Guest Post: SEC Enforcement Data: Midyear Review

skarzynski 1In the following guest post, Tammy Yuen and Ted Carleton of the Skarzynski Black law firm review and analyze the May 9, 2017 Cornerstone Research report entitled “SEC Enforcement Activity: Public Companies and Subsidiaries, Midyear FY 2017 Update” (here), which details the SEC’s enforcement activity during the first half of the current fiscal year. I would like to thank Tammy and Ted for their willingness to allow me to publish their article on this site.  I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Tammy and Ted’s guest post. Continue Reading

Is Deal Litigation in Delaware Done?

delawareAs documented on this site (for example, here and here) and elsewhere, deal litigation has been shifting from Delaware Chancery Court to courts in other states and to federal courts. This shift is largely the result of two Delaware court decisions, the Delaware Supreme Court’s 2015 decision in Corwin v. KKR Financial Holdings LLC  (here) and the Delaware Chancery Court’s January 2016 court decision in the In re Trulia Shareholder litigation (here). Though these court decisions are relatively recent, they are already having measurable impact on the amount of litigation in Delaware. Indeed, as detailed in a May 19, 2017 Law 360 article entitled “Delaware Plaintiffs’ Attorneys Fear Exodus of Chancery Deal Suits” (here, subscription required), the effect from these two cases has been sufficiently substantial that plaintiffs’ lawyers active in Delaware are now concerned that the future of deal litigation in Delaware is under threat. Continue Reading

Why Are There Fewer Public Companies and How Worried Should We Be About it?

tickerThere are fewer public companies in the U.S. than there were in the nineties. Understanding the reason for the decline in the number of public companies is important to understanding whether or not the decline is a cause for concern, as well for thinking about what if anything policymakers should about it. In an interesting May 2017 paper entitled “Looking Behind the Declining Number of Public Companies: An Analysis of U.S. Capital Markets” (here), EY takes a detailed look at the drop in the number of companies listed on U.S. exchanges and examines the causes. The paper’s analysis has a number of important implications for policymakers, for investors, and for all market observers. A version of the EY paper appeared in a May 18, 2017 post on the Harvard Law School Forum of Corporate Governance and Financial Regulation blog (here). Continue Reading

D&O Insurance is Important for Private Companies, Too

board roomExecutives at companies whose securities are publicly traded typically don’t need to be persuaded that their company needs D&O insurance. They understand that the exposures public companies face make D&O insurance indispensable. However, the view of some private company managers may be different, particularly for officials at companies whose shares are very closely held. These company officials may believe their company has little risk of getting hit with a D&O lawsuit and as a result conclude that they don’t need D&O insurance. However, the reality is that D&O insurance is an indispensable part of every company’s risk management arsenal, whether or not a company’s shares are listed. Continue Reading

Commentary on “Winning the Securities Class Action War”

gavelOver the last several days, Doug Greene of the Lane Powell law firm has been running a series of articles on his D&O Discourse blog asking the question “Who is Winning the Class Action War?” In the aggregate, the multi-part series provides an interesting commentary on the current state of securities class action litigation in the United States. The articles in the series are thought-provoking and provocative — apparently deliberately so — and I commend them to readers for the perspective they provide on the current state of play in securities litigation, from the outlook of an experienced defense-side securities class action litigator.


Based on my own varied experiences, I have my own perspective on some of the topics Greene discusses in his articles, which I have set out below. I want to emphasize at the outset that I am neither entirely disagreeing with nor entirely agreeing with Greene’s analysis and conclusions. I offer my thoughts here for whatever they may be worth, as part of the dialogue that Greene’s articles undoubtedly will provoke. Continue Reading

What Happens When the Policy Doesn’t Say What was Intended?

californiaDuring the insurance placement process, important policy terms and conditions are often the subject of negotiation. If things go as intended, the policy that is later issued accurately reflects the outcome of the negotiations. A frequently recurring question is what to do if it is later contended that the policy as issued does not accurately reflect what was negotiated.


