To deliver independent and high-quality public company risk management data analytics solutions to protect Directors & Officers by enhancing transparency in the securities class action arena
About SAR: SAR is a highly specialized data analytics company focused on the independent quantification of securities litigation risks impacting Directors and Officers of U.S. and non-U.S. issuers that trade on the NYSE or NASDAQ. SAR provides verifiably independent settlement loss valuation estimates throughout the litigation lifecycle on securities claims that allege violations of the federal securities laws under Section 11, Section 12(a)(2), and Section 15 of the Securities Act of 1933, and under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. Our independent valuation expertise supports operational and financial resilience across the public D&O ecosystem. The Company serves and works with leading multi-national insurance companies, intermediaries, reinsurers, captives, and (casualty) ILS funds. SAR estimates of securities litigation risk, aggregate damages, and settlement loss valuations are rendered verifiably independent as they are quantified on an on-going basis by applying the courtapproved event study methodology with industry-accepted parameters and techniques. SAR does not render litigation consulting services. SAR data is licensed based on consumption according to D&O claim monitoring protocols, underwriting workflow needs, and actuarial loss data requirements.
GLOBAL SCA RULE
10b-5 EXPOSURE
Global SCA Rule 10b-5 Exposure Amounted to $451 Billion in the Second Quarter of 2025
Global exposure to Rule 10b-5 private securities-fraud litigation of U.S.-listed companies amounted to approx. $441 billion and $10 billion for U.S. and NonU.S. Issuers, respectively.i Global fraud-on-the-market exposure rose by 51.6% compared to 1Q’25, primarily driven by a 92.2% increase in exposure from alleged Rule 10b-5 violations involving U.S. Issuers.
SAR analyzed 35 securities class actions (“SCAs”) against U.S. public corporations that were sued for alleged violations of the federal securities laws under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, promulgated thereunder (the “Exchange Act”) during 2Q’25.ii SAR’s SCA data presented in this quarterly report excludes three SCAs filed this past quarter (see Appendix-1). $119.8 billion of exposure amounting from Faller v. UnitedHealth Group Inc. is excluded as investor plaintiffs voluntarily dismissed the claim.
Alleged market capitalization losses based on statistically significant residual stock price returns of U.S.-listed corporations amounted to $451.5 billion in 2Q’25, an increase of 51.6% from the last quarter’s global exposure of $297.8 billion. Approximately $44.3 billion, or 8.9% of investor plaintiffs’ alleged market capitalization losses, do not surpass statistical thresholds of stock price reaction to warrant inclusion in a certified SCA. As a result, $44.3 billion in alleged shareholder losses claimed during the second quarter of 2025 may not translate into potential aggregate damages to provide settlement recoveries for allegedly defrauded investors in the Defendant issuers’ common stock.
Global SCA Rule 10b-5 Litigation Exposure: Global SCA Rule 10b-5 Exposure reached a new all-time high in 2Q’25, exceeding the previous record of $335.8 billion set in 1Q’22. The record-breaking exposure was primarily driven by Tucker v. Apple Inc et al, which accounts for 81.7% of this quarter's total global exposure The case alone exhibits alleged market capitalization losses of $368.9 billion, which has a greater magnitude than any prior quarterly measure of Global SCA Rule 10b-5 Exposure. All-time high losses are accompanied by a near record-high exposure per alleged corrective disclosure. Losses per alleged stock drop stand at $6.3 billion in 2Q’25, a 136.1% increase relative to the preceding quarter On the other hand, exposure to Rule 10b-5 class action litigation against Non-U.S. issuers exhibited a substantial decline of $579 billion (or -85.0%) with respect to 1Q’25. This represents the second consecutive quarter of a marked decline in ADR SCA Rule 10b-5 Exposure.
Global Securities Class Action Rule 10b-5 Exposure
U.S. SCA RULE 10b-5 EXPOSURE
U.S. SCA Rule 10b-5 Exposure Amounted to $441 billion in the Second Quarter of 2025
U.S. exposure to Rule 10b-5 private securities-fraud litigation against U.S. Issuers increased by 92.2% during the second quarter of 2025.iii The increase in U.S. SCA Rule 10b-5 Exposure is primarily driven by one Exchange Act claim. Despite a quarter-over-quarter increase of $211.6 billion in alleged market capitalization losses, the observed filing frequency and the number of alleged corrective disclosures both decreased in 2Q’25. Alleged corrective disclosures decreased from 86 in 1Q’25 to 70 in 2Q’25, a reduction of 18.6%. Observed filing frequency declined from 51 Rule 10b-5 filings to 34.
