The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Director and Officer Liability

Subscribe to Director and Officer Liability RSS Feed

Guest Post: Can Shareholders Bring “Direct” Mismanagement Claims Against Directors of Maryland Corporations?

Posted in Director and Officer Liability
In this guest post, Joseph Collins, a partner at the DLA Piper law firm, examines the extent to which mismanagement claims can be brought directly against directors of a Maryland corporation, as opposed to derivatively. I would like to thank Joe for his willingness to publish his article on my site. I welcome guest post submissions … Continue Reading

Thinking about the Criminalization of American Business

Posted in Director and Officer Liability
One trend in recent years that has been impossible for anyone following the business pages to miss has been the steadily increasing numbers of huge monetary settlements that companies have reached with U.S. regulators and prosecutors. These settlements often involve staggeringly large amounts of money, often funded by shareholders.  The Bank of America’s recent $17 … Continue Reading

While You Were Out

Posted in Director and Officer Liability
I have no idea where summer went, but with the passage of Labor Day weekend there’s no denying that summer is over and that it is time to get back to work. For those of you who were fortunate enough to take some time off this summer or who maybe just found it a little … Continue Reading

Guest Post: Bylaws and Arbitration

Posted in Director and Officer Liability
For many years, business groups and corporate representatives have tried to reform shareholder litigation through legislation and case law development, with mixed success. However, in more recent years an interesting new initiative has emerged – the attempt to achieve litigation reform through amendments to corporate bylaws. This effort received a significant boost last year when … Continue Reading

On the Frontiers of Corporate Litigation and Liability: Inversion Transactions and a Proposed Duty to Warn

Posted in Director and Officer Liability
Among the developments dominating the business headlines in recent weeks have been two unrelated stories – the rising wave of so-called “inversion” transactions in which U.S. companies acquire foreign firms to avoid U.S. tax laws and the revelation of previously undisclosed problems with the ignition switches in certain GM cars that allegedly resulted in numerous … Continue Reading

India’s Securities Regulator Imposes Massive Penalties on Satyam’s Founder and Other Executives

Posted in Director and Officer Liability
On July 16, 2014, India’s securities regulator, the Securities and Exchange Board of India (SEBI), entered an order (here) against the founder and former executives of Satyam Computer Services to disgorge over $306 million in allegedly ill-gotten gains from their role in the scheme to falsify the company’s financial statements, as well as at least … Continue Reading

Guest Post: Texas Supreme Court Guts Minority Shareholder Oppression Claims

Posted in Director and Officer Liability
On June 20, 2014, the Texas Supreme Court issued its opinion in Ritchie v. Rupe, in which the Court addressed the rights and remedies of minority shareholders of Texas companies. In the following guest post Kara Altenbaumer-Price, Vice President, Management & Professional Liability Counsel for USI Southwest / USI Northwest, takes a look at the … Continue Reading

Georgia Supreme Court Affirms, Elucidates Business Judgment Rule – and Its Limitations

Posted in Director and Officer Liability
A recurring issue in FDIC litigation against the former directors and officers of failed banks has been whether the business judgment rule insulates the defendants  from claims of ordinary negligence. This question has been particularly important in Georgia, where there were more bank failures than any in other state and consequently more failed bank litigation. … Continue Reading

More About Stories We’re Following

Posted in Cyber Liability, Director and Officer Liability
Cybersecurity as a D&O Liability Issue: I have noted in prior posts on this site (refer for example here) that cybersecurity represents, among other things, a D&O liability exposure. The recent lawsuits filed against Target (refer here) and Wyndham Worldwide (refer here) underscore this point. In addition, at least according to a July 7, 2014 Bloomberg … Continue Reading

Is Climate Change a D&O Insurance Issue?

Posted in Director and Officer Liability
In a series of letters sent to individual board members of various major energy companies and to a number of participants in the directors and officers liability insurance industry, three environmental groups contend that climate change denial by energy industry representatives presents a risk of personal liability to the individual energy company board members. The … Continue Reading

Wyndham Worldwide Board Hit with Cyber Breach-Related Derivative Lawsuit

Posted in Cyber Liability, Director and Officer Liability
 In what is the latest example of the potential cybersecurity-related liability of corporate boards, a shareholder for Wyndham Worldwide Corporation has initiated a derivative lawsuit against certain directors and officers of the company, as well as against the company itself as nominal defendant, related to the three data breaches the company the company and its … Continue Reading

JOBS Act: Only Two Years Old and Already Revision Proposals are Circulating

Posted in Director and Officer Liability
The Jumpstart our Business Startups (JOBS) Act is only just two years old but there are already apparently Congressional initiatives to revise one of the centerpieces of the legislation, the much-vaunted crowdfunding provisions that have not yet in fact even gone into effect. According to a May 1, 2014 Wall Street Journal article entitled “Frustration … Continue Reading

Survey: Existing and Potential Bank Directors Unwilling to Serve Due to Fear of Personal Liability

Posted in Director and Officer Liability
Banking industry commentators have long contended that aggressive efforts by the FDIC and others to hold bank developers liable is having a chilling effect on the willingness of existing and potential directors to serve on bank boards. An April 2014 American Association of Bank Directors report of a recent survey of banks and savings institutions … Continue Reading

Liability Exposures of Audit Committee Chairs

Posted in Director and Officer Liability
One frequently asked question is whether members of a corporate board’s audit committee face heightened liability exposures. Two recent SEC enforcement actions seem to underscore that audit committee chairs do face liability exposures. Though both cases involve somewhat unusual circumstances, they seem to suggest that the “gatekeepers” on which SEC has said it will be … Continue Reading

Cornerstone Releases 2013 Study of M&A Lawsuit Settlements

Posted in Director and Officer Liability
Only two percent of M&A lawsuit that settled in 2013 involved a monetary payment to shareholders, according to the latest report on M&A lawsuit settlements from Cornerstone Research. The report, entitled “Settlements in Shareholder Litigation Involving Mergers and Acquisitions: Review of 2013 M&A Litigation” (here), is the second part of a two-part series on M&A … Continue Reading

Antitrust Enforcement and Corporate Risk Exposure

Posted in Director and Officer Liability
As a result of heightened regulatory scrutiny and changing enforcement priorities around the world, “cartel enforcement is a hot topic in boardroom,” according to a March 29, 2014 Economist magazine article entitled “Just One More Fix” (here). According to the article, antitrust enforcement authorities are getting “better at detecting cartels and bolder in punishing them.” … Continue Reading

Guest Post: BSA/AML Enforcement Trends and D&O Liability

Posted in Director and Officer Liability
In the following guest post, Christopher Laursen, Senior Vice President and Chair, Financial Institutions and Bank Practice at NERA Economic Consulting, takes a look at the current enforcement trends involving the Bank Secrecy Act and the Anti-Money Laundering regulations. I welcome guest submissions from responsible persons on topics of interest to readers of this blog. If … Continue Reading