Archives: Securities Litigation

Subscribe to Securities Litigation RSS Feed

Does the Omnicare’s Holding Regarding Opinion Apply to Securities Fraud Claims?

In its March 2015 decision in the Omnicare v. Laborers District Council Construction Industry Pension Fund (here), the U.S. Supreme Court held that an issuer may be liable for opinions set forth in a registration statement if the issuer did not genuinely hold the stated opinion, or if the issuer failed to disclose material facts … Continue Reading

Uptick in Securities Suits Against U.S.-Listed Chinese Companies

Long-time readers of this blog will recall that in 2011, there was a rash of U.S. securities class action lawsuits filed against U.S.-listed Chinese companies. Many of these companies had obtained their U.S.-listings by way of a reverse merger with a U.S.-listed public shell. The 39 securities suits filed in 2011 against U.S.-listed Chinese companies … Continue Reading

New SEC Enforcement Action Database from NYU and Cornerstone Research

On October 27, 2015, Cornerstone Research in conjunction with the New York University Pollock Center for Law & Business and the Leonard N. Stern School of Business to launch the Securities Enforcement Database (SEED). As described in the organizations’ joint October 27, 2015 press release (here), the database will track record and information relating to … Continue Reading

Ninth Circuit: Embezzler Executive’s Knowledge Can Be Imputed to Company in Innocent Third Party-Filed Securities Suit

For purposes of determining the scienter of a corporate entity defendant under the federal securities laws, a company’s executives’ knowledge generally is imputed to company. There is an exception to these general principles – the “adverse interest exception” – which provides that an executive’s knowledge will not be imputed to the company if the executive … Continue Reading

SEC Files Record Number of Independent Enforcement Actions in Fiscal 2015

According to the agency’s recently released enforcement activity statics, the SEC’s overall enforcement activity and the number of independent enforcement actions both increased in the fiscal year 2015 (which just ended on September 30) compared to prior years. More specifically, during fiscal 2015, the agency filed a record number of independent actions for violations of … Continue Reading

Money Laundering Allegations and Follow-On Securities Litigation

In the wake of the 9/11 terrorist attacks, Congress enacted or expanded a number of laws regarding the global financial system in order to combat money laundering and promote national security. As I have noted in prior post (most recently here), regulatory enforcement activity under these laws represents a potentially significant new area of potential … Continue Reading

Game Over?: Del. Chancery Court Rejects Disclosure-Only Settlement in H-P/Aruba Networks Merger Objection Lawsuit

Stating his belief that the merger objection litigation dynamic represents a “systemic” problem that has resulted in a “misshapen legal system,” Delaware Chancery Court Vice Chancellor Travis Laster rejected the proposed disclosure-only settlement of litigation that had been filed objecting to Hewlett-Packard’s $2.7 billion acquisition of Aruba Networks. In an October 9, 2015 settlement hearing … Continue Reading

Guest Post: Access to Internal Investigation Records by Shareholders

In many instances when allegations of wrongdoing surface at a company, the appropriate course for the company’s board will be to appoint an independent committee to investigate the allegations. The investigation can be conducted in a way to preserve confidential information and privileges. However, recent case law developments underscore the fact that in some instances the … Continue Reading

Tesco Securities Suit: Applicability of U.S. Securities Laws to Unlisted ADRs?

It has been over five years since the U.S. Supreme Court’s June 2010 decision in Morrison v. National Australia Bank restricted the ability of shareholders of non-U.S. companies who purchased their shares outside the U.S. to file securities fraud lawsuit in U.S. courts under the U.S. securities laws. During that five year period, the lower … Continue Reading

Volkswagen Vehicle Emissions Scandal Triggers U.S. Securities Suit, Dutch Collective Action Initiative

The news that Volkswagen employed sophisticated software-based “defeat devices” in order to permit a number of its diesel-engine models to appear to meet U.S. emissions standards has dominated the headlines in the business pages over the last few days. The news has already led to the resignation of its embattled CEO, Martin Winterkorn. In addition … Continue Reading

Guest Post: The Fifth Circuit Takes the Risk Out of Materialization-Of-The-Risk Cases

