Extracted from Law360
As summer gives way to back-to-school routines and the first hints of fall, securities litigators across the country are eagerly analyzing the filing data from the first half of the year and bringing out their crystal balls to forecast where securities litigation trends are headed.
According to National Economic Research Associates Inc.'s midyear report on federal securities class action filings, plaintiffs brought 118 new federal securities class actions between this January and June. If this pace is sustained, it would yield approximately 236 filings for the full year, surpassing the record of 233 filings set in 2023 and representing roughly 15% more cases than were filed in 2025.[1]
This surge arrives against a backdrop of reduced enforcement activity from the U.S. Securities and Exchange Commission, more artificial intelligence-related filings than ever before, and trends involving technology companies, healthcare companies, and foreign issuers. In short, all signs point to continued elevated filings for the rest of the year.
Private Plaintiffs Filling the Regulatory Vacuum
Much ink has been spilled concerning the SEC's 2025 announcement that it would refocus on traditional core enforcement areas like insider trading, accounting and disclosure fraud, and market manipulation. Many commentators theorized that the agency's pullback from more aggressive securities enforcement would ease the litigation environment for public companies.
But is it as straightforward as fewer SEC actions meaning fewer parallel private suits? In a world where the SEC allows mandatory arbitration provisions and reduced public company reporting, does that create a chilling effect on securities litigation and a generally more favorable climate for corporate defendants?
The midyear 2026 data suggests that theory may not hold water.
Instead, a substitution effect appears to be taking place. Plaintiffs, traditionally following the SEC's enforcement priorities as a road map for private litigation, have adapted.
In the absence of robust government action, sophisticated plaintiffs are conducting their own investigations, relying on algorithmic stock-drop screening tools, using AI to review swaths of corporate disclosures with increasing granularity, and filing cases that might previously have awaited an SEC enforcement action as a predicate. The 118 filings in the first half of 2026 suggest plaintiffs are independently generating a pipeline of private claims.
Understandably, the current regulatory environment has tempted some companies to reduce their disclosures. That instinct is misguided. Reduced transparency does not reduce litigation risk; it amplifies it. Ultimately, companies that pull back on disclosures in response to regulators' lighter touch may find they have traded government scrutiny for a far more costly and unpredictable form of private litigation.
Moreover, when the SEC announced it would not view mandatory arbitration provisions requiring investors to arbitrate claims as inconsistent with the federal securities laws, many observers predicted this development would effectively kill securities class actions by channeling investor disputes into individualized arbitration proceedings.
The midyear data has not borne this out. Rather than insulating issuers from private suits, these clauses are likely to become litigation magnets in the near future, as courts grapple with the practical implications of enforcing such provisions.
For issuers, the implications of the midyear data are sobering. A company that calibrates its disclosure practices and litigation risk primarily by referencing the regulatory enforcement climate may be underestimating its actual exposure.
Today, the relevant question is not whether the government is likely to bring an action; it is whether a material stock decline creates a viable Section 10(b) theory under the Exchange Act. In short: Reduced enforcement activity is not a proxy for reduced litigation risk.
The AI Disclosure Paradox: More Filings, More Disclosures?
NERA's midyear data reports that 18 AI-related securities class actions were filed in the first six months of 2026, already exceeding the 17 such cases filed during all of 2025. At first blush, that figure suggests plaintiffs are aggressively targeting AI-related corporate statements. But the data may not be so straightforward.
Consider two competing explanations. Under the first, plaintiffs have sharpened their focus on AI disclosures, applying heightened scrutiny to each company's statements about AI capabilities, implementation timelines and anticipated financial benefits.
Under the second explanation, however, the number of companies making material AI-related disclosures has itself grown substantially as AI integration has accelerated across industries. If the base of AI-disclosing companies has expanded proportionally — or more — then the observed increase in filings may simply reflect a larger denominator of potential targets.
The honest answer is that the current data cannot cleanly distinguish between these explanations, and the truth likely involves elements of both. What can be said with confidence is that the interaction between expanding AI disclosures and expanding AI-related litigation creates a self-reinforcing dynamic.
Each high-profile AI-related securities class action generates media coverage and commentary, which in turn heightens awareness among other plaintiffs and encourages additional filings. Meanwhile, companies are making more AI-related disclosures than ever before, providing more statements for plaintiffs to review. That loop is likely to continue for the foreseeable future.
Technology and Healthcare at the Intersection of AI Risk
Electronic technology and technology services companies accounted for 28% of filings in the first half of 2026, while health technology and healthcare services companies represented 26%: together, these sectors represent more than half of all federal securities class actions filed during the period. These are precisely the sectors at the forefront of AI adoption and, critically, AI-related disclosure.
Technology companies are obvious targets: They are building AI tools, integrating large language models into products, and making projections about AI-driven revenue growth. Meanwhile, healthcare and health technology companies have increasingly touted AI applications in drug discovery, diagnostic imaging, clinical trial optimization and administrative automation.
These disclosures tend to be both highly specific, naming particular AI-driven products or capabilities, and tied to concrete financial projections, such as cost savings, time-to-market reductions or competitive differentiation. That combination is precisely what makes a disclosure vulnerable to a securities fraud theory when subsequent results disappoint.
Foreign Issuers Face Increased Regulation and More Filings
After five consecutive years of decline and a 10-year low in 2025, filings against foreign issuers rebounded sharply in the first half of 2026. Foreign companies accounted for 20.5% of filings, or 23 cases, during the period, compared to 13.8% in the first half of 2025. Remarkably, the first-half 2026 total was only three filings shy of the entire full-year 2025 count for foreign issuers.
Two structural factors appear to be driving this reversal. First, the population of foreign companies listed on U.S. exchanges has continued to grow, expanding the universe of potential defendants subject to U.S. securities laws and the jurisdiction of U.S. courts. As more foreign issuers access American capital markets, they accept the litigation risk that accompanies U.S. disclosure obligations.
Second, heightened regulatory and media attention on foreign issuers, particularly around market manipulation and accounting integrity concerns, has provided plaintiffs with investigative leads and public narratives that support securities fraud theories. Last year, the SEC announced the formation of a cross-border task force within its Division of Enforcement, and identified investigation of potential violations of securities laws involving foreign issuers as a priority for the agency.
This combination of a larger target population and increased enforcement-related triggers produced a predictable result: more filings.
Looking Forward
The first half of 2026 suggests that the current surge in securities class action filings is driven by specific — and in some ways, unexpected — factors that appear to be here to stay. The midyear data suggests, at minimum, that plaintiffs have adapted to the current environment, and filings are likely to remain elevated for the foreseeable future.
[1] https://www.nera.com/insights/publications/2026/recent-trends-in-securities-class-action-litigation--h1-2026-upd.html?lang=en.