SAR analyzed 34 securities claims against U.S. issuers that were sued for alleged violations of the Exchange Act in 2Q’25.iv U.S. SCA Rule 10b-5 Exposure (alleged market capitalization losses based on statistically significant residual stock price returns) of U.S. Issuers to claims that allege violations of the Exchange Act amounted to $441.3 billion.v
U.S. SCA Rule 10b-5 Litigation Exposure: Investor plaintiffs' alleged fraud-related market capitalization losses in 2Q’25 are primarily driven by Tucker v. Apple Inc. The case accounts for alleged market capitalization losses of $368.9 billion and contributed to a record-setting exposure against U.S. Issuers. Similarly, 2Q'25 exhibited a substantial increase in exposure per Exchange Act claim and losses per alleged stock drop compared to previous quarters. Exposure per claim increased from $4.5 billion in 1Q’25 to $13.0 billion in 2Q’25, a 188.2% increase. This marks an all-time high, surpassing the previous record of $11.8 billion set in 1Q’22. Similarly, losses per alleged drop climbed to $6.3 billion compared to 1Q’25 – the second highest level ever recorded. Notably, both metrics increased significantly despite a decline in observed filings and alleged corrective disclosures.
SCA Settlements as a Percentage of Defendant's Market Cap: So far in 2025, the median ratio of settlements to the market capitalization of defendant companies is more than three times the median for all Rule 10b-5 SCAs settled prior to 2025. Settlements as a percentage of market capitalizations appear to be increasing substantially.
U.S. SCA Rule 10b-5 Exposure $441.3B Alleged Shareholder Losses $485.6B
[1] Identified and analyzed first-filed SCA complaints that allege violations of Rule 10b-5. Excludes non-U.S. issuers that trade on U.S. exchanges through ADRs.
[2] U.S. SCA Rule 10b-5 Exposure is equal to investor plaintiffs alleged market cap. losses that may surpass back-end price impact thresholds based on exhibited residual stock price declines at the 95% confidence standard.
[3] The average aggregate market capitalization of U.S. issuers for the corresponding quarter.
[4] The ratio of U.S. SCA Rule 10b-5 Exposure to the aggregate market cap of U.S. issuers ([4] = [2] / [3]).
[5] Number of defendant U.S. issuers divided by the aggregate number of U.S. issuers.
U.S. SCA Rule 10b-5 Exposure Rate during the second quarter is at an all-time record of 0.72%. The prior record, set in the first quarter of 2022, stood at 0.59%. In contrast, U.S. SCA Rule 10b-5 Litigation Rate is at its lowest level since 2Q'23 when it last fell below the 1.0% mark. The aggregate market capitalization of U.S. Issuers rose from $59.7 trillion in 1Q’25 to $61.0 trillion in 2Q’25, reversing the decline reported in the previous quarter.
Rule 10b-5 Claim Deficiencies Against U.S. Issuers: Approximately $44.3 billion, or 9.1% of alleged shareholder losses against U.S. Issuers, do not surpass statistical thresholds of stock price reaction at the 95% confidence standard to warrant inclusion in a certified SCA. As a result, approximately $44.3 billion in alleged shareholder losses claimed during the second quarter of 2025 in first-filed SCAs against U.S. Issuers and certain directors and officers may not translate into potential aggregate damages to result in potential settlement recoveries.
Table 2: Econometric Summary of Residual Stock Price Reaction of Plaintiffs’ Alleged Corrective Disclosures Against U.S. Issuers
[1] Identified and analyzed first-filed SCA complaints that allege violations of Rule 10b-5. Excludes non-U.S. issuers that trade through ADRs.
[2] The number of alleged corrective disclosures identified in the sample of first-filed SCA complaints.
[3] Total U.S. SCA Rule 10b-5 Exposure for the identified sample of claims divided by the number of identified alleged corrective disclosures [2].
[4] The number of alleged corrective disclosures that do not exhibit a statistically significant one-day residual stock price return at the 95% confidence standard.
[5] The ratio of the number of alleged corrective disclosures that do not exhibit a statistically significant one-day residual stock price return at the 95% confidence standard to the total number of alleged corrective disclosures. ([5] = [4] / [2])
During 2Q’25, SAR analyzed 51 first-filed “stock-drop” SCAs filed against U.S. Issuers that allege violations of Rule 10b-5 via 101 claimed corrective events or truth-revealing disclosures.vi After analyzing and consolidating cases with seemingly related allegations against individual U.S. Issuers, SAR accounted for and analyzed 34 filed SCAs. A total of 70 alleged corrective disclosures have been claimed in the 34 first-filed SCAs.vii
The number of alleged stock drops decreased from 86 in 1Q’25 to 70 in 2Q'25. During 2Q’25, investor Plaintiffs alleged, on average, 2.1 corrective disclosures per first-filed SCA complaint, an increase of 22.1% relative to 1Q'25. Of the 70 corrective disclosures alleged during 2Q’25, the allegedly related residual stock price decline of 12 (17.1%) of them did not surpass statistical thresholds of stock price reaction at the
95% confidence standard, which is highly unfavorable for plaintiffs to successfully establish back-end price impact.viii
17.1% of investor Plaintiffs’ alleged stock drops in the sample of firstfiled class action complaints run afoul of the heightened pleading standards of loss causation because they lack statistical significance at the 95% confidence standard to merit potential aggregate shareholder damages after excluding non-company and non-fraud related factors.ix
The percentage of alleged corrective disclosures with no price reaction at the 95% confidence standard has ranged between 16.3% and 25.0% over the preceding twelve months. The alleged market capitalization losses per alleged stock increased to $6.3 billion in the second quarter of 2025.
