Securities Litigation Risk for U.S. Public Companies Increased by $1.8 Trillion in 2025

BETHESDA, Md., July 31, 2025 /PRNewswire/ -- Securities Analytics Research (SAR), a data analytics company specialized in the securities litigation risk of U.S. public companies, today published the U.S. Securities Litigation Risk Report – July 2025.   

Corporate disclosures based on public statements and filings made with the Securities and Exchange Commission ("SEC") that resulted in a negative material impact on stock price of companies listed on the NYSE or NASDAQ, increased in both average frequency and aggregate severity by 2.18% and 18.1%, respectively, relative to the two-year period ending December 2024. On average, market capitalization losses per High-Risk Adverse Corporate Events ("ACEs") increased by $160 million, or 17.1%.

According to the report, SAR identified 10,631 High-Risk ACEs from a population of 4,544 U.S. public companies, as of the two-year period ending June 2025. Eight out of the eleven Global Industry Classification Standard (GICS^®) sectors exhibited an increase in securities litigation risk based on sector-specific market capitalization losses relative to the current sectoral market capitalization.

The market capitalization losses related to High-Risk ACEs amount to approximately $11.8 trillion, an increase of $1.8 trillion relative to the two-year period ending December 2024. The Information Technology sector topped the charts again, with $3.5 trillion, followed by Health Care and Consumer Discretionary with $1.8 and $1.5 trillion, respectively.

"Our data and empirical analyses confirm that directors and officers of U.S. public companies face a notable increase in securities litigation risk in 2025, despite record-setting public equity valuations. Issuers now face an increase of about $1.8 trillion in market capitalization losses linked to High-Risk adverse corporate events," said Nessim Mezrahi, Co-Founder and CEO of SAR.

Key Takeaways:

As of June 2025, the sector with the greatest market capitalization losses as a percentage of the sector-specific market capitalization is Health Care at 25.88%, followed by Industrials at 18.26%, and Consumer Discretionary at 17.79%, respectively.

Information Technology companies faced the greatest market capitalization losses per High-Risk ACE, amounting to $2.21 billion, followed by Communication Services and Consumer Staples with $1.95 and $1.32 billion, respectively.

The sector with the highest median SAR Risk Score, and therefore facing a higher probability of defending a securities class action, is Health Care with a median score of 33.18%, followed by Information Technology and Consumer Discretionary with 25.41% and 26.39%, respectively.

This independent, semi-annual U.S. equity research report presents an appendix with the median SAR Risk Score across all GICS sectors, industries, and sub-industries.  The SAR Platform provides users with the near real-time quantification and probability of securities litigation risk, with full transparency at the corporate disclosure level, for public companies listed on the NYSE or NASDAQ.

SOURCE SAR