Securities class-action tech filings increase: Cornerstone
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The number of securities class-action filings involving tech companies increased for the fourth consecutive year, in line with the trend in overall filings, says a report issued Monday.
Tech company filings have increased steadily from 28 in 2016 to a high of 85 in 2019, and accounted for 20% of total filings against both tech and non-tech companies in 2016-2019, according to the report issued by San Francisco-based Cornerstone Research Inc.
Among other findings, state filings involving tech companies increased as a percentage of total filings in both state and federal courts, from 9% in 2017 to 18% in 2018 and 33% in 2020’s first quarter, according to the court.
The report said this shift is likely a consequence of a U.S. Supreme Court 2018 ruling that confirmed states courts’ jurisdiction over the federal Securities Act of 1933.
The report said that while COVID-19’s full impact on filing activity remains to be seen, “there is potential for increased securities class action filings including those against tech companies, based on the economic slowdown and operational issues associated with the pandemic.”
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