New York: A Litigation: Securities Overview

2026 Securities Litigation Trends

Over the past year, the federal securities docket has mirrored an increasingly volatile global market. Although AI-related suits took center stage in 2025, new filings generally shared a common impetus: shifting disclosure practices and heightened regulatory uncertainty. Doctrinally, courts deepened long-standing schisms on some issues even as they offered much-needed clarity on others. This period of flux sets a complex stage for 2026. Below, we highlight topics that will continue to shape securities litigation strategy and jurisprudence in the year ahead.

The Importance of AI Risk Disclosures

As AI moves from buzzword to boardroom priority, securities class actions increasingly target “AI-washing” – claims that are premised on companies allegedly misrepresenting their AI capabilities. Recent cases illustrate this trend. For example, in In re Opendoor Technologies Inc Securities Litigation, No 22-CV-1717, 2024 WL 2153529 (D Ariz 14 May 2024), plaintiffs challenged statements about the superiority of the company’s AI-powered pricing algorithm. In In re Upstart Holdings, Inc Securities Litigation, No 22-CV-2935, 2025 WL 2772475 (SD Ohio 29 September 2025), plaintiffs challenged defendant’s statements about the advantages of its AI-powered underwriting model. The surge in AI-related filings has received a mixed reception from courts, many of which appear skeptical as to whether plaintiffs can adduce facts in support of their claims that AI-related statements were false or misleading. 

For issuers and their counsel, the takeaway is clear: to mitigate litigation risk, AI-related disclosures must be disciplined, supportable and consistent across Securities and Exchange Commission (SEC) filings, earnings calls, investor presentations and marketing materials. The pressure to get this right is mounting. A 2025 Conference Board/ESGAUGE analysis found that 72% of S&P 500 companies disclosed material AI risks in 2025, up from 12% in 2023 – meaning that as more companies enhance AI disclosures they become susceptible to increased scrutiny. Companies that differentiate between pilot-stage and deployed tools, and disclose risks calibrated to the maturity of their technology, will be far better positioned to secure early dismissal of a securities class action than issuers who do not.

Divergence on Class Certification Post-Goldman

Another developing facet of securities litigation concerns class certification. Many securities class actions are “inflation-maintenance” cases, where plaintiffs allege that misrepresentations maintained, rather than inflated, stock prices. To invoke the presumption of class-wide reliance under Basic Inc v Levinson, 485 US 224 (1988), these plaintiffs point to a stock drop following a “corrective” disclosure, claim that it corrected an earlier misstatement, and argue that the drop revealed the inflation caused by that misstatement. In Goldman Sachs Grp, Inc v Ark Tchr Ret Sys, 594 US 113 (2021), the Supreme Court held that courts at class certification must scrutinize whether the alleged misrepresentations and corrective disclosures “match” – if they do not, the challenged disclosures did not impact the stock price and class certification is inappropriate. 

Lower courts have applied Goldman with varying rigor. To date, the Second Circuit has articulated the most exacting interpretation, requiring that a corrective disclosure “actually correct” a generic misstatement or “directly render [it] false.” See Ark Tchr Ret Sys v Goldman Sachs Grp, Inc, 77 F4th 74, 98 (2d Cir 2023). The Third Circuit has been comparatively lenient, inferring price impact where there is a match “[b]etween the subject of the alleged misrepresentation and the content of the disclosures.” See San Diego Cnty Emps Ret Assoc v Johnson & Johnson, No 24-1409, 2025 WL 2176586, at *4 (3d Cir 30 July 2025). The Ninth Circuit followed suit, holding that the statements “matched enough” for purposes of class certification without determining whether the corrective disclosure contradicted the challenged statement. See Jaeger v Zillow Grp, Inc, No 24-6605, 2025 WL 2741642, at *2 (9th Cir 26 September 2025).

Class certification is poised to continue evolving, as defendants in the Third Circuit action have petitioned the Supreme Court for a writ of certiorari. If the Supreme Court grants review, its decision could clarify the scrutiny that plaintiffs must survive to obtain class certification and, in so doing, give defendants a stronger tool for defeating class certification.

Tariff Uncertainty Leads to New Securities Class Actions

Tariffs have dominated headlines since President Trump announced sweeping import duties on “Liberation Day,” 2 April 2025, targeting major trading partners including China, Mexico and the EU. The administration’s tariff policy shifted repeatedly over the course of the past year – fluctuating country-by-country as leverage for bilateral negotiations – until the Supreme Court rejected the President’s reliance on the International Emergency Economic Powers Act as statutory authority for his actions in February 2026. The President subsequently announced a global 15% tariff under different statutory authority. This volatility has strained supply chains and increased consumer prices.

This uncertainty has triggered tariff-related securities litigation. Several complaints filed in 2025 alleged Section 10(b) and 20(a) violations stemming from issuers who purportedly downplayed tariff impacts on performance and guidance. For instance, in Sarti v Dow Inc, No 2:25-CV-12744-BRM-KGA (ED Mich 29 August 2025), plaintiffs challenged statements expressing optimism about weathering tariff headwinds that purportedly failed to disclose the severity of a tariff’s impacts. In Cap v Carmax Inc, No 1:25-CV-030602 (D Md 3 November 2025), plaintiffs targeted statements attributing growth to the issuer’s business model rather than tariff-driven speculation about future price increases. In Purrington v Lakeland Industries, Inc, No 1:260-CV-001501 (SDNY 23 February 2026), plaintiffs alleged that the company overstated its tariff mitigation measures. Given the ongoing policy uncertainty, issuers should continue to scrutinize communications about tariff exposure and effects.

Spoofing Litigation Continues

Spoofing continues to spawn securities litigation. Spoofing is a form of market manipulation whereby a trader places orders it never intends to execute to artificially move prices. For example, a trader might place a large sell order to drive down a security’s price, buy at the lower price, then cancel the original order before the price rebounds. Civil spoofing complaints have increased recently, targeting market participants, including broker-dealers, under theories of common law fraud and violations of Sections 9(a)(2) and 10(b) of the 1934 Exchange Act. As is frequently the case in securities litigation, the success of spoofing claims turns on whether a plaintiff has established scienter (manipulative intent) and loss causation (adverse price effects). Securities litigators should monitor developments in spoofing litigation, focusing in particular on decisions addressing these elements.

As litigants continue to test theories grounded in emerging technology and evolving regulatory expectations, case outcomes will increasingly depend on getting ahead of the curve. Clients are best served by counsel that keeps abreast of this shifting landscape and proves adept at both implementing risk mitigation strategies and leveraging developments in the case law.