SAR Rule 10b-5 Exposure Report 2Q 2024

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GLOBAL SCA RULE

10b-5 EXPOSURE

Global SCA Rule 10b-5 Exposure Amounted to $172 Billion in the Second Quarter of 2024

Global exposure to Rule 10b-5 private securities-fraud litigation of U.S.-listed companies amounted to $169 billion and $3 billion for U.S. and Non-U.S. Issuers, respectively.i Global fraud-on-the-market exposure increased by 52.0% relative to 1Q’24, driven by a 60.9% increase in alleged market capitalization losses against U.S. Issuers.

SAR analyzed 52 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’24.ii SAR’s data presented in this quarterly report excludes one SCA filed this past quarter (see Appendix-1).

Alleged market capitalization losses based on statistically significant residual stock price returns of U.S.-listed corporations amounted to $171.8 billion in 2Q’24, an increase of 52.0% from last quarter’s global exposure of $113.1 billion. Approximately $15.3 billion, or 8.2%, 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, $15.3 billion in alleged market capitalization losses claimed during the second quarter of 2024 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: A material increase in exposure of Rule 10b-5 private securities-fraud litigation during 2Q’24 has disrupted the short-term stabilization exhibited during the preceding year. Despite a relatively modest increase in filing frequency, the observed quarter-over-quarter increase in alleged market capitalization losses against defendant issuers is material. Securities litigation risk may likely increase prior to year-end, once a profit-taking correction impacts the U.S. equity markets and drives an increase in frequency and severity of Adverse Corporate Events

Global Securities Class Action Rule 10b-5 Exposure

U.S. SCA RULE

10b-5 EXPOSURE

Alleged Market Capitalization Losses of U.S. Issuers Amounted to $169 Billion in the Second Quarter of 2024

Exposure to Rule 10b-5 private securities-fraud litigation against U.S. Issuers increased by 60.9% during the second quarter of 2024.iii Alleged market capitalization losses per alleged stock drop increased by 54.7% on an almost equal sample of alleged corrective disclosures (75 and 78 during 1Q'24 and 2Q'24, respectively). The material increase in securities litigation exposure during a peak U.S. equity market is anomalous, and driven by a material increase in the magnitude of the stock price declines on alleged corrective disclosures. These observations indicate that aggregate market capitalization losses in 2024 may likely eclipse 2023 when the swell in U.S. equity valuations subsides during the second half of the year.

SAR analyzed 49 securities claims against U.S. issuers that were sued for alleged violations of the Exchange Act in 2Q’24 iv U.S. SCA Rule 10b-5 Exposure of U.S. issuers (alleged market capitalization losses based on statistically significant residual stock price returns) to claims that allege violations of the Exchange Act amounts to $169.1 billion.v

U.S. SCA Rule 10b-5 Litigation Exposure: Observed market capitalization losses during the second quarter indicate a clear reversal in stabilization of securities litigation exposure against U.S. Issuers. 2Q’24 exhibited an increase of 60.9% in alleged market capitalization losses per private Rule 10b-5 claim. This is in-line with an increase of 54.7% in alleged market capitalization losses per alleged stock drop. There is a high degree of certainty that potential loss severity for the surviving cohort of current vintage securities claims may be materially higher based on the observed magnitude of stock price declines on alleged corrective disclosures. The average settlement in observed fraud-on-the-market claims increased by 9.0% thus far in 2024 relative to the second half of 2023.

Table 1: U.S. SCA Rule 10b-5 Exposure of 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 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.

Alleged market capitalization losses against U.S. Issuers amounted to 0.3% of the aggregate market capitalization. This is the highest U.S. SCA Rule 10b-5 Exposure Rate claimed against U.S. defendant issuers during a record-setting equity market that exceeds $55 trillion. A break from peak U.S. equity markets may likely lead to an increase in market capitalization losses of defendant issuers based on the increasing magnitude of stock price declines on alleged corrective disclosures.

U.S. Issuers

Rule 10b-5 Claim Deficiencies Against

U.S. Issuers: Approximately $8.1 billion, or 4.6%, of alleged market capitalization 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 $8.1 billion in alleged market capitalization losses claimed during the second quarter of 2024 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 for authorized claimants.

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’24, SAR analyzed 58 first-filed “stock-drop” SCAs filed against U.S. Issuers that allege violations of Rule 10b-5 via 102 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 49 filed SCAs. A total of 78 alleged corrective disclosures have been claimed in the 49 first-filed SCAs vii

The number of alleged stock drops increased from 75 in 1Q’24 to 78 in 2Q’24, an increase of 4.0%. During 2Q’24, investor Plaintiffs alleged, on average, 1.6 corrective disclosures per first-filed SCA complaint. Of the 78 corrective disclosures alleged during 2Q’24, the allegedly related residual stock price decline of 16 (21%) 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

21% of investor Plaintiffs’ alleged stock drops in the sample of first-filed 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 fluctuated between 19% and 24% over the preceding twelve months. The alleged market capitalization losses per alleged stock drop remained steady for the past three quarters, but increased by 54.7% to $2.2 billion during the second quarter of 2024.

