Securities Class Action Filing Activity Fell for Third Straight Year as Volume of M&A Class Actions Declined


Despite the decrease in volume, the average size of securities class action filings increased substantially.

Menlo Park, Calif.—The volume of securities class action lawsuit filings fell for the third straight year in 2022, according to a report released today by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.

The report, Securities Class Action Filings—2022 Year in Review, found that plaintiffs filed 208 securities class action lawsuits in federal and state courts in 2022, down 5% from 218 filings in 2021 and well below the 332 filings in 2020. The 2022 decline was largely due to a continued decline in federal M&A filing activity. Conversely, core filings—those excluding M&A filings—increased by one in 2022 despite SPAC-related core federal filings falling by over a quarter in 2022 from the previous year, which is a reversal from a sixfold increase in such filings in 2021.

Filings with Section 11 allegations reached numbers not seen since 2019, which was the height of post-Cyan activity.

“Following 2021, which saw a surge in SPAC-related filings, core federal SPAC filings were on pace for a record high in 2022 with 18 filings in the first half of the year, before slowing to only six filings in the final six months,” said Alexander “Sasha” Aganin, the report’s coauthor and a Cornerstone Research senior vice president. “This was somewhat unexpected, as shareholders traditionally bring more core filings when the stock market declines.”

Filings involving federal Section 11 claims and state claims under the Securities Act of 1933 rose 43% in 2022. This marks the highest number of federal Section 11 filings since 2008 and the highest number of combined federal Section 11 and state 1933 Act filings since 2019. Further, for the first time in over a decade, more than a fifth of all core federal filings included Section 11 allegations.

Although there was only one more core filing in 2022 than in 2021, the aggregate size of filings rose steeply. Total Maximum Dollar Loss (MDL) and Disclosure Dollar Loss (DDL) rose by 138% and 100%, respectively. DDL was the highest on record, increasing to $593 billion, while MDL increased to $2,433 billion, the highest amount in the last 20 years. These high MDL and DDL totals were due to an increase in the number and size of mega MDL and mega DDL filings.

In 2022, cryptocurrency-related filings greatly exceeded 2021 totals as regulatory oversight increased and the cryptocurrency market weakened. The 23 core filings related to cryptocurrency in 2022 were filed against a diverse pool of defendants.

“Crypto is the new frontier in securities fraud litigation,” observed Joseph A. Grundfest, the William A. Franke Professor of Law and Business (emeritus) at Stanford Law School and a former Commissioner of the Securities and Exchange Commission. “The FTX implosion—combined with the failure of many crypto intermediaries—and the collapse of some crypto asset prices, will keep plaintiffs’ lawyers busy for years. If SPAC litigation is history, crypto litigation is the future, at least for now.”

Securities Class Action Filings—2022 Year in Review

Key Trends
  • Although core federal filings related to SPACs fell by 27% from 2021, they were still four times greater than the 2019–2020 total.
  • Federal M&A class action filings decreased by 61%, reaching the lowest point (seven filings) since tracking began in 2009.
  • With 23 filings, core federal filings related to cryptocurrency more than doubled in 2022 from the previous year, reaching a new record.
  • The total MDL from mega filings tripled compared to 2021.
  • In 2022, the total MDL and DDL of core federal filings in the Communications sector alone surpassed the total MDL and DDL of all core filings in 2021.
  • Continuing the trend of consistently high yearly totals since the start of the pandemic, COVID-19-related filings reached a new high in 2022 with 20 such filings.
  • The Ninth Circuit accounted for 60% of total core federal MDL but only 31% of all core federal filings.
  • In 2022, the likelihood of an S&P 500 company being sued increased for the first time since 2018 to 3.8%, from 2.2% in 2021.
About the Stanford Law School Securities Class Action Clearinghouse

The Securities Class Action Clearinghouse is an authoritative source of data and analysis on the financial and economic characteristics of federal securities fraud class action litigation. The SCAC maintains a database of more than 6,300 securities class action lawsuits filed since passage of the Private Securities Litigation Reform Act of 1995. The database also contains copies of complaints, briefs, filings, and other litigation-related materials filed in these cases.


Liz Sobe
Cornerstone Research