SCA RULE 10b-5 EXPOSURE BY INDUSTRY SECTOR
FOR U.S. ISSUERS
Industry Sector Impact From Rule 10b-5 Litigation Exposure During the Second Quarter of 2025
The industries impacted the most based on alleged market capitalization losses that exhibited statistically significant alleged stock drop declines are Information Technology (83.8%), and Health Care (13.3%), which collectively accounted for 97% of U.S. SCA Rule 10b-5 Exposure in 2Q’25.
SAR analyzed 34 first-filed SCAs in 2Q’25, of which, 14 (or 41.2%) were filed against Health Care companies, six against Information Technology, and five (or 14.7%) against Industrials. Four sectors did not have any SCA filed against them - a reversal from 1Q'25 where all sectors had at least one SCA.
Rule 10b-5 Litigation Exposure Industry Trends: In 2Q’25, the Information Technology sector exhibited the highest U.S. SCA Rule 10b-5 Exposure per Exchange Act claim at $61.6 billion, followed by the Health Care sector at $4.2 billion. Losses per claim for the IT sector increased by $56.2 billion, almost exclusively driven by Tucker v. Apple Inc. Excluding this case, exposure per Exchange Act filing in the IT sector would be just $0.1 billion—highlighting the importance of evaluating cases individually rather than relying on generalized or proxy-based estimates. Out of the 11 sectors, only Energy and Information Technology exhibited an increase in Rule 10b-5 exposure per claim relative to 1Q'25.
The Health Care sector recorded the highest number of alleged corrective disclosures in 2Q’25, accounting for 28 out of 70 (or 40%) alleged drops. This reflects an increase from 24 alleged disclosures in 1Q’25 and marks the second consecutive quarter of rising disclosure activity in the sector. Information Technology follows with 12. It is the fourth consecutive quarter in which Health Care and Information Technology have ranked first and second, respectively, in the number of alleged corrective disclosures—highlighting the ongoing vulnerability of both sectors to fraud-on-the-market claims. Losses per alleged stock drop mirrored the same trend.
Table 3: U.S. SCA Rule 10b-5 Exposure by Industry Sector in 2Q’25
SCA
RULE 10b-5 EXPOSURE OF U.S. LARGE CAP CORPORATIONS
x, xi
Large Cap SCA Rule 10b-5 Exposure Amounted to $419.1 Billion During the Second Quarter of 2025
The average aggregate market capitalization of U.S. Large Cap corporations, defined as those with market capitalizations greater than $10 billion, was approx. $56.4 trillion.xii This is an increase of approximately 2.7% relative to 1Q’25. The return of the S&P 500, an index widely recognized as measuring the return to Large Cap companies, between April 1, 2025, and June 30, 2025, was 10.94%.
U.S. Large Cap Rule 10b-5 Litigation Exposure: U.S. Large Cap litigation exposure accounts for 95.0% of the aggregate market capitalization losses alleged against U.S. Issuers, and 92.8% of the global quantum. The sharp rise in overall U.S. SCA Rule 10b-5 Exposure in 2Q’25 is largely driven by a substantial increase in losses per alleged stock drop among U.S. Large Caps. U.S. Large Caps exhibited $20.0 billion in statistically significant market capitalization losses per alleged stock drop. This is an increase of $12.8 billion, or 178.7%, relative to the preceding quarter.
Table 4: Large Cap SCA Rule 10b-5 Exposure of U.S. Issuers
$55,987,618,180
U.S. Large Caps reported $59.9 billion in statistically significant market capitalization losses per Exchange Act claim. This represents an increase of approximately $48.5 billion, or 426.4%, relative to 1Q’25.
The substantial increases in both Large Cap SCA Rule 10b-5 Exposure and losses per alleged stock drop occurred despite relatively stable growth in the average aggregate market capitalization.
Disclosure: Due to changes in S&P Dow Jones Indices’ market capitalization eligibility criteria, for 2025 and onward, SAR’s Large Cap categories will encompass those stated to be typical by the Financial Industry Regulatory Authority (“FINRA”). “Large Cap” defendant companies are defined as those with market capitalizations greater than $10 billion dollars as of the beginning of the Class Period in the respective first identified complaint. Please see end note “x”.
xiii
Mid Cap SCA Rule 10b-5 Exposure Amounted to $18.6 Billion During the Second Quarter of 2025
The average aggregate market capitalization of U.S. Mid Cap corporations, defined as those with market capitalizations between $2 billion and $10 billion, was approximately $3.6 trillion, a decrease of 3.2% from the prior quarter.xiv The return of the S&P MidCap 400 between April 1, 2025, and June 30, 2025, was 6.71%.
