuers and non-U.S. issuers to stock-drop securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, amounts to $53.1 billion in 2Q'20. 

Global Corporate Exposure to Alleged Violations of Rule 10b-5 under the Exchange Act Amounts to $75.2 billion in 1Q 2020

April 10, 2020

Global exposure of U.S. issuers and non-U.S. issuers to securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, amounts to $75.19 billion in 1Q'20.

U.S. Corporate Exposure to Alleged Violations of the Securities Exchange Act Amounts to $50.9 billion in 4Q 2019 and $321.1 billion in 2019

January 10, 2020

Aggregate exposure of U.S. public corporations to securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Exchange Act amounts to $50.9 billion during 4Q of 2019.

SAR Closes on $1 Million In Seed Funding, Grows Leadership Team, and Expands SCA Data Analytics Coverage

November 26, 2019

SAR, LLC (SAR), a securities class action (SCA) data analytics software company, has closed on its final seed round, raising a total of $1 million in seed capital from a group of angel investors.  SAR is an independent and highly specialized provider of SCA data analytics services. 

U.S. Corporate Exposure to Alleged Violations of the Securities Exchange Act Amounts to $68.4 billion in 3Q 2019

October 10th, 2019

Aggregate exposure of U.S. public corporations to securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Exchange Act amounted to $68.4 billion during 3Q of 2019. Cumulative SCA Exchange Act exposure for 2019 amounts to $270.1 billion.

U.S. Corporate Exposure to Alleged Violations of the Securities Exchange Act Amounts to $135.1 billion in 2Q 2019

July 10, 2019

Aggregate exposure of U.S. public corporations to securities class action (SCA) lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act amounted to $135.1 billion during the second quarter of 2019.

Corporate Exposure to Alleged Violations of the Securities Exchange Act Amounts to $68.1 billion in 1Q 2019

April 10, 2019

Aggregate exposure of U.S. public corporations to securities class action lawsuits that allege violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act was $68.1 billion during the first quarter of 2019.

SAR, LLC Launches New Data Analytics Software Platforms for Lawyers and Insurance Carriers in Securities Class Action Litigation

October 8, 2018

SAR, LLC (SAR), a software, technology, and data analytics company, today announced the launch of two distinct new SaaS platforms for securities class action litigation. The platforms allow securities class action attorneys, D&O insurance carriers, alternative dispute resolution...