Securities class action suits and settlements have both been on the rise so far this year, and artificial intelligence is to blame at least some of the time.
That’s according to a recent report issued by insurance broker and risk management firm Gallagher. Per the 2026 D&O Databox Mid-Year Report, plaintiffs filed a total of 113 securities class action cases in the first half of this year, up 10% year over year. More than half of 2026’s cases were filed in the first quarter of the year, when plaintiffs brought a total of 67 such suits. That compares to 61 similar cases filed in 2025’s first quarter.
Roughly one in 10 of this year’s cases, or 13%, involved “AI issues,” per the report. Gallagher researchers pointed to a February case brought against Oracle for allegedly misrepresenting the “impact of AI-related revenue growth.” The report, which was published last week, also called out a similar case against Microsoft, which faced allegations it misrepresented revenue growth for its Copilot AI tool.
“While AI issues are referenced in these complaints, some of the cases could be attributed less to AI matters than to broader business performance issues,” Gallagher’s report stated. “However, as more public companies integrate AI into their growth strategies, AI-related allegations tied to revenue growth are now more common in securities class action cases.”
Gallagher’s research tracks with a similar report issued by Cornerstone Research, which also found an uptick in the number of AI-related securities class action suits in the first half of the year.
But it’s worth noting, too, that AI was not the top driver of class action cases in 2026’s first half, per Gallagher’s research. That distinction goes to companies with foreign headquarters, which faced 26% of securities class action suits observed by Gallagher. That’s up from 18% in 2025’s first half.
Gallagher’s report said there were securities cases mounted against companies based in 11 countries, including China.
At the same time, settlement dollars are clearly ticking up. Gallagher’s research revealed 48 settlements worth $2.1 billion in 2026's first half. That’s up notably from the first half of 2025, when researchers identified 41 settlements totaling $1.1 billion. The average settlement this year was $44 million, well above the 10-year average of $33 million, according to the report.
Those numbers could prompt more plaintiffs to file more cases, said Priya Cherian Huskins, senior VP and national director in Gallagher’s executive and financial risk practice.
“Large settlements encourage the plaintiffs' bar in at least two ways: the wins create a war chest that funds future litigation, and — given the possibility of enormous payouts — it becomes increasingly worthwhile for plaintiffs to take big swings,” she said in an email to CFO.com. “This means that even companies facing what they think are frivolous claims should be prepared to endure extended litigation timelines. These longer timelines translate into greater defense costs and can lead to higher settlements.”
Meanwhile, Gallagher’s research pointed to a notable uptick in litigation against businesses in the mid-cap category, those with a market value between $2 billion and $10 billion. Researchers detected a 11% increase in filings against such companies, while companies with a market cap above $10 billion saw a decline by the same percentage.
“The number of companies going public has dropped since the record high of over 600 in 2021(excluding special purpose acquisition companies, or SPACs),” the report said. “As a result, it’s unsurprising that a sizable portion of the filings in 1H 2026 were comprised of mature public companies.”
