This article follows an earlier Client Alert entitled COVID-19: An Early Look at Securities Act Litigation Amid COVID-19.1 In that alert, we anticipated that there would be an increase in Securities Act filings involving claims directly related to COVID-19 and its financial consequences. A year has since passed, and despite our earlier assessment, we can now report that there has been a relatively low number of COVID-19-related Securities Act filings in the year following the onset of the pandemic. As of April 30, 2021, there have been only four Securities Act cases with substantive allegations related to COVID-19, all of which held initial public offerings (IPOs) in either January or June 2020. The small number of COVID-19-related Securities Act class actions is consistent with the slowdown in Securities Act class action filings toward the end of 2020, which experts have theorized was a function of COVID-19-induced market drops in the first quarter of 2020 and subsequent rebound in the second through fourth quarters.2
Though they are few in number, understanding what COVID-19-related Securities Act class actions have been filed to date and their substantive allegations provides insight into how the landscape of COVID-19-related Securities Act class actions may continue to develop as the pandemic continues. Indeed, the commonalities among the allegations in these four cases shed light on the types of arguments that plaintiffs in this area are pursuing.