U.S. Mid Cap Rule 10b-5 Litigation Exposure: Private Rule 10b-5 litigation exposure of U.S. Mid Caps accounts for 4.2% of the aggregate market capitalization losses alleged against U.S. Issuers, and 4.1% of the global quantum. This marks a decline of approximately $12.0 billion, or 39.1%, compared to the previous quarter. The drop represents a significant reduction in Mid Cap exposure as a percent of total aggregate market losses, which had accounted for 13.3% and 10.3% of U.S. and Global exposure, respectively, in 1Q’25.
Table 5: Mid Cap SCA Rule 10b-5 Exposure of U.S. Issuers
U.S. Mid Caps exhibited $1.4 billion in statistically significant market capitalization losses per Exchange Act claim. This represents a decrease of $479.3 million, or 25.1%, compared to 1Q’25.
U.S. Mid Caps reported $688.7 million in statistically significant market capitalization losses per alleged stock drop. This is a decrease of 30.1% relative to the preceding quarter. $18.6B
Disclosure: Due to changes in S&P Dow Jones Indices’ market capitalization eligibility criteria, for 2025 and onward, SAR’s Mid Cap categories will encompass those stated to be typical by the Financial Industry Regulatory Authority (“FINRA”). “Mid Cap” defendant companies are defined as those with market capitalizations greater than $2 billion dollars but less than $10 billion as of the beginning of the Class Period in the respective first identified complaint. Please see end note “x”. $1,371,464,197 1,306,257,762 3,759,671,545 3,639,631,670
SCA RULE 10b-5
Small Cap SCA Rule 10b-5 Exposure Amounted to $3.6 Billion During the Second Quarter of 2025
The average aggregate market capitalization of U.S. Small Cap corporations, defined as those with market capitalizations less than $2 billion, was approx. $971 billion in 2Q’25, a decrease of about 0.7% relative to 1Q’25.xvi The return of the S&P SmallCap 600 Index between April 1, 2025, and June 30, 2025, was 4.90%.
U.S. Small Cap Rule 10b-5 Litigation Exposure: U.S. Small Cap litigation exposure accounts for 0.81% of the aggregate market capitalization losses alleged against U.S. Issuers, and 0.79% of the global quantum. Relative to the preceding quarter, Private Rule 10b-5 litigation exposure decreased from $5.7 billion to $3.6 billion, a 37.4% reduction. Despite their relatively low dollar impact, U.S. Small Caps were the most frequent targets of Rule 10b-5 private securities fraud litigation in 2Q’25, with 14 (41.2%) of 34 observed SCA filings.
U.S. Small Caps incurred $256.1 million in statistically significant market capitalization losses per Exchange Act claim. This is a decrease of 19.6% relative to the preceding quarter.
U.S. Small Caps exhibited $163 million in statistically significant market capitalization losses per alleged stock drop. This represents a decrease of $41.7 million, or 20.4%, compared to 1Q’25.
Disclosure: Due to changes in S&P Dow Jones Indices’ market capitalization eligibility criteria, for 2025 and onward, SAR's Small Cap categories will encompass those stated to be typical by the Financial Industry Regulatory Authority (“FINRA”). “Small Cap” defendant companies are defined as those with market capitalizations less than $2 billion dollars as of the beginning of the Class Period in the respective first identified complaint. Please see end note “x”.
Table 6: Small Cap SCA Rule 10b-5 Exposure of U.S. Issuers
EXPOSURE
ADR SCA Rule 10b-5 Exposure Amounted to $10 Billion During the Second Quarter of 2025
U.S. exposure to Rule 10b-5 private securities-fraud litigation of Non-U.S. Issuers decreased by 85.0% during the second quarter of 2025 relative to the preceding quarter. The sharp decline in alleged market capitalization losses was primarily driven by a drop in observed filings—from four in 1Q’25 to just one in 2Q’25. The decline in SCAs filings was accompanied by a notable reduction in losses per alleged corrective disclosure. ADR SCA Rule 10b-5 Exposure per alleged corrective disclosures fell to $5.1 billion, a 62.5% decline.
SAR analyzed one securities claim against Non-U.S. issuers that was sued for alleged violations of the Exchange Act in 2Q’25.xvii ADR SCA Rule 10b-5 Exposure (alleged market capitalization losses based on statistically significant residual stock price returns) of Non-U.S. Issuers to claims that allege violations of the Exchange Act amounted to $10.2 billion.xviii
Non-U.S. Issuer Rule 10b-5 Litigation Exposure: Over the preceding twelve months, exposure against Non-U.S. Issuers has exhibited significant volatility, with ADR SCA Rule 10b-5 Exposure ranging from $7.0 billion to $113.9 billion. This volatility has been driven by wide fluctuations in both observed filings and alleged corrective disclosures. In 4Q’24, the number of alleged corrective disclosures against Non-U.S. Issuers rose sharply from eight to 15 but has since declined over the following two quarters. By 2Q’25, only two alleged corrective disclosures were recorded—the lowest level since 3Q’23. The variability in alleged corrective disclosures has directly impacted losses per alleged corrective disclosure, which have ranged from $0.9 billion to $13.6 billion over the past year.
