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Securities Litigation In 2023 Showing Continued Muscle Flexing from the SEC

By Jay A. Dubow, Joanna J. Cline and Kaitlin L. O'Donnell
April 01, 2023

With this year's securities law trends just beginning to take shape, we can anticipate what is on the horizon for 2023. Companies should expect to see the Securities and Exchange Commission (SEC) — armed with an additional $210 million in funding this year — continue to flex its regulatory muscles. With many market forecasters still predicting an economic downturn in 2023, companies can also expect shareholders to try and recoup any market losses through securities class action litigation.

Traditional securities fraud issues, such as market manipulation and insider trading, will remain priorities for both the government and private plaintiffs alike. But newer trends — such as environmental, social, and governance (ESG), cybersecurity-related disclosure violations, and cryptocurrency regulation — are likely to provide further fuel for securities litigation and enforcement.

A Big Year for the SEC and Private Plaintiffs

Last year saw a significant increase in SEC rulemaking and enforcement activity, as well as substantial alleged losses for securities class action plaintiffs. In fact, 2022 was a record-setting year for the SEC, which assessed more in civil penalties than at any other point in history. These trends — aggressive SEC enforcement and hefty loss allegations — will likely continue into 2023.

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