Securities Class Action Filings Remain Stable but Increase in Size in Early 2025

Analysis of Securities Class Action Filings in 2025

In the first half of 2025, the landscape of securities class action filings showcased both stability and significant evolution in terms of size. According to Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse, the count of filings remained relatively constant, yet the financial implications reflected a substantial uptick.

Filings Hold Steady

The report detailed that plaintiffs filed a total of 114 securities class action lawsuits across federal and state courts during the initial six months of 2025. This figure is almost identical to the 115 lawsuits recorded in the latter half of 2024. Notably, core filings (those excluding merger and acquisition cases) totaled 111, aligning closely with the previous period's 112, and exceeding the historical average of 97 by a remarkable margin.

AI-Related Filings Surge

One of the most striking trends identified was the marked increase in filings associated with artificial intelligence, which saw 12 cases lodged in the first half of 2025. This trend suggests a potential to far surpass the tally of 15 cases recorded for the entirety of 2024. As businesses increasingly integrate AI technologies, claims concerning misleading information regarding these capabilities are becoming more prevalent as investors request accountability for misrepresentations.

Shifts in Filing Behavior

Examining the quarterly breakdown reveals intriguing patterns. The filings in the first quarter of 2025 soared to 67, contrasting sharply with a decrease to 47 in the second quarter. This decline is a shift away from 2024, where the second quarter consistently outperformed the first. The upswing in AI litigation aligns with rising concerns regarding 'AI washing'—where companies exaggerate their AI capabilities, consequently leading to significant legal repercussions and investor losses.

Financial Implications and Indicators

Further painting a vivid picture of the current environment, the Disclosure Dollar Loss (DDL) Index™ hit $403 billion, a 56% increase from the prior half-year, marking it as the highest since the record-setting $628 billion in early 2022. Additionally, the Maximum Dollar Loss (MDL) Index™ witnessed an extraordinary rise to $1,851 billion, a staggering 154% surge, emphasizing the sharp financial impact of these filings. For investors and stakeholders, the 'mega-litigation'—where colossal claims are made against major companies—poses a critical element as the magnitude of claims often outweighs the sheer number of companies facing litigation.

Sector-Specific Trends

While overall filings stayed constant, fluctuations in industry-specific filings were observed. The Consumer Non-Cyclical sector, for instance, saw a notable 31% increase, driven chiefly by surges in biotechnology and pharmaceuticals. Concurrently, mega filings accounted for significant proportions of total MDL and DDL, representing 91% and 83%, respectively. Comparatively, filings categorized as mega, particularly in dollar loss, reflect an increase three times above the historical semiannual average.

Core Filings Statistics

Interestingly, the count of core filings in specific circuits showed fluctuations as well. For example, the Second and Ninth Circuits experienced a nearly 20% decrease but still encapsulated 69% of total DDL. The probability of core filings against U.S. exchange-listed companies is estimated to decrease slightly, signaling a subtle shift in the litigation landscape.

In conclusion, the data from the first six months of 2025 illustrates a dual narrative of stability in volume alongside an increase in the stakes involved, chiefly driven by advancements and complexities within the AI realm. As companies adapt to this rapidly changing environment, the repercussions of misinformation could shape the future of securities class actions. As these trends evolve, investors are urged to remain vigilant and informed on the implications of their investments in the face of these developments.

For those seeking to delve deeper into the detailed findings, the full report is available through Cornerstone Research.