The Developing Phenomenon of Trade Sanction-Related Follow-On Civil Litigation

vascoIn the latest example of a case where alleged violations of U.S. trade sanction laws have led to a follow-on civil lawsuit, on July 28, 2015, a plaintiff shareholder filed a securities class action lawsuit against VASCO Data Security International and certain of its directors and officers. The lawsuit follows the company’s announcement that it has self-reported a possible violation of federal prohibitions against sales of goods to parties in Iran. A copy of the plaintiff’s complaint can be found here. Continue Reading

Cornerstone Research Releases Midyear Securities Litigation Report

cornerstone reserach pdfThe number of federal securities class action lawsuit filings in the first half of 2015 was above the number of securities suits in the first half of 2014, although below long-term semiannual averages, according to the latest report from Cornerstone Research. The report, entitled “Securities Class Action Filings: 2015 Midyear Assessment,” can be found here. Cornerstone Research’s July 30, 2015 press release about the report can be found here. My own analysis of the first half securities class action lawsuit filings can be found here.


It is very important to note that while the Cornerstone Research study reports a decline in the absolute number of securities class action lawsuit filings, the rate of securities litigation relative to the number of U.S.-listed companies remains elevated compared to historical levels. As discussed below, though the absolute number of filings is down, the likelihood that any given U.S.-listed company will get hit with a securities lawsuit is actually up compared to long-term averages. Continue Reading

Meanwhile, Back at the FDIC Failed Bank Litigation Ranch

fdic2013As the global financial crisis has receded further into the past and as other issues have crowded to the top of the agenda, the remaining vestiges from the credit crisis have faded into the background. But though the peak of the crisis is now nearly seven years behind us, the crisis remnants continue to work their way through the legal system. In particular, a large part of the wave of failed bank litigation that the FDIC filed against the former directors and officers of many of the U.S. banks that have failed continues to grind on, as evidenced in the FDIC’s latest professional liability litigation update, which the agency posted on its website on July 28, 2015 (here). Continue Reading

Guest Post: Cyber & Privacy Policy Exclusions: Analyzing Differences, Negotiating Modifications

bob-bregmanThe exclusions are an important part of any liability insurance policy, but this is particularly true of cyber liability insurance polices. In the following guest post, Robert Bregman, CPCU, MLIS, RPLU, Senior Research Analyst, International Risk Management Institute, Inc., takes a look at the ten of the most common exclusions found in cyber liability and privacy insurance policies. This guest post is an excerpt taken from a longer article entitled “Cyber and Privacy Insurance Coverage” that appeared in the July 2015 edition of The Risk Report, and is copyrighted by IRMI. Learn more about The Risk Report here.


I would like to thank Bob for his willingness to publish his article on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to submit a guest post. Here is Bob’s article.




As is the case with virtually every type of management liability insurance, the true extent of coverage that any given policy provides is a function of its exclusionary language. Accordingly, this article will analyze both the differences and similarities between 10 of the most common exclusions found within cyber and privacy policies. Its goal is to assist the reader in negotiating exclusionary wording that maximizes the scope of coverage a policy will provide in the event of a claim. Continue Reading

Guest Post: Five Tips for Success in Cyber Insurance Litigation

Anderson_Roberta (1)Cyber liability insurance is a relatively new product and case law interpreting the policies is only now just developing. However, even at this relatively early stage, there have been some important coverage decisions, and more are coming, as more coverage disputes arise. In the following guest post, Roberta Anderson takes a look at the steps companies can take to decrease the likelihood of a coverage denial and of litigation. Roberta is an Insurance Coverage partner in the Pittsburgh office of K&L Gates LLP and co-founder of the firm’s global Cybersecurity, Privacy and Data Protection practice group. A version of this article previously appeared on Law 360.


I would like to thank Roberta for her willingness to publish her article on my site. I welcome guest posts from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to publish a guest post. Here is Roberta’s article.




Many insurance coverage disputes can be, should be, and are settled without the need for litigation and its attendant costs and distractions.  However, some disputes cannot be settled, and organizations are compelled to resort to courts or other tribunals in order to obtain the coverage they paid for, or, with increasing frequency, they are pulled into proceedings by insurers seeking to preemptively avoid coverage.  As illustrated by CNA’s recently filed coverage action against its insured in Columbia Casualty Company v. Cottage Health System,[i] in which CNA[ii] seeks to avoid coverage for a data breach class action lawsuit and related regulatory investigation,[iii] cyber insurance coverage litigation is coming.  And in the wake of a data breach or other privacy, cybersecurity, or data protection-related incident, organizations regrettably should anticipate that their cyber insurer may deny coverage for a resulting claim against the policy.

Before a claim arises, organizations are encouraged to proactively negotiate and place the best possible coverage in order to decrease the likelihood of a coverage denial and litigation.  In contrast to many other types of commercial insurance policies, cyber insurance policies are extremely negotiable and the insurers’ off-the-shelf forms typically can be significantly negotiated and improved for no increase in premium.  A well-drafted policy will reduce the likelihood that an insurer will be able to successfully avoid or limit insurance coverage in the event of a claim.

