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: Securities Litigation

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Tesco Accounting Scandal Draws Securities Class Action Lawsuit

Posted in Securities Litigation
When Tesco PLC announced on September 22, 2014 that its previously forecast first-half profit had been overstated by £250 ($408.8 million), the news of the accounting irregularities was “serious,” as Tesco plc’s CEO of less than a month’s standing at the time put it.  The company also announced that the overstatement, first flagged when an … Continue Reading

A Whole Bunch of Interesting Litigation and Enforcement Statistics and Analyses

Posted in Securities Litigation
A single case may involve a host of interesting issues but sometimes the important lessons can only be discerned when many cases are considered collectively. This past week saw the release of some interesting analyses of aggregate litigation and enforcement statistics, each set of which told some interesting tales to tell and identified some important … Continue Reading

Advisen Releases Third Quarter Corporate and Securities Claims Trends Report

Posted in Securities Litigation
Continuing an recent downward trend, corporate and securities litigation filings during the third quarter declined, both compared to the prior quarter and compared to the third quarter last year, according a new report from Advisen, the insurance information firm. In its report, entitled “D&O