Lex Machina’s 2018 Securities Litigation Report Reveals Securities Litigation Is at an All-Time High
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New case filings have increased, but fewer cases proceed to trial as more defendants win by judgment on the pleadings
Among its key findings, the report reveals that during the 18 months following the nomination of Jay Clayton as SEC Chairman in January 2017, securities case filings were at an all-time high (2,622 cases — a 60% increase over the prior 18 months) with Q1 2018 recording the most case filings to date (485 cases). During the same period, plaintiff losses on judgments on the pleadings also increased, with fewer cases proceeding to trial on the merits. Between July 1, 2015 through December 31, 2016 there were 42 claim defendant wins with a judgment on the pleadings, but during the next 18 months, that number jumped to 173. The median time to termination decreased from 419 days in the first 18-month period to 138 in the second, likely due to the increase in cases resolving on plaintiff voluntary dismissals and judgment on the pleadings.
In addition, the first two quarters of 2018 saw a significant rise in the number of securities cases relating to cryptocurrency or Bitcoin. Using Legal Analytics’ keyword search functionality, Lex Machina discovered case filings relating to this emerging area surged from seven cases in Q4 2017 to 22 cases in Q1 2018 Q1 and 23 cases in Q2.
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