Fifth Circuit Securities Litigation Quarterly: second quarter 2026

Welcome to the Q2 2026 edition of A&O Shearman’s Fifth Circuit Securities Litigation Quarterly.

As public companies and financial institutions continue to migrate to Texas, our Texas-based securities litigation team continues to monitor key developments and help our clients navigate the unique landscape for federal securities litigation in the Fifth Circuit.

In our Q2 edition, we cover two new class action filings, two new class action settlements, one class action trial, two pleading stage opinions, and other decisions of note.

New securities class action filings

NEW ERA ENERGY & DIGIT., INC. (W.D. TEX., 7:26-cv-120, Filed April 1, 2026)

• Filed on behalf of a putative class of investors who purchased or otherwise acquired New Era Energy securities between November 6, 2024 and December 29, 2025, inclusive
• Asserts claims under the Securities Exchange Act of 1934
• Alleges Defendants made “false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects,” which included that: “(1) the Company overstated its progress in its permitting and regulatory filings for its flagship Texas Critical Data Centers project; (2) the Company was involved in a fraudulent scheme ‘to pocket revenues from hundreds of oil and gas wells in New Mexico’ by transferring wells among related entities and then placing liability-bearing companies into bankruptcy to avoid plugging and remediation costs; (3) that, as a result, the Company’s financial results were false and/or misleading; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

HELEN OF TROY LTD. (W.D. TEX., 3:26-cv 1528, Filed June 2, 2026)

• Filed on behalf of a putative class of investors who purchased or otherwise acquired Helen of Troy securities between April 24, 2024 and October 8, 2025, inclusive
• Asserts claims under the Securities Exchange Act of 1934
• Alleges Defendants made “false, or at a minimum, materially misleading” statements concerning “Project Pegasus” because “[e]vidence suggest[ed] that given the importance of Project Pegasus to the Company’s business model and finances, the external macroeconomic conditions during the Class Period, and the Company’s internal budget and resource constraints, at the time these statements [concerning Project Pegasus’s progress] were made, Defendants knew or should have known that Project Pegasus would not, and was not on track to, realize the savings, efficiency, or effectiveness that Helen of Troy consistently touted.”

New securities class action settlements

IN RE DZS INC. SEC. LITIG. (E.D. TEX., 4:23 CV-549)

• $2.9 million settlement of case asserting claims under the Securities Exchange Act of 1934
• Case initially filed on June 14, 2023, and was later consolidated with two other cases. In 2025 while the case was pending, DZS commenced bankruptcy proceedings and Plaintiff voluntarily dismissed DZS from the case. In June 2025, the bankruptcy judge issued an order modifying the automatic stay in the bankruptcy proceeding to allow the causes of action against DZS to proceed. The case resolved after Defendants’ motion to dismiss the amended complaint was fully briefed. Motion for preliminary approval of settlement filed on May 19, 2026.

IN RE CASSAVA SCIS., INC. SEC. LITIG. (W.D. TEX., 1:21-cv-751)

• $31.25 million settlement of case asserting claims under the Securities Exchange Act of 1934
• Case initially filed on August 27, 2021. The court granted in part and denied in part Defendants’ motion to dismiss and granted Plaintiffs’ motion for class certification. The Fifth Circuit granted Defendants’ petition to appeal class certification under Rule 23(f), and the case resolved after the Fifth Circuit briefing was complete. Motion for preliminary approval of settlement filed on June 18, 2026.
• Also this quarter on June 29, Magistrate Judge Hightower denied Defendants’ motion to consolidate a separate securities class action based on similar facts into the class action that is settling, finding that consolidation was not appropriate because there is no overlap in the class periods of the two cases and the other case is still at the pleading stage. See In re Cassava Scis., Inc. Sec. Litig., 2026 WL 1878384 (W.D. Tex. June 29, 2026).

Securities class action trial

RAMIREZ V. EXXON MOBIL CORP., ET AL. (N.D. TEX., 3:16-cv-3111)

• In a rare securities class action trial, the jury returned a complete defense verdict on all claims against Exxon and its executives following a 14-day trial.
• Following significant narrowing of Plaintiffs’ claims that had occurred through various pre-trial rulings in the decade-old case, Plaintiffs at the time of trial brought Exchange Act claims with a class period of February 24, 2016 through October 28, 2016.
• The jury found that Plaintiffs failed to prove their Rule 10b-5 claim as to each of the Defendants and as to each of three statements in Exxon’s 2015 annual report. The three statements concerned (i) proved bitumen reserves at Exxon’s Kearl operations in Canada, (ii) “average production prices” and “average production costs” at Exxon’s Kearl operations, and (iii) Exxon’s earnings statement regarding non-impairment of its Rocky Mountain Dry Gas operations.
• Also this quarter and prior to trial, Judge Kinkeade denied various motions from the parties in summary orders, including Exxon’s motion for summary judgment, both sides’ motions to exclude various experts, and Plaintiffs’ motion to bifurcate the trial.

Decisions of note

1. Next Bridge Hydrocarbons: 5th Cir. Reverses and Remands District Court’s Dismissal Determining Plaintiffs had Statutory Standing after Acquiring Security “For Value

2. agilon health: W.D. Tex. Grants in Part Motion for Reconsideration of the Court’s Dismissal Ruling for Failure to Adequately Allege Section 20A Insider Trading Claims Against CD&R Defendants

3. Other Decisions of Note: N.D. Tex. Holds Private Securities Litigation Reform Act’s Automatic Stay of Discovery Did Not Apply Where Rule 12(c) Motion Was Pending in Brand Engagement Case; N.D. Tex Denies Temporary Restraining Order to Prevent Calling of a Special Shareholders’ Meeting in Fermi Case; N.D. Tex. Grants Leave to File Third Amended Complaint in AT&T Case

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