BY INDUSTRY SECTOR FOR U.S. ISSUERS

Alleged Market Capitalization Losses by Industry Sector During the Second Quarter of 2024

The industries impacted most based on alleged market capitalization losses that exhibited statistically significant alleged stock drop declines are Materials (31.2%), F.I.R.E. (25.6%), and Electronics, Hardware and Semiconductor (22.0%), which collectively accounted for 78.9% of U.S. SCA Rule 10b-5 Exposure in 2Q’24.

Out of the 49 first-filed SCAs in 2Q'24, eleven (22.5%) were filed against Software companies, eight (16.3%) against Pharma/Biotech, and six against Electronics, Hardware and Semiconductor companies.

Rule 10b-5 Litigation Exposure Industry Trends: During the preceding twelve months, the industries with the greatest U.S. SCA Rule 10b-5 Exposure have been Software, F.I.R.E, and Materials. Electronics, Hardware and Semiconductor sector has exhibited the greatest litigation exposure volatility quarter-over-quarter during the salient period.

[6] = [3] / [5].

SCA RULE 10b-5

EXPOSURE OF U.S. LARGE CAP CORPORATIONSx

Alleged Market Capitalization Losses of U.S. Large Caps Amounted to $162.5 Billion During the Second Quarter of 2024

The average aggregate market capitalization of U.S. Large Cap corporations, based on the market capitalization range of the S&P500 Index during 2Q’24, was $53.7 trillion.xi This is an increase of approximately 6.7% relative to 1Q’24. The return of the S&P 500 Index between April 1, 2024 and June 30, 2024 was 4.3%.

U.S. Large Cap Rule 10b-5 Litigation Exposure: Market capitalization losses alleged against U.S. Large Caps accounts for 96.1% of the aggregate claimed against U.S. Issuers, and 94.6% of the global quantum. The second quarter exhibited a reversal of a stabilizing trend in securities litigation exposure against U.S. Large Caps. Observed filings and Rule 10b-5 exposure of U.S. Large Caps increased materially –the latter by 67.0%. The increase in exposure is driven by a 22.4% increase in alleged market capitalization losses per alleged stock drop against U.S. Large Caps.

U.S. Large Caps exhibited $6.8 billion in statistically significant market capitalization losses per private Rule 10b-5 claim. This is a decrease of 2.6% relative to the preceding quarter. During the preceding twelve months, the mean market capitalization losses per private Rule 10b-5 claim amounted to $6.1 billion.

U.S. Large Caps exhibited $3.6 billion in statistically significant market capitalization losses per alleged stock drop. This is an increase of 22.4% relative to the preceding quarter. During the preceding twelve months, the mean market capitalization losses per alleged stock drop amounted to $2.9 billion.

SCA RULE 10b-5 EXPOSURE OF U.S. MID CAP CORPORATIONS

Alleged Market Capitalization Losses of U.S. Mid Caps Amounted to $2.8 Billion During the Second Quarter of 2024

The average aggregate market capitalization of U.S. Mid Cap corporations, based on the market capitalization range of the S&P MidCap 400 Market Index during 2Q’24, was $1.40 trillion, a slight decrease of 0.6% from the prior quarter.xiii The return of the S&P MidCap 400 between April 1, 2024 and June 30, 2024 was -3.5%.

xii 0.64% 0.20%

U.S. Mid Cap Rule 10b-5 Litigation Exposure: Private Rule 10b-5 litigation exposure of U.S. Mid Caps accounts for 1.6% of the aggregate market capitalization losses alleged against U.S. Issuers, and 1.6% of the global quantum. Alleged market capitalization losses against U.S. Mid Caps exhibited a modest decline of 2.2% relative to 1Q’24 even though observed filing frequency declined by almost half. The exposure per claim increased by 71.1% and market capitalization losses per alleged stock drop increased by 154.3% relative to 1Q’24.

Table 5: Mid Cap SCA Rule 10b-5 Exposure of U.S. Issuers

U.S. Mid Caps exhibited $693.6 million in statistically significant market capitalization losses per private Rule 10b-5 claim. This is a material increase of 71.1% relative to the preceding quarter. During the preceding twelve months, the mean market capitalization losses per private Rule 10b-5 claim amounted to $709.3 million.

