Securities Filings Hit 118 in H1 2026 as D&O Pricing Sits at Cycle Bottom

NERA economists Ivelina Velikova and Svetlana Starykh counted 118 federal securities class actions in the first half of 2026, an annualized pace of 236 that would top 2025's 205 filings and mark the highest full-year total since 2020 (NERA Economic Consulting, July 21, 2026).

Eighteen of those filings targeted AI-related disclosures, already more than the 17 filed in all of 2025, while the directors-and-officers market pricing that book of risk runs flat to down.

Key Takeaways

• 118 federal securities class actions in the first half, an annualized 236 against 205 for all of 2025 and the highest pace since 2020. Cornerstone counted 121 core filings on its own criteria, up 30% from the second half of 2025.
• 18 AI-related filings already exceed the 17 filed in all of 2025, and AI cases carried $385 billion of the period's $529 billion Disclosure Dollar Loss Index: 73% of the dollars on 13% of the filings.
• Average settlement value of $54 million, up 32% from 2025's inflation-adjusted $41 million, against a dismissal rate that still took 62% of resolutions.
• The loss triangle has no rows for the category. AI-disclosure claims did not exist in meaningful volume before 2023, and AM Best has already flagged 2023 and 2024 reserves as inadequate on the broader book.
• US D&O rates rose 1% after a 3% decline, against direct premium already contracted to roughly $10 billion from nearly $15 billion in 2021.

The Count, and Where the Dollars Sit

NERA splits the 118 first-half filings into 67 in the first quarter and 51 in the second, with 112 involving standard Rule 10b-5, Section 11 or Section 12 allegations. Cornerstone Research, on a partially overlapping dataset, counted 121 core federal filings, a 30% jump from the second half of 2025, split 69 and 52 (Cornerstone Research, July 29, 2026).

The counts differ by a few cases because the firms apply different inclusion criteria to borderline filings, a routine methodological gap between the field's two main trackers. Both point the same way. The annualized 236 would sit three cases above the 233 filed in 2023, the prior post-2020 peak, and 15% above 2025.

Composition moved as much as volume. Pump-and-dump allegations went from no more than two filings a year across 2022 through 2025 to 11 in the first half alone, while crypto-related filings fell to 2 from 14 and SPAC-related to 1 from 5 (The D&O Diary, July 2026). Foreign issuers made up 20.5% of filings, 23 cases, against 13.8% in 2025.

The dollar concentration is the part that matters most. Cornerstone's Disclosure Dollar Loss Index, measuring market-cap decline attributable to alleged misrepresentations at the moment they became public, hit $529 billion, up 77% from the second half of 2025. AI-related cases carried $385 billion of it, 73% of the total, on 13% of core filings. Eighty percent of the period's mega-MDL filings were AI-related.

Cornerstone's Alexander Aganin tied the sector shift directly to the technology: filings against the technology sector "increased by 15 filings, from nine to 24." Stanford's Joseph Grundfest put the asymmetry plainly: AI cases were "a modest share of total filings but an outsized share of alleged investor losses."

A Severity Category With No Rows in the Triangle

The resolution side shows the same split. Of 105 federal cases resolved in the half, NERA counted 65 dismissals against 40 settlements, dismissals leading 62% to 38%. Cornerstone counted 39 settlements totaling $2.2 billion, roughly three-quarters of the inflation-adjusted full-year 2025 total.

Values rose while the dismissal rate held. NERA's average settlement came in at $54 million, up 32% from 2025's inflation-adjusted $41 million, with a median of $18 million. Four mega-settlements above $100 million each made up roughly 10% of settlements by count and a far larger share of the dollars.

Higher average value against a still-elevated dismissal rate describes a docket where the marginal case surviving to settlement is a stronger one. Plaintiffs' firms are being more selective about which AI-disclosure claims they carry past a motion to dismiss, and the survivors carry larger alleged losses because of who is being sued.

That is the shape D&O actuaries already track in the broader liability book. What is new is a distinct sub-category generating it inside a single accident-year cohort at a pace the historical triangle has no comparable rows for. A triangle populated mostly by pre-2024 filings carries no development history for a claims category Cornerstone dates to 2023 and that has already exceeded a full prior year's total by mid-year.

Applying an unadjusted historical development factor to accident year 2025 or 2026 therefore understates ultimate losses precisely in the segment where filings grow fastest and alleged losses concentrate. The case is stronger than it would be in a stable environment: AM Best has already flagged reserve inadequacy in the 2023 and 2024 accident years on the broader book, before the AI surge fully reached the docket.

A Tower Priced Off the Old Trend

The pricing environment moved the other way in the same week. Marsh's global composite for financial and professional lines declined 3% in the second quarter, extending an eighth consecutive quarter of commercial rate reductions driven by abundant capacity, insurer profitability and favorable reinsurance terms (Marsh, July 22, 2026). US D&O ticked up 1% after a 3% first-quarter decline, the first positive print in more than two years, which does not undo four years of cumulative reductions.

The premium base has already contracted. The 2025 monoline D&O direct loss ratio ran 54.5, up from 49.0, on direct premium down to roughly $10 billion from nearly $15 billion in 2021. TransRe frames the line's breakeven around a 70-point ultimate loss ratio after typical acquisition and internal expense loads (TransRe, April 2026), which puts 54.5 under that line only if the underlying accident-year reserves are adequate.

Tower structure decides where the gap bites first. TransRe's data puts mega and large-cap excess-layer pricing 13% to 17% below its 2013 peak despite four years of exposure growth from rising market capitalizations, with low and mid-excess layers carrying the highest severity sensitivity and the least price appreciation of any tower segment.

Brokers call those middle layers the "burn layer": attachment points that historically sat above where claims activity reached, now increasingly breached as severity migrates upward (Insurance Business, 2026). Side-A difference-in-conditions cover, protecting individual directors where the balance sheet cannot indemnify them, is flagged as having limited headroom for further cuts.

Defense cost inflation compounds it independently. A cumulative 44% rise in legal-services fees since 2020 erodes the working layer faster and pushes more of a claim's ultimate cost into the excess layers above it. Layer that onto a claims category concentrated in large-capitalization technology names, the profile that buys the deepest towers, and the excess and Side-A segments carry two pressures at once that the primary layer's pricing does not yet reflect.