The number of securities class-action lawsuits filed in 2023 increased for the first time in four years, according to a report released by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.
The report, Securities Class Action Filings—2023 Year in Review, found that plaintiffs filed 215 securities class-action lawsuits in 2023, up from 208 in 2022. The number of core filings — those excluding mergers and acquisitions — also increased to 209, up from 201 in 2022.
Eight class action lawsuits from 2023 related to the year's banking turbulence, following one lawsuit in 2022, which are represented as a new emerging trend category in the report. However, filings in other trend categories, including cryptocurrency and COVID-19, decreased in 2023. The number of filings related to special purpose acquisition companies, or SPACs, also fell to 17 in 2023, compared to 28 in 2022.
"Given dramatic allegation of massive frauds in the crypto markets, ranging from FTX to Binance, observers might reasonably be mystified by the decline in private crypto litigation," said Joseph Grundfest, professor at Stanford Law School and a former SEC Commissioner, in a Jan. 31 news release. "But there is a simple explanation. Crypto prices rebounded in the second half of the year. When prices are up, damages are harder to allege so litigation declines."
Cryptocurrency-related filings were down to 14 in 2023, compared to 23 in 2022.
The number of state court-only filings dropped to only two cases in 2023, representing the lowest number since 2014, according to the report.
