In an earlier publication, Fideres analyzed how defendants’ strategies at the 10b5 class certification stage developed following the 2021 and 2023 Goldman rulings. We have extended this analysis to cover more recent cases where plaintiffs filed a motion for class certification through February 1, 2024.

Our findings indicate an important change in defendants’ class certification strategies, with price impact now being a central tenet.

Our updated analysis shows that the previously observed trends persist. Between the 2021 Supreme Court ruling and the 2023 Second Circuit ruling, defendants challenged price impact in 43% of class certification proceedings, up from 16% before the Supreme Court ruling. Following the 2023 Second Circuit ruling, this tendency intensified, with 70% of defendants challenging class certification. As before, we observe that most defendants challenging price impact rely on expert witness testimony.

At the heart of the Goldman class certification challenge an alleged mismatch in the genericness of alleged misrepresentations and their corresponding corrective disclosures. However, we observe that defendants tend to cite to Goldman in a broader context, with only 25% of defendants that challenge price impact doing so on ground of the alleged misrepresentations being overly generic.