4 held that Section 14(e) does not require intention- al wrongdoing (scienter), but rather, requires only negligence. In doing so, the Ninth Circuit split from the Second, Third, Fifth, Sixth, and Eleventh Circuit decisions on which the district court relied. The Supreme Court granted Defendants’ petition for review and will be hearing that case in 2019. As noted above, this report also provides a brief overview of significant developments in the block- chain and digital currency space, with technology companies conducting approximately 1500 token sales (commonly referred to as “initial coin offer- ings” or “ICOs”), raising more than an estimated $26 billion in total. Building off of guidance pub- lished in 2017, the federal government has re- mained active in monitoring token sales to deter- mine whether they involve potential violations of the federal securities laws, and civil plaintiffs also have alleged such violations. In 2018, class action filings related to ICOs or cryptocurrency near- ly doubled from 5 in 2017 to 9 in 2018. In these matters and other enforcement actions, the courts have taken on the issue of whether federal laws govern ICOs and, if so, which. 1 Source: Cornerstone Research Securities Class Action Filings - 2018 Year in Review (“Cornerstone Report”), at 1. 2 Cornerstone Report, at 1. 3 Cornerstone Report, at 34 and Appendix 7. Sectors and subsectors are based on the Bloomberg Industry Classification System. 4 Cornerstone Report, at 12. 5 Cornerstone Report, at 36. 6 Cornerstone Report, at 35 and Appendix 8. 7 Cornerstone Report, at 38. Note: 1. Percentage of cases is calculated as the number of cases involving firms in the technology or communications sectors that were dismissed within one year of the filing date, divided by the total number of cases in those sectors filed each year. 2. Sectors are based on the Bloomberg Industry Classification System. 3. The outlined bar for 2018 indicates the percentage of cases dismissed through the end of the year. The outlined bar therefore presents only partial-year observed resolution activity, whereas the bars in earlier years show an entire year. © 2019 Cornerstone Research. All rights reserved. (Figure 2) Percentage of Technology and Communications Cases Dismissed within One Year of Filing DateCore Filings 2009–2018 0% 5% 10% 15% 20% 25% 30% 10% 10% 21% 24% 19% 5% 15% 12% 9% 21% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018