U.S. Mid Caps exhibited $554.9 million in statistically significant market capitalization losses per alleged stock drop. This is a material increase of 154.3% relative to the preceding quarter. During the preceding twelve months, the mean market capitalization losses per alleged stock drop amounted to $396 million.

SCA RULE 10b-5

EXPOSURE OF U.S. SMALL CAP CORPORATIONSxiv

Alleged Market Capitalization Losses of U.S. Mid Caps Amounted to $3.8 Billion During the Second Quarter of 2024

The average aggregate market capitalization of U.S. Small Cap corporations, based on the market capitalization range of the S&P SmallCap 600 Market Index during 2Q’24, was $816 billion, a decrease of about 5.2% relative to 1Q’24.xv The return of the S&P SmallCap 600 Index between April 1, 2024 and June 30, 2024 was -3.1%.

0.47%

U.S. Small Cap Rule 10b-5 Litigation Exposure: Private Rule 10b-5 securities litigation exposure against U.S. Small Caps has exhibited the least quarter-over-quarter volatility among the three cohorts of U.S. Issuers. During the preceding year, Rule 10b-5 Exposure Rate of Small Caps has hovered at 0.4%, on average. This is the third consecutive quarter that market capitalization losses claimed against U.S. Small Caps has exceeded U.S. Mid Caps.

Table 6: Small Cap SCA Rule 10b-5 Exposure of U.S. Issuers

U.S. Small Caps exhibited $181 million in statistically significant market capitalization losses per private Rule 10b-5 claim. This is a significant decrease of 33.8% relative to the preceding quarter. During the preceding twelve months, the mean market capitalization losses per private Rule 10b-5 claim amounted to $229 million.

U.S. Small Caps exhibited $136 million in statistically significant market capitalization losses per alleged stock drop. This represents a decline of 20.0% relative to the preceding quarter. During the preceding twelve months, the mean market capitalization losses per alleged stock drop amounted to $140 million.

ADR SCA RULE

10b-5 EXPOSURE

Alleged Market Capitalization Losses of Non-U.S. Issuers Amounted to $3 Billion During the Second Quarter of 2024

Exposure to Rule 10b-5 private securities-fraud litigation of Non-U.S. Issuers decreased by 65.5% during the second quarter of 2024 relative to the

preceding quarter. During the preceding twelve months, the aggregate market capitalization of Non-U.S. Issuers peaked in the second quarter of 2024 at $29.1 trillion.xvi Data indicate that Rule 10b-5 private securities-fraud litigation exposure of Non-U.S. Issuers has ranged between 0.01% and 0.03% in the past twelve months.

SAR analyzed three securities claims against Non-U.S. issuers that were sued for alleged violations of the Rule 10b-5 in 2Q’24.xvii ADR SCA Rule 10b-5 Exposure of non-U.S. Issuers (alleged market capitalization losses based on statistically significant residual stock price returns) to claims that allege violations of Rule 10b-5 amounted to $2.7B.xviii

Non-U.S. Issuer Rule 10b-5 Litigation Exposure: Quarter-over-quarter litigation exposure volatility against Non-U.S. Issuers continues. The quarter-over-quarter range of market capitalization losses claimed against Non-U.S. Issuers hovered between $1.5 billion and $9.3 billion during the preceding twelve months.

ADR Rule 10b-5 Exposure for Non-U.S. Issuers

Rule 10b-5 Claim Deficiencies Against Non-U.S. Issuers: Approximately $7.2 billion, or 72.4% of alleged shareholder losses against NonU.S. issuers, do not surpass statistical thresholds of stock price reaction to warrant inclusion in a certified SCA. As a result, approximately $7.2 billion of alleged market capitalization losses claimed in first-filed securities claims against Non-U.S. Issuers and certain directors and officers may not translate into potential aggregate damages that may result in settlement recoveries for authorized claimants.

Table 8: Econometric Summary of Residual Stock Price Reaction to Plaintiffs' Alleged

[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]).

[5] The ratio of the number of alleged corrective disclosures that do not exhibit a statistically significant one-day residual

to the total number of alleged corrective disclosures. ([5] = [4] / [2])

SAR identified three Rule 10b-5 securities claims against non-U.S. issuers. Although the observed filing frequency remained the same in 2Q’24 relative to the preceding quarter, there was a substantial decrease of $5.2 billion in market capitalization losses against Non-U.S. Issuers.

EMPIRICAL RESULTS OF RULE 10b-5 SETTLEMENT ESTIMATES

Empirical Results of Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages

The results of SAR's 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.

SAR's empirical results demonstrate that 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 56% of the variation in settlement amounts in simple univariate regressions.xix Results exhibit highly significant coefficient estimates indicating that a 10% increase in potential aggregate damages predicts an approximate 5.7% increase in the settlement loss 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 claim-specific basis.