Even where a solid insurance policy is in place, however, and there is a good claim for coverage under the policy language and applicable law, insurers can and do deny coverage.  In these and other instances, litigation presents the only method of obtaining or maximizing coverage for a claim. Continue Reading

Guest Post: The Importance of Inferiority as a Basis for Leveling the SEC’s Enforcement Action Playing Field

CozenOConnor-Logo-RGBhiscox.logoOne of the controversies in which the SEC recently has found itself involved has been the agency’s use of its own in-house administrative tribunals, where some believe that the agency has an unfair advantage. The increased use of its administrative courts has also drawn court challenges. In the following guest post, Elan Kandel, a Member at the Cozen O’Connor law firm, and Neil Lipuma, Senior Vice President, Underwriting Leader—Financial Services of Hiscox USA take a look at the controversies surrounding the SEC’s use of its administrative tribunals and examines the recent court challenges to the agency’s practices.


I would like to thank Elan and Neil for their willingness to publish their guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to submit a guest post. Here is Elan and Neil’s guest post.




Earlier this month, the American League won this year’s Major League Baseball All-Star Game. The winner of the annual All-Star Game enjoys home-field advantage for the World Series.  Some have questioned whether there is actually a correlation between “home-field advantage” and winning the World Series. There is nothing to question – there is a distinct advantage. Since 1985, the team with the home-field advantage has won 23 of 29 World Series.[1]

The home field advantage extends beyond Major League Baseball.  The Securities and Exchange Commission (SEC) enjoys a pronounced home-field advantage when trying enforcement actions in its own administrative courts as opposed to federal district courts. According to a recent analysis in The Wall Street Journal, the SEC “[w]on against 90% of defendants before its own judges in contested cases from October 2010 through March of this year.”[2]  For fiscal year 2014, U.S. District Court Judge Jed Rakoff remarked that the SEC had won 100% of the actions tried in its administrative courts, while its success rate in federal court for the same period of time was only 61%.[3] Continue Reading

O.K., This Is a Big Deal: 7th Cir. Reinstates Neiman Marcus Consumer Data Breach Class Action

neimanmarcusIn a ruling that could provide an important boost future consumer data breach class action litigation, the Seventh Circuit has reinstated the Neiman Marcus data breach lawsuit, ruling that the district court erred in concluding that the plaintiffs’ fear of future harm from the breach was insufficient to establish standing to pursue their claims. As Alison Frankel said about the appellate court’s ruling in her July 21, 2015 post on her On the Case blog entitled “The Seventh Circuit Just Made it A Lot Easier to Sue Over Data Breaches” (here), “this is a really consequential decision.” The Seventh Circuit’s July 20, 2015 opinion in the Neiman Marcus case can be found here.

Continue Reading

Securities Suit Against Company That Used Stock Promotion Firm Survives Dismissal Motion

cytrxAs I have previously noted on this blog (most recently here), one of the more distinctive litigation phenomena in recent years has been the rash of securities class action lawsuits involved allegations that the defendant firms’ use of stock promotion firms had resulted in misrepresentations to investors. The difficulty for the plaintiffs in these cases is that under the U.S. Supreme Court’s 2011 Janus Capital Group’s decision (about which refer here), only the “maker” of an allegedly misleading statement can be held liable under Rule 10b-5, and in many of these cases it was the stock promotion firm, not the company itself, that “made” the allegedly misleading statement.


However, in a recent motion to dismiss ruling in one of these stock promotion firm securities class action lawsuit, the plaintiffs’ complaint survived the dismissal motion in part, even though the Court agreed that the company defendants could not be liable for statements “made” by the stock promotion firm. The ruling is interesting in and of itself and also for what it says about theories of liability that apparently survived the U.S. Supreme Court’s Janus ruling.


As discussed below, in a July 13, 2015 ruling, Central District of California Chief Judge George H. King, granted in part and denied in part the defendants’ motions to dismiss the securities class action lawsuit that plaintiff shareholders had filed against CytRx Corporation, certain of its officers, and its offering underwriters. A copy of Judge King’s ruling can be found here. Continue Reading

NERA Reports on Latest Wage and Hour Lawsuit Settlement Trends

time_clock_1One of the most significant areas of litigation in the employment practices liability arena has been the employee lawsuits seeking damages for employer violations of federal and state wage and hour laws. But while these kinds of lawsuits remain important, many of the trends in the settlements have shifted in the most recent years, according to a recent study from NERA Economic Consulting. The July 14, 2015 report, entitled “Trends in Wage and Hour Settlements: 2015 Update,” can be found here. NERA’s July 14, 2015 press release about the report can be found here. Continue Reading

Is the Dodd-Frank Whistleblower Bounty Program Gaining Momentum?

seclogoWhile the SEC’s Dodd-Frank whistleblower program has drawn significant attention, the fact is that the program has gotten off to a slow start. As of the end of the last fiscal year, the SEC had during the program’s history received a total of 10,193 whistleblower reports, but had made only 14 whistleblower awards. (Indeed, the agency had rejected more award requests – 19 – than awards given.) While the agency’s deliberate pace in making awards seems unchanged, the agency continues to make substantial awards and the aggregate value of the awards is gradually becoming quite considerable.


On July 17, 2015, the SEC announced yet another significant award, a $3 million award to a company insider whose information “helped the SEC crack a complex fraud.” Consistently with the law’s requirements, the agency did not disclose the name of the whistleblower or the company involved. The SEC’s July 17, 2015 press release can be found here. The redacted July 17, 2015 SEC Order determining the whistleblower award can be found here. Continue Reading