Table 7: ADR SCA Rule 10b-5 Exposure of Non-U.S. Issuers
ADR Rule 10b-5 Exposure for Non-U.S. Issuers
Rule 10b-5 Claim Deficiencies Against Non-U.S. Issuers: All filings against Non-U.S. Issuers in 2Q’25 had econometric significance. In other words, 0.0% of alleged shareholder losses against Non-U.S. Issuers do not surpass statistical thresholds of stock price reaction to warrant inclusion in a certified SCA. The percentage of corrective disclosures with price impact deficiencies has ranged from 75% to 0% in the preceding year. Non-U.S. Issuers continue to exhibit more variability in corrective disclosures with price impact deficiencies than U.S. Issuers.
Table 8: Econometric Summary of Residual Stock Price Reaction to Plaintiffs'
Alleged Corrective
Disclosures of Non-U.S. Issuers
[1] First-filed and analyzed SCA complaints that allege violations of Rule 10b-5 against non-U.S. issuers that trade on U.S. exchanges through ADRs. Excludes U.S. issuers.
[2] The total number of alleged corrective disclosures identified in the sample of SCA complaints.
[3] The total number of alleged corrective disclosures that do not exhibit a statistically significant one-day residual stock price return at the 95% confidence standard. [4] The ratio of the number of alleged corrective disclosures that do not meet statistical thresholds of back-end price impact to the total number of alleged corrective disclosures. ([4] = [3] / [2]).
EMPIRICAL RESULTS OF RULE 10b-5 SETTLEMENT ESTIMATES
Empirical Results of Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages
The results of our on-going, independent empirical analyses on SCA Rule 10b-5 settlements indicate that SAR’s Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages continue to be statistically robust determinants of potential settlement amounts using a single explanatory variable.
Our empirical results demonstrate that our Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages (calculated around the time when the corresponding securities class action complaints are filed) alone explains approximately 61% of the variation in settlement amounts in simple univariate regressions xix Our results exhibit highly significant coefficient estimates indicating that a 10% increase in potential aggregate damages predicts an approximate 5.9% increase in the settlement amount. These results are robust and significantly more accurate than proxy-style damages estimates.xx
A proxy for damages claimed by investor plaintiffs may not be an accurate determinant in predicting Rule 10b-5 settlement outcomes because it does not apply the court-accepted event study methodology to effectively compute potential damages per share on a claimspecific basis.
$Ms Log Rule 10b-5 Settlements to Max. Potential Damages
R2 = 0.61
Max. Potentially Available Rule 10b-5 Aggregate Damages
When we add additional controls for the U.S. exchange, circuit court, and the plaintiff firm that represents the lead plaintiff, our Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages can explain approximately 76% of Rule 10b-5 settlement variation as reported by the R-squared measure, and approximately 66% by the adjusted R-squared measure, with the damage’s coefficient indicating that a 10% increase in estimated damages predicts an approximate 5.1% increase in the settlement amount.
Data Science Key Takeaway: The R-squared of SAR’s Estimate(s) of Maximum Potentially Available Rule 10b-5 Aggregate Damages with respect to settlements has surpassed the 60% milestone, following steady quarter-on-quarter increase since SAR began tracking.
Based on our robust empirical results on 229 settled Rule 10b-5 SCAs filed since June 2018, we computed the median settlement rates by taking the median quotient of claim-specific settlement amounts (as reported by Institutional Shareholder Services Securities Class Action Services) and our proprietary estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages.xxi
SAR estimates and tracks quarterly Rule 10b-5 Exchange Act median settlement rates to estimate more accurate potential settlement losses on a claim-specific basis. Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages are categorized into severity bands based on the magnitudes of claim-specific loss severity xxii
Table 9: SCA Rule 10b-5 Settlement Rates
The seven severity band ranges are based on SAR’s clustering analyses of our aggregate severity data and the relative frequency of complaints according to magnitude of estimated damages severity. The median settlement ranges of the bands are statistically distinct. We expect to further refine and add severity band ranges as our ratio population of settlement dollars to our Rule 10b-5 damages estimates expands and our statistical clustering analysis indicates meaningful distinction.
PLAINTIFF SECURITIES CLASS ACTION LAW FIRM
SAR presents this data and analysis to identify the leading cohort of top performing plaintiff securities class action law firms. To objectively evaluate plaintiffs’ counsel performance in a dynamic legal landscape, SAR utilized two sets of performance criteria to achieve a simple, yet robust, data-driven evaluation.
The first performance selection criterion is the frequency of attaining lead or co-lead counsel. The second is the aggregate settlement value on all settled cases in which a firm participated as lead, co-lead, liaison counsel, or additional counsel. This data is value-relevant to supplement a holistic evaluation of the magnitude of potential loss severity on active SCAs that allege violations of the Exchange Act according to the plaintiff law firms involved.
Primary Performance Factor: Frequency of Attaining Lead or Co-Lead
The Federal Judiciary has the power to assign lead or co-lead counsel privileges according to well-defined case precedent in the private enforcement regime of federal securities laws. To appoint the lead and/or co-lead law firms, the Courts place significant emphasis on the magnitude of trading losses allegedly caused by plaintiffs’ alleged securities fraud against issuers. Achieving lead or co-lead status on any federal securities class action assures the law firm(s) control over leadership, strategy, management, and most importantly – the percentage of the settlement fee award.