Log

Rule 10b-5 Settlements to Max. Potential Damages

Potentially Available Rule 10b-5 Aggregate Damages

When additional controls are added for the U.S. exchange, circuit court, and the plaintiff firm that represents the lead plaintiff, Estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages can explain approximately 79% of Rule 10b-5 settlement variation as reported by the R-squared measure, and approximately 67% by the adjusted R-squared measure, with the damage’s coefficient indicating that a 10% increase in estimated damages predicts an approximate 4.7% increase in the settlement amount.

Data Science Key Takeaway: The explanatory power of SAR's proprietary Estimate(s) of Maximum Potentially Available Rule 10b5 Aggregate Damages continues to increase with the number of observed settlements. SAR's r-squared on this single explanatory variable has consistently increased year-over-year since 2022.

Rule 10b-5 Private Securities-Fraud Litigation Settlement Rates

Based on robust empirical results on 184 settled Rule 10b-5 SCAs filed since June 2018, SAR 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 SAR's proprietary estimates of Maximum Potentially Available Rule 10b-5 Aggregate Damages.

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.

Table 9: SCA Rule 10b-5 Settlement Rates

The six severity band ranges are based on SAR’s clustering analyses of aggregate severity data and the relative frequency of complaints according to the magnitude of estimated damages severity. The median settlement ranges of the bands are statistically distinct. SAR expects to further refine and add severity band ranges as the ratio population of settlement dollars to Rule 10b-5 damages estimates expands and statistical clustering analysis indicates meaningful distinction.

Data Science Key Takeaway: Despite considerable variation in private Rule 10b-5 securities litigation exposure (market capitalization losses) per claim and per alleged stock drop, robust data and analysis indicate that actual observed settlement rates decline with increasing Estimate(s) of Maximum Potentially Available Rule 10-5 Aggregate Damages.

SAR tracks this data and analysis to independently 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 criteria 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 five and a half years.

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 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 five and a half years.

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 below presents the top plaintiff securities class action law firms 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 authorized claimants. This table ranks the law firms according to average settlements among 184 settled SCAs.

Table 12: Top Performing Securities Class Action Plaintiff Law Firms

Top Performing Plaintiff Securities Class Action Law Firms: Based on SAR's performance criteria, the top plaintiff securities class action law firms have remained largely stable compared to the preceding quarter. The top two performing law firms reversed their order between 1Q'24 and 2Q'24. This was driven by Kessler Topaz Meltzer & Check’s decrease in average Rule 10b-5 settlements from $115.50 to $97.50, a 15.58% reduction. The aggregate settlements increased across the board for all but two firms, suggesting an active role for all SAR-identified top performing firms. No new law firms entered the ranking during the salient period.

Sources: ISS SCAS, FINRA, S&P Global Market Intelligence, S&P Dow Jones Indices, Thomson Reuters, SAR Platform as of June 30, 2024.

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 court-approved methodologies to quantify the securities litigation risk of U.S. and non-U.S. issuers listed on the NYSE and NASDAQ.

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 2024 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’24. 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 2024 and allege aggregate shareholder damages. It also includes claims in which Rule 10b-5 allegations were first made in amended filings during 2Q’24. 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’24 and amended filings in which Rule 10b-5 allegations were first made in 2Q’24 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 Large cap corporations are the sub-set of defendant corporations that have market capitalizations within the range of the greatest and least market capitalization value of the constituent members of the S&P 500 Market Index at the time of the start of the Class Period alleged in the first-filed complaint.

xi 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 $3.7 billion between April 1, 2024, and June 28, 2024.

xii Mid cap corporations are the sub-set of defendant corporations that have market capitalizations within the range of the greatest and least market capitalization value of the constituent members of the S&P MidCap 400 Market Index at the time of the start of the Class Period alleged in the first-filed complaint.

xiii 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 $1.26 and $3.7 billion between April 1, 2024, and June 28, 2024.

xiv Small cap corporations are the sub-set of defendant corporations that have market capitalizations within the range of the greatest and least market capitalization value of the constituent members of the S&P SmallCap 600 Market Index at the time of the start of the Class Period alleged in the first-filed complaint.

xv 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 $1.26 billion between April 1, 2024, and June 28, 2024.

xvi Figures of ADR Securities Class Action (SCA) Rule 10b-5 Exposure are based on both first-filed and analyzed complaints for each claim filed during the corresponding quarter and claims in which 10b-5 allegations were first made in amended filings during the corresponding quarter.

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 184 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 pre-calibrated, 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.

Appendix-1: Rule 10b-5 Exchange Act SCAs Identified But Not Analyzed in 2Q’24

The following list comprises Rule 10b-5 Exchange Act SCAs filed during 2Q’24 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.