These issues were involved in a recent insurance coverage dispute in California between a law firm and its professional liability insurer. When the law firm had renewed its insurance, it had increased the limits of liability available under its professional liability insurance policy from $2 million to $4 million. In arguing that only $2 million of coverage was applicable to a subsequent claim, the insurer sought to rely on a manuscript policy endorsement the insurer argued set policy inception as the past acts date for the $2 million excess of $2 million of limits. In a May 11, 2017 order (here) holding that the full $4 million limit of liability was available for the underlying claim, Central District of California Judge Josephine Staton, called the endorsement on which the insurer sought to rely “indecipherable,” adding that the insurer “must accept the consequences of its slapdash drafting.” Continue Reading

Proposed Disclosure and Corporate Governance Reforms in the Financial Choice Act 2.0

us capitolIn a post last week, I wrote about the proposed revised Financial Choice Act (H.R. 10) now pending before Congress and the potential impact that the bill could have on the SEC’s enforcement program. In this post, I address the potential impact that the bill’s provisions could have on public company disclosure requirements and corporate governance. If the bill’s provisions are enacted into law, the measures could significantly alter or eliminate many of the Dodd-Frank Act’s disclosure and corporate governance requirements. Continue Reading

Guest Post: The Impact of a Recent Criminal Case in Spain on D&O Insurance

Jorge Angell

Jorge Angell

As part of The D&O Diary’s ongoing efforts to keep abreast of important D&O insurance developments around the world, I am pleased to present the following guest post regarding D&O issues in Spain. In his guest post, Jorge Angell, the  senior partner at the Madrid law firm of LC Rodrigo Abogados, takes a look at certain features of the criminal liability system in Spain and reviews the implications for D&O insurance. I would like to thank Jorge for his willingness to publish his article as a guest post on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit an article. Here is Jorge’s guest post. Continue Reading

Financial Choice Act 2.0 Proposes Significant Changes to the SEC’s Enforcement Authority

us capital 2One of the Trump administration’s high profile initiatives is the review and rollback of many of the Dodd-Frank Act’s features.  Consistent with these efforts, an updated version of a bill that would undo many of the Act’s provisions is now making its way through Congress. The Financial Choice Act (H.B. 10) was introduced in April by Rep. Jeb Hensarling (R-Tex.) Because Hensarling introduced a similar bill with the same name during the last Congressional session, the recently introduced bill is referred to as Financial Choice Act 2.0. The bill, which has already passed through the House Financial Services Committee, addresses a number of high profile issues affecting the regulation of the financial system. The systemic issues are attracting all of the headlines. Other features of the bill are attracting less notice. Of particular interest here, the bill introduces a number of changes to the SEC’s enforcement authority. As Columbia Law School Professor John Coffee commented in congressional hearing testimony, these changes, if enacted, would “hobble the SEC’s enforcement program,” and the “cumulative effect” would be “devastating.” Continue Reading

Important D&O Insurance Program Structure Concerns

structureMost D&O insurance buyers understand the critical importance of limits selection – that is, deciding how much insurance to buy. But an equally important question involves the issue of program structure – that is, how the insurance program is put together. Many insurance buyers understand that, in order to be able to purchase an insurance program with the desired limits of liability, their D&O insurance will be structured with a layer of primary insurance and one or more layers of excess insurance. In addition, these days many D&O insurance buyers also purchase an additional layer – usually on the top of program – of Side A Difference in Condition (DIC) insurance. As noted in an interesting May 2, 2017 post on the Pillsbury Policyholder Pulse blog (here), “no coverage may be less understood” than the Side A DIC policy. But even if frequently misunderstood, the coverage provides corporate directors and officers an important safety net. Moreover, there are other important D&O insurance program structure issues, beyond just the need for Side A DIC insurance. Continue Reading