2016 top takeaways from the tide
With 276 class actions filed, 2016 was the fourth consecutive year in which securities litigation increased; and it was the single greatest year-over-year increase in more than a decade.
- Dramatic increase in volume of newly filed federal M&A class actions. As a result of two key rulings in the Delaware Court of Chancery discouraging the filing of "Disclosure Only" cases in that court, there was a substantial increase in M&A class actions filed in federal court in 2016.
- 163% year over year increase in cases alleging improper or illegal activities. This includes allegations of illegal kickback payments, price manipulation in violation of antitrust laws, or various forms of fraud.
- Increased enforcement to match. SEC enforcement actions reached a single year high, including the most ever cases involving allegations of FCPA violations.
- Health industry dominates. Companies in health industries represent highest number of new class action filings. The industry faces major changes that may lead to further securities litigation including legislative and policy changes and new forms of regulation as the industry pushes into the Internet of Things
- Cyber enters the stage. While we've previously observed derivative actions tied to cyber attacks, for the first time we see a securities class action tied to a major cyber event.
- What will the next year bring? Many changes are in store for this year, including the definition of the new administration's enforcement priorities, the future of U.S. trade policy, and outcome of tax, health, and environmental legislation under debate. We look forward to what may come in the year ahead.