The median securities class action settlement held at $18 million during the first half of 2026. The average surged to $54 million.
That 3-to-1 gap is the warning for public-company leaders. It does not mean every claim suddenly costs $54 million. It means a smaller number of severe cases is driving losses sharply higher, and those are the cases most capable of overwhelming a company’s D&O insurance.
For CEOs, CFOs and boards, the data raises a practical question: Has our D&O program kept pace with the risk?
The 2026 story is clear: more lawsuits, longer cases, greater exposure to catastrophic settlements—and a dramatic migration of litigation from SPACs and crypto toward artificial intelligence.
Securities litigation is accelerating
NERA Economic Consulting identified 118 new federal securities class actions during the first half of 2026.
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At the current pace, approximately 236 cases will be filed this year, 15% above the 205 filed in 2025 and slightly above the recent peak of 233 in 2023.
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“Standard” securities cases accounted for 112 of the 118 filings. These generally allege that investors were harmed by misleading statements or omitted information.
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Cases alleging only Rule 10b-5 violations are on pace to reach 206, compared with 176 in 2025. Rule 10b-5 is the primary federal rule used when shareholders claim a company or its executives misled the market.
Technology and healthcare represented 28% and 26% of applicable filings, respectively, 54% combined. The Second and Ninth Circuits, which include New York and California, accounted for 68% of first-half filings.
Litigation is migrating from SPACs and crypto to AI
In 2022, NERA identified 30 crypto-related filings, 26 SPAC-related filings and only seven AI-related filings. During the first half of 2026, that relationship reversed dramatically:
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AI-related filings reached 18, already exceeding the 17 filed during all of 2025.
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Crypto-related filings declined to two, compared with 14 in 2025.
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SPAC-related filings fell to one, compared with five in 2025 and 26 in 2022.
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AI cases outnumbered crypto and SPAC cases combined by six to one.
At the current pace, 2026 would produce approximately 36 AI cases, four crypto cases and two SPAC cases.
The litigation risk has not disappeared. It has migrated from yesterday’s capital-markets narratives to today’s.
That may make AI risk more consequential than the earlier crypto and SPAC waves. Those exposures were concentrated among companies directly participating in those markets. AI statements now appear in earnings calls, investor presentations and SEC filings across nearly every industry.
Plaintiffs are targeting what management said about the future
The most common allegation in 2026 was not accounting misconduct. It was that management misled investors about future performance.
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45% of standard filings involved future-performance statements.
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37% involved missed earnings guidance.
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19% involved regulatory issues, up from 13% in 2025.
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Approximately 11% involved accounting issues.
A company does not need an accounting restatement to face a securities lawsuit. A missed forecast, delayed product launch, lost customer, regulatory setback or margin decline can become the basis for a claim when compared with management’s earlier statements.
The combination of 18 AI cases and the prevalence of future-performance allegations is particularly important. Plaintiffs are likely to ask:
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Did AI generate the projected revenue?
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Was the product as capable as represented?
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Were customers actually adopting it?
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Did the promised savings materialize?
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Was the technology commercially deployed or still experimental?
Companies should clearly distinguish among current capabilities, pilot programs and future ambitions. AI statements should be specific, supportable and consistent across SEC filings, earnings calls, presentations, interviews and social media.
The largest losses are becoming more dangerous
First-half settlements totaled $2.3 billion, already 75% of the inflation-adjusted $3 billion recorded during all of 2025.
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The average settlement reached $54 million, up 32% from the inflation-adjusted 2025 average of $41 million.
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It was the highest average of the past decade, even after excluding settlements of $1 billion or more.
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The median remained $18 million.
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Approximately 43% of settlements were below $10 million.
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Another 12% were between $50 million and $99.9 million, the highest share for that range in five years.
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Approximately 10% were $100 million or greater.
The middle of the market looks familiar, but the high-severity end is becoming more expensive.
Cases are also lasting longer. The median settled case had been pending for 3.7 years, up from 3.3 years in 2025. Even dismissed cases took a median of 1.5 years.
This matters because defense expenses are generally paid from the same D&O limits needed for settlement. Every dollar spent defending the case can leave one less dollar available to resolve it.
What public-company leaders should ask now
A D&O program should not be built solely around the median claim. The median tells you what is common; the gap between the median and average tells you what could threaten the company.
CEOs, CFOs and boards should ask:
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Could our program withstand years of defense costs followed by a $50 million to $100 million settlement?
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How much coverage would remain after attorneys, experts and other defense expenses are paid?
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Are our limits based on peer purchasing—or on what our balance sheet can absorb?
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Have acquisitions, financings, market-cap growth or increased trading changed our exposure?
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Do we have sufficient Side A coverage to protect directors and officers when the company cannot indemnify them?
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Are statements about earnings, growth, AI and future performance consistent across every public channel?
Peer benchmarking tells a company what others purchase—not whether that amount will protect its leadership and balance sheet against a severe claim.
The lesson from 2026 is not that every public company automatically needs more insurance. It is that using a “typical settlement” to measure a potentially catastrophic loss can create a dangerous sense of security.
Churchwell Insurance Agency helps public companies determine whether their D&O limits, coverage structure and policy language reflect today’s securities litigation environment—not simply what comparable companies purchased.
If your company has not recently tested its D&O program against a multiyear securities claim and a high-severity settlement, contact Churchwell Insurance Agency to schedule a focused coverage review before your next renewal.
Source: NERA Economic Consulting, “Recent Trends in Securities Class Action Litigation: H1 2026 Update,” July 21, 2026. This article is for general informational purposes and is not legal advice.
