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Developments in U.S. Securities Fraud Class Action Lawsuits Against Non-U.S. Issuers - 2020 Summary
Despite unprecedented economic and societal changes, 2020 saw an uptick in securities class actions filed against non-U.S. issuers.
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- About 19% of the cases involved alleged misrepresentations regarding mergers and acquisitions.
- About 9% of the cases involved alleged misrepresentations in connection with regulatory requirements and/or approvals. This includes one case involving alleged misrepresentations in connection with a non-U.S. issuer’s COVID-19 antigen test.
- About 8% of the cases involved alleged misrepresentations in connection with the solicitation and sale of blockchain assets pursuant to an Initial Coin Offering.
- Plaintiffs filed a total of 88 securities class action lawsuits against non-U.S. issuers, compared with 64 in 2019, which our previous report on non-U.S. issuers revealed. The 88 from 2020 accounted for just over 27 percent of the total 324 securities class action lawsuits that year.
Top Non-U.S. Issuers by Location of Headquarters and/or Principal Place of Business
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Of the 28 complaints filed against companies headquartered in China, 22 of these complaints were brought against companies incorporated in the Cayman Islands.
Twelve of the non-U.S. issuers have corporate headquarters and/or principal places of business in Canada.
Non-U.S. Issuers by Market Capitalization
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The market capitalization of the non-U.S. issuers at the time at which the securities class actions were filed largely consisted of both smaller market cap companies (14 of 88) under US$250 million and larger market cap companies (23 of 88) over US$5 billion.
Non-U.S. Issuers by Industry
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While the suits cover a diverse range of industries, the majority of them involved biotechnology and medical equipment. A significant number of these suits were based on allegations relating to the non-U.S. issuer’s approval by or compliance with U.S. regulatory agencies.