Approximately 15% of the securities class action suits filed in 2019 were filed against non-U.S. issuers, marking a 2% increase from 2018, according to a recent report published by Dechert.

According to "Non-U.S. Issuers Targeted In Securities Class Actions Files in the United States," 64 of the 404 securities class action lawsuits in 2019 were filed against non-U.S. issuers. In 2018, 54 of the 403 securities class action suits filed, or 13%, were against non-U.S. issuers.

"It seems to be an area of high interest in the shareholder plaintiffs' bar in the United States and I don't see any letup in this particular trend," said David Kistenbroker, the managing partner at Dechert in Chicago and global co-leader of the white-collar and securities litigation practice.

The plaintiffs bar is particularly keen on filing securities suits against biotechnology and pharmaceutical companies based outside of the U.S., according to the report. Eighteen of the 64 suits in 2019 against non-U.S. issuers were against companies in those industries.

Six of the suits filed in 2019 alleged companies misrepresented the prospects of a new drug or product being approved by the Food and Drug Administration.

"The percentage of the companies that get a declination from the FDA is fairly substantial, and it is well known that can cause a rather significant downward movement of the publicly issued stock of those companies," Kistenbroker explained.

He said that kind of downward movement in stock is what the plaintiffs bar is looking for.

In-house counsel, Kistenbroker said, at companies in the biotech and pharmaceutical companies should focus on their internal processes and disclosures.

"They need to make sure they have a robust structure to create those disclosures and make sure their disclosures are as full as possible," Kistenbroker said.

Though not mentioned in the report, Kistenbroker said the new coronavirus will likely contribute to new class action suits against non-U.S. securities issuers throughout 2020.

"We have seen two shareholder class actions filed generally in the United States already," Kistenbroker said. "I think those are just the tip of the iceberg."

Significantly, Kistenbroker said, investors have filed a suit against Norwegian Cruise Line in the U.S. District Court for the Southern District of Florida claiming class members were hurt financially by the company allegedly telling passengers that COVID-19 would not affect their trips. Investors have also filed suit against Plymouth Meeting, Pennsylvania-based Inovio Pharmaceuticals Inc. and its CEO over false statements claiming the biotech firm had developed a COVID-19 vaccine in three hours.

Proper disclosures are important to mitigate the risk of a COVID-19 related securities suit.

"In today's environment, every company should make sure that it disclosures fully and accurately the impact of the coronavirus on their business and operations," Kistenbroker said.