Most courts consider: "(1) the total number of shares purchased during the class period; (2) the net shares purchases during the class period (in other words, the difference between the number of shares purchased and the number of shares sold during the class period); (3) the net funds expended during the class period (in other words, the difference between the amount spent to purchase shares and the amount received for the sale of shares during the class period); and (4) the approximate losses suffered." ... While courts differ on the precise weight to apply to each factor, most courts agree that the fourth factor—the approximate losses suffered—is the most salient factor in selecting the lead plaintiff.
The magnitude of trading losses of the proposed lead plaintiff is a significant driver in the court’s selection criteria to decide which law firm(s) will ultimately lead the consolidated action. As a result, SAR’s primary performance selection criteria is the frequency of attaining lead or co-lead as determined by the Federal Judiciary.
Table 10 presents the top ten plaintiff securities class action law firms that exhibited the highest frequency of attaining lead or co-lead counsel in securities class actions that alleged violations of Rule 10b-5 during the preceding seven years.
Timber Hill LLC v. The Kraft Heinz Co. et al. in the U.S. District Court for the Northern District of Illinois
Secondary Performance Factor: Aggregate Settlement Amount on Participating Actions
The effectiveness of economic redress for allegedly defrauded investors in U.S. public companies is regularly evaluated based on the magnitude of aggregate settlements achieved by the participating law firms. As a result, SAR’s secondary performance selection criteria is the magnitude of aggregate settlements achieved by the participating law firms, whether or not they secured lead or co-lead status in the corresponding lawsuits.
Table 11 below presents the results of the top ten plaintiff securities class action law firms that exhibited the greatest aggregate settlements in SCAs that alleged violations of Rule 10b-5 during the preceding seven years.
Table 11: Plaintiff Law Firm Aggregate Settlement Rankings
Aggregate Settlement Rankings: The number of settled cases more than doubled compared to the preceding quarter from seven to 18 settlements. However, only half of all 10 plaintiff law firms that made the ranking based on aggregate settlements participated in this quarter’s settled cases.
Selection of Top Performing Plaintiff Securities Class Action Law Firms
Selection of the top performing plaintiff securities class action law firms involved identifying those with both the highest frequency of attaining lead and co-lead counsel and achieved the greatest aggregate settlement amounts on the sample of cases analyzed.
Table 12 presents the top plaintiff securities class action law firms identified according to SAR’s two sets of performance criteria. These law firms had the highest frequency of securing lead or co-lead status and achieved the greatest monetary recompense due to allegedly defrauded investors. This table ranks the law firms according to average settlement among 229 settled SCAs.
Table 12: Top Performing Securities Class Action Plaintiff Law Firms
Top Performing Plaintiff Securities Class Action Law Firms: The ranking of SAR’s top performing securities class action law firms did not change with respect to the preceding quarter. The top performing law firm in 2Q’25 continues to be Bernstein Litowitz Berger & Grossmann. It's average settlement increased from $92.9 to $94.1 million relative to 1Q’25. The second-ranked plaintiff law firm, Robbins Geller Rudman & Dowd, has a higher aggregate settlement, but its average settlement is lower, and is decreasing. In 1Q’25, the difference in average settlement between the first and second-ranked firms was $25.6 million. This difference increased to $31.1 million in 2Q’25, a 21.6% increase.
i Global SCA Rule 10b-5 Exposure amounts to the sum of U.S. Rule 10b-5 Exposure and ADR Rule 10b-5 Exposure estimates
ii This tally accounts for U.S. issuers of common stock and non-U.S. issuers that trade on U.S. exchanges through ADRs that are listed as defendants in first-filed SCA complaints filed during the second quarter of 2025 and allege shareholder damages. It also accounts for claims against such issuers in which Rule 10b-5 allegations were first made in amended filings during 2Q’25. A corporation that was sued a second or third time during the current quarter in non-amended filings is not accounted for in the current quarter’s tally. The tally excludes SCA complaints that were identified but not analyzed per Appendix-1.
iii Figures of Securities Class Action (SCA) Rule 10b-5 litigation exposure are based on identified and analyzed first-filed complaints for each claim filed during the corresponding quarter. They also include claims in which Rule 10b-5 allegations were first made in amended filings during the corresponding quarter. All federal SCA complaints are read by full-time human employees of SAR and screened for allegations that specifically allege violations of Rule 10b-5, define a specific Class Period, identify specific alleged misrepresentations, and allegedly related corrective disclosures. Proprietary non-ML and non-AI cloud-based technology is utilized and relied upon to capture, categorize, and database select constituent data components from each individual SCA complaint. Only the claimed stock price declines presented in the first-filed complaint against each defendant company are accounted for to estimate U.S. SCA Rule 10b-5 Exposure in this report. Measures of SCA exposure for each claim may increase or decrease as the case progresses through the class action life cycle. For purposes of this quarterly informative report, SCA Rule 10b-5 Exposure is not amended retroactively for cases that have been dismissed by the Court or voluntarily dismissed by plaintiffs.