In the following guest post, Michael J. Biles of the King & Spalding law firm takes a look at the analysis of the materialization-of-the-risk issues in the Fifth Circuit’s September 8, 2015 decision in the BP Deepwater Horizon securities class action lawsuit. As Michael asserts below, the Fifth Circuit’s decision opinion essentially removes the risk of … Continue Reading

Guest Post: Winning the Securities Litigation Damages Battle After Losing the Liability War

Almost every securities class action lawsuit that is not dismissed eventually settles; very few of the cases actually go to trial. However, there have been the rare cases that have gone to trial and there are some important lessons to be learned from these cases. In the following guest post, Daniel Tyukody of the Goodwin … Continue Reading

Guest Post: Update on Economic Analysis of Price Impact in Securities Class Actions Post-Halliburton II

In its June 2014 opinion in Erica P. John Fund, Inc. v. Halliburton Co., the United States Supreme Court held that in connection with a motion for class certification in a securities class action lawsuit, a defendant should have the opportunity to try to rebut the presumption of reliance by showing that the alleged misrepresentation … Continue Reading

Guest Post: Court of Appeals Warns Against Complacency in the PSLRA’s Safe Harbor

One of the most important ways a company can try to avoid potential liability under the federal securities laws is to incorporate precautionary disclosure in its public statements and regulatory filings. However, in a June 23, 2015 decision in In re Harman International Industries Securities Litigation (here), the D.C. Circuit provided a reminder to companies … Continue Reading

Guest Post: Second Circuit Revives Securities Fraud Class Action Against the Manufacturer of the Keurig Coffeemaker

One of the recurring issues with which federal district courts wrestle is the right way to assess securities complaint allegations based on confidential issues. Another recurring issue has to do with the assessment of trading in company securities by corporate insiders pursuant to Rule 10b5-1 trading plans. A recent decision by Second Circuit addressed both … Continue Reading

Petrobras Securities Suit: Judge Rakoff Rejects Company’s “Adverse Interest” Argument; Rules Brazilian Investors Must Arbitrate Brazilian Securities Law Claims

In an interesting opinion addressing several of the critical issues in the U.S. securities lawsuit arising out of Petrobras bribery scandal, on July 30, 2015, Southern District of New York Judge Jed Rakoff denied in part and grated in part the defendants’ motions to dismiss. Among other things, Judge Rakoff rejected the company’s “adverse interest” … Continue Reading

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

In 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 … Continue Reading

Cornerstone Research Releases Midyear Securities Litigation Report

The 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. … Continue Reading

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

As 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 … Continue Reading

Advisen Report: Declining Corporate and Securities Litigation Filings Continued in Second Quarter, But Most Recent Quarterly Trend May be Upward

The recent annual trend toward declining numbers of corporate and securities lawsuit filings continued in the first half and second quarter of 2015, although second quarter activity did increase slightly compared to the prior quarter, according to a report from the insurance industry information firm, Advisen. If the increase in the second quarter numbers compared … Continue Reading

Another U.S. Securities Suit Arising from Overseas Corruption Investigation

In an earlier post, I noted that a significant factor driving securities litigation filings so far this year has been the rising number of U.S. securities lawsuits involving non-U.S. companies. A number of different factors are contributing to the filing of these suits, but among the factors is the increasing numbers of U.S.-listed non-U.S. companies … Continue Reading

Guest Post: New York’s Highest Court Brings Finality to RMBS Repurchase Claims

On June 11, 2015, in a closely watched case, the New York Court of Appeals, New York’s highest court, decided when the statute of limitations begins to run for claimants alleging breaches of the representations and warranties provisions in residential mortgage backed securities.   As Robert Fumerton and Alexander Drylewski of the Skadden, Arps, Slate … Continue Reading

Year-to-Date Securities Suit Filings Disproportionately Involve Non-U.S. Companies

Historically, non-U.S. companies listed on U.S. exchanges were sued in securities class action lawsuits less frequently than were listed U.S. companies. For several years now, according to NERA, non-U.S. firms have represented about 16% of all companies listed on the U.S. exchanges, but according to Cornerstone, for the period 1997-2013, the average percentage of securities … Continue Reading