Developments in U.S. Securities Fraud Class Action Lawsuits Against Non-U.S. Issuers - 2020 Summary

- 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.

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.

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.

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.