Actions against Foreign Filers falls from 2020 historic high but remain a threat
The past decade has shown a steady year on year rise in securities litigation filed against companies domiciled or headquartered outside of the United States (non-US issuers). From an historic high of 65 core filings in 2020, we saw a fall in 2021, with filings slightly below the annual 10-year average of 42 cases.
There were 45 securities class actions (SCAs) filed against non-US issuers in 2021, of which 39 were core cases which did not involve merger objection litigation. Of these 39 core cases, there were also 5 parallel suits brought in state courts. For the purposes of this report, we will focus on the 39 core filings.
Though it is still too early to draw any firm conclusions from this year-over-year decrease in filings, the effects from ongoing Covid-related lockdowns in 2021 are likely to be a material mitigating factor. This mirrors wider SCA activity against domestic US companies, where total core filings fell. Filings against non-US issuers still made up over a quarter of all filings in 2021 and remains a highly exposed segment for the US plaintiff bar.