iv This tally accounts for U.S. issuers of common stock that are listed as defendants in first-filed SCA complaints filed during the second quarter of 2025 and allege aggregate shareholder damages. It also includes claims in which Rule 10b-5 allegations were first made in amended filings during 2Q’25. A U.S. issuer of common stock that was sued a second or third time during the current quarter in non-amended filings is not accounted for in the current quarter’s tally. The tally excludes SCA complaints against U.S. issuers of common stock that were sued for alleged violations of the federal securities laws in a previous quarters. The tally also excludes cases that have been filed against international corporations that are listed on U.S. exchanges through American Depositary Receipts (ADRs). The tally excludes SCA complaints that were identified but not analyzed per Appendix-1
v A public corporation’s exposure to alleged violations of Rule 10b-5 is estimated by tracking the cumulative decline in market capitalization during a single market trading session (close-to-close event windows) that correspond with the timing of the claimed alleged corrective disclosures that surpass statistical thresholds of indirect price impact at the 95% confidence standard and are presented in a first–filed SCA complaint. See, Halliburton III 309 F.R.D.
251 (N.D. Tex. July 25, 2015) and Exxon 2023 WL 5415315 (N.D. Tex. Aug. 21, 2023). This figure excludes market capitalization declines of non-U.S. issuers that have been sued for alleged violations of the U.S. federal securities laws and trade on U.S. exchanges through American Depositary Receipts (ADRs).
vi SAR relies on Docket Alerts and Court Wire notifications attained from Thomson Reuters Westlaw. SAR professionals actively monitor and track case dockets to attain newly filed and amended SCA complaints.
vii This tally of alleged corrective disclosures includes those from SCA complaints first-filed in 2Q’25 and amended filings in which Rule 10b-5 allegations were first made in 2Q’25 against U.S. issuers of common stock. The tally excludes SCA complaints against companies for which there are relevant first-filed complaints in prior quarters.
viii See, Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014); Erica P. John Fund, Inc. v. Halliburton Co., 309 F.R.D. 251 (N.D. Tex. 2015); Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System, 141 S. Ct. 1951 (2021); Arkansas Teacher Retirement System v. Goldman Sachs Group, Inc., 77 F.4th 74 (2d Cir. 2023).
ix See, Dura Pharmaceuticals, Inc. v. Broudo, No. 03-932, 2005 WL 885109 (2005).
x On January 2, 2025, S&P Dow Jones Indices announced a revision of their large, mid, and small eligibility criteria: https://press.spglobal.com/2025-01-02-S-P-Dow-Jones-Indices-Announces-Update-to-S-P-Composite-1500Market-Cap-Guidelines. In light of the changes of S&P Dow Jones Indices market capitalization eligibility criteria, going forward SAR’s categorization of “Large Cap”, “Mid Cap,” and “Small Cap” companies will encompass the market capitalization size cutoffs stated by the Financial Industry Regulatory Authority (“FINRA”) to be typical: https://www.finra.org/investors/insights/market-cap
xi Large cap companies are the subset of defendant corporations with market capitalizations greater than $10 billion at the start of the Class Period alleged in the first-filed complaint.
xii This is the average total market capitalization of U.S. issuers of common stock that are listed on the NYSE or Nasdaq exchanges with market capitalizations greater than $10 billion between April 1, 2025 and June 30, 2025.
xiii Mid cap companies are the subset of defendant corporations with market capitalizations greater than $2 billion and less than $10 billion at the start of the Class Period alleged in the first-filed complaint.
xiv This is the average total market capitalization of U.S. issuers of common stock that are listed on the NYSE or Nasdaq exchanges with market capitalizations between $2 billion and $10 billion between April 1, 2025 and June 30, 2025.
xv Small cap companies are the subset of defendant corporations with market capitalizations less than $2 billion at the start of the Class Period alleged in the first-filed complaint.
xvi This is the average total market capitalization of U.S. issuers of common stock that are listed on the NYSE or Nasdaq exchanges with market capitalizations less than $2 billion between April 1, 2025 and June 30, 2025.
xvii
xvii This tally includes both SCA complaints against non-U.S. issuers that trade on U.S. exchanges first-filed in the current quarter and claims in which Rule 10b-5 allegations were first made in amended filings during the current quarter. A non-U.S. issuer of ADRs that was sued a second or third time during the current quarter is not accounted for in the current quarter’s tally. The tally excludes SCA complaints that were identified but not analyzed per Appendix-1
xviii A non-U.S. issuer’s exposure to alleged violations of Rule 10b-5 is estimated by tracking the cumulative decline in market capitalization during open market trading sessions that correspond with the timing of the claimed alleged corrective disclosures that surpass statistical thresholds of indirect price impact and are presented in a first-filed SCA complaint.
xix These results are based on a sample of 229 recently settled SCAs, and exclude settled SCAs that allege violations of both the Exchange Act and Securities Act. These specific performance metrics are based on log-log regressions that exclude the few settled cases for which Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages are zero, due to all of the alleged stock drops exhibiting a non-statistically significant residual stock price decline at the 95% confidence standard and greatly prohibiting the determination of back-end stock price impact, in accordance with the Supreme Court ruling, in Arkansas Teachers Retirement System v. Goldman Sachs, made effective June 21, 2021. Non log-log regressions that include these fully deficient securities claims that settled for a monetary sum perform similarly in terms of their explanatory power.
xx The applied methodology for accumulating maximum potential alleged artificial inflation that investors claim is embedded in the defendant’s price of common stock, is the industry-accepted constant dollar method. Aggregate market data supplied by S&P Global Market intelligence is used to compute an appropriate level of daily effective float by taking into consideration and accounting for the effects of insider holdings and short interest on a daily basis throughout the corresponding class period based on the allegations of the corresponding class action complaint. For purposes of this informative quarterly report, no reduction to issue-specific float is made to account for institutional investor trading volume that may not be affected by and during investor plaintiffs alleged class period. A refined estimate of effective float may be computed in a litigation-specific context to control for institutional holdings that may not warrant inclusion in the estimation of the defendant’s effective float for a more accurate estimation of Maximum Potentially Available Rule 10b-5 Aggregate Damages. An adjustment to exchange-reported trading volume is made to account for common stock traded by designated market-makers or broker dealers who are acting as market-makers. Other specific refinements to exchange-reported volume may be made in a litigation-specific context based on data attained through discovery, for example when tracing issues may be present. The estimation of allegedly damaged shares during the operative class periods are made by applying a precalibrated, and industry-accepted two-trader model with static model inputs for each of the respective investor cohorts. The use of an industry-accepted quantitative model is a widely accepted technique used in securities class action litigation by established Plaintiff and Defense experts to estimate the number of alleged and potentially damaged shares because class counsel may not have the ability to attain the entire universe of trading records of all participants in the market that bought and sold publicly traded common stock of the corresponding share class in the U.S.-listed company during investor plaintiffs alleged inflationary period. The Estimate of Maximum Potentially Available Rule 10b-5 Aggregate Damages is based on the attribution of 100% of the residual stock price decline for each alleged corrective disclosure that exhibited a statistically significant residual stock price decline at the 95% confidence standard and using a close-to-close, single trading session event window. The limitation to maximum potentially attributable artificial stock price inflation that investor plaintiffs allege to be embedded in the price of common stock may be refined in litigation-specific circumstances based on the results of news discovery analyses to determine the magnitude of potential confounding information disclosed to participants in the market on the affected day. The Estimate of Maximum Potentially Available Rule 10b-5 Aggregate Damages applies Section 21D(e) of the Private Securities and Litigation Reform Act of 1995 (PSLRA) 90-day look-back limitation on damages on the final alleged corrective disclosure that exhibited a statistically significant residual stock price decline at the 95% confidence standard and using a close-to-close, single trading session event window. In a litigation-specific circumstance, the 90-day look-back limitation to aggregate damages may applied and extended on all surviving alleged corrective disclosures that may exhibit back-end price impact which may further reduce the Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages.
xxi To maintain high standards of quality and objectivity in estimating banded median settlement rates on settled Rule 10b-5 claims, SAR reconciles the operative class period and corresponding alleged corrective disclosures with those presented in the Plan of Allocation post settlement approval when it is made publicly available.
xxii SAR’s Estimate(s) of Maximum Potentially Available Rule 10b-5 Aggregate Damages for each identified case and its respective settlement amount are adjusted for inflation by conversion to 2025 dollar equivalents for the purposes of estimating median band settlement rates. The inflation adjustment for Estimate(s) of Maximum Potentially Available Rule 10b-5 Aggregate Damages is based on the end of Class Period of the operative complaint.
The following list comprises Rule 10b-5 Exchange Act SCAs filed during 2Q’25 against U.S. issuers of common stock or ADRs but not analyzed by SAR due to two primary factors. Either there is insufficient pricing data to conduct a multivariate regression in accordance with SAR’s data analytics standards of quality control, and/or the securities claims allege potentially novel theories of Rule 10b-5 liability.
* This claim has been excluded from the aggregation of market capitalization losses on first-filed complaints because it was voluntarily dismissed on May 29, 2025.
Sources: ISS SCAS, FINRA, S&P Global Market Intelligence, S&P Dow Jones Indices, Thomson Reuters, SAR Platform as of June 30, 2025.
Any reprint of the information or figures presented in this quarterly report should reference SAR. Please direct any technical inquiries to Stephen Sigrist, SVP of Data Science, at 202.891.3652 or stephen@sarlit.com.
SAR is a pioneer in public company risk management data analytics solutions. The company relies on specialized data science and courtapproved methodologies to quantify the securities litigation risk of U.S. and non-U.S. issuers listed on the NYSE and NASDAQ.
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For any technical inquiries contact Stephen Sigrist, Senior Vice President of Data Science.
Stephen Sigrist Senior Vice President 202.891.3652 stephen@sarlit.com
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