2023 Developments in U.S. Securities Fraud Class Actions Against Non-U.S. Issuers

March 13, 2024

Non-U.S. Companies Remain Targets for Securities Fraud Litigation

chart_Graph_work - 02-24 - R1

In 2023, plaintiffs filed 33 securities class action lawsuits against non-U.S. issuers, down by one from the 34 filings in 2022. This number indicates a continued decline in non-U.S. issuer filings, since a recent high of 88 filings in 2020.1

  • As was the case in 2022 and 2021, the Second Circuit continues to be the jurisdiction of choice for plaintiffs bringing securities claims against non-U.S. issuers, but this year by a slimmer margin. Roughly 45% of these 33 lawsuits (15) were filed in courts in the Second Circuit. A majority (12) of these lawsuits were filed in the Southern District of New York (“S.D.N.Y.”), with the three remaining Second Circuit lawsuits filed in the Eastern District of New York (“E.D.N.Y.”). Roughly 27% of the 33 lawsuits were filed in the Ninth Circuit (10), followed by six in the Third Circuit and one each in the Fourth and Fifth Circuits.
  • Continuing a trend in 2022 and 2021, most non-U.S. issuer lawsuits were against companies with headquarters and/or principal places of business in China. Of the 33 non-U.S. issuer lawsuits filed in 2023, 9 were against non-U.S. issuers with headquarters and/or principal places of business in China, followed by a tie for second between the United Kingdom (5) and Israel (5) and a three-way tie for third with Canada (2), Singapore (2), and Switzerland (2).
  • The Rosen Law Firm, P.A. reclaimed the top spot with the most first-in-court filings against non-U.S. issuers in 2023 (11), followed closely by Pomerantz LLP (10), and Glancy Prongay & Murray LLP (5). In 2022, the Rosen Law Firm took second place behind Pomerantz, after holding the lead from 2018 through 2021. The Rosen Law Firm was also appointed lead counsel in the most cases in 2023 (5), followed by Pomerantz (3), and Levi & Korsinsky, LLP (3).
  • The first and fourth quarters of 2023 proved equally active for filing securities class actions against non-U.S. issuers, with 10 cases filed in both Q1 and Q4. But the first half of 2023—Q1 and Q2—yielded most of the 2023 filings (19 of 33), due to a quiet third quarter with only four filings.
  • Although the 33 lawsuits spanned 18 different industries, the largest number of filings involved the software and programming industry (6), and the biotechnology and drugs and money center banks industries (4 each).

An examination of the types of cases filed in 2023 reveals the following substantive trends:

  • Six cases involved issues of regulatory compliance and licensure against companies headquartered in China (4), Uruguay (1), and Israel (1).
  • Five cases were filed against financial technology (“fintech”) companies, with two of those cases concerning the cryptocurrency market’s volatility.
  • Four cases were filed against biotechnology and pharmaceutical companies, including three companies focused on cancer research.
Filings by Location of Headquarters and/or Principal Place of Business

Although the overall number of securities class actions increased in 2023, the proportion of cases against non-U.S. issuers has remained relatively unchanged.

The filings make clear that a company does not need to be based in the United States to face potential securities class action liability in U.S. federal courts. Accordingly, it is imperative that non-U.S. issuers take steps to mitigate their risks in not only their home jurisdictions but also in the United States.

Non-U.S. issuers should be particularly cognizant when making disclosures or statements to:

  • ensure compliance with regulatory requirements; 
  • speak truthfully and disclose both positive and negative results; 
  • ensure that a disclosure regimen and processes are well-documented and consistently followed; 
  • work with counsel to ensure that a disclosure plan is adopted that covers disclosures made in press releases, SEC filings, and by executives; and
  • understand that companies are not immune to issues that may cut across all industries. 

Non-U.S. issuers should work with the company’s insurers and hire experienced counsel who specialize in and defend securities class action litigation on a full-time basis. Finally, to the extent that a non-U.S. issuer finds itself the subject of a securities class action lawsuit, the bases upon which courts have dismissed similar complaints in the past can be instructive.


1 Unless otherwise noted, the figures in this white paper are based on information reported by the Securities Class Action Clearinghouse in collaboration with Cornerstone Research, Stanford Univ., Securities Class Action Clearinghouse: Filings Database, Securities Class Action Clearinghouse (last visited Feb. 20, 2024). A company is considered a “non-U.S. issuer” if the company is headquartered and/or has a principal place of business outside of the United States. To the extent a company is listed as having both a non-U.S. headquarters/principal place of business and a U.S. headquarters/principal place of business, that filing was also included as against a non-U.S. issuer.