Defeating Event-Driven Securities Class Actions

The number of securities class actions is skyrocketing. Between 1997 and 2017, plaintiffs filed an average of 235 new federal securities class actions per year. In 2018 federal courts saw nearly double that number, at 441.

One of the major factors driving this increase is a noted increase in one class of securities cases: event-driven claims. These are claims filed in response to adverse company events such as a data security breach, sexual harassment allegations, a catastrophic explosion, allegations that a drug or product has side effects, or a regulatory investigation or enforcement action. While it has always been typical for such events to trigger personal injury or other tort litigation, plaintiffs' firms are increasingly bringing tag-along securities lawsuits alleging that the risks underlying the adverse events were not adequately disclosed.

Such cases are easy for plaintiffs to bring even though they are less likely to have merit. Plaintiffs in event-driven securities cases can rely on the investigative work of plaintiffs already suing the company under personal injury or tort causes of action about the same event. Suspect event-driven securities cases are on the rise and warrant careful attention by companies and their outside counsel.

While each event-driven suit stands on its facts, awareness of weapons available in a defendant's arsenal in dealing with such class actions is key to the formulation of a successful defense strategy.

Listen as our authoritative panel of class action attorneys and experts examines the recent trend of event-driven securities lawsuits, analyzes the impact of these cases, and provides practical guidance and strategic insights to counsel on ways to formulate defense strategies that can minimize client exposure.