Dechert's 2021 Developments in U.S. Securities Fraud Class Actions Against Non-U.S. Issuers

LONDON, March 2, 2022 /PRNewswire/ -- Dechert's 2021 Developments in U.S. Securities Fraud Class Actions Against Non-U.S. Issuers reveals that overall, securities class action filings dropped in 2021, down 35 percent from 2020. This decrease is driven largely by a drop in new merger and acquisition class actions.

Highlights
- An examination of the 2021 cases reveals two general trends with securities class actions brought against non-U.S. issuers. Specifically, many of the claims alleged that the defendant companies either: (i) misrepresented or omitted material information related to compliance with a result of improper accounting methods or false customer and/or user metrics.

- Continuing the trend, most non-U.S. issuer lawsuits were against companies with headquarters and/or principal place of business in China and Canada.

- About 24 percent of the cases involved alleged misrepresentations in connection with regulatory requirements and/or approvals. This includes seven cases involving alleged misrepresentations in connection with China's regulatory requirements and/or approvals – with four involving China's regulations on data protection and cybersecurity.

- Plaintiffs filed a total of 42 securities class action lawsuits against non-U.S. issuers in 2021, compared with 88 in 2020, which our previous report on non-U.S. issuers revealed. As compared to all securities class actions, the percentage of cases against non-U.S. issuers decreased, but only slightly, from 27 percent in 2020 to 20 percent in 2021.

In conclusion, though the overall number of securities class actions have gone down in 2021, the proportion of cases against non-U.S. issuers has not changed significantly. A company does not need to be based in the United States to face potential securities class action liability in U.S. federal courts. As such, it is imperative that non-U.S. issuers take steps to mitigate their risks in not only their home jurisdictions, but also in the United States.

Read Dechert's 2021 Developments in U.S. Securities Fraud Class Actions Against Non-U.S. Issuers  

Clients choose Dechert to defend them in securities and other shareholder litigation based on our history of creative representation and stellar performance. Our lawyers represent public companies and their executives, officers, directors and board committees, as well as broker-dealers, mutual fund companies and other financial institutions, across the spectrum of securities litigation matters. Our securities litigation team — which is one of the largest in the U.S. — covers all major jurisdictions and market sectors. In addition to handling U.S.-based matters, we have either represented clients or coordinated their representation globally, including in notable jurisdictions such as the UK, France, Germany, Russia and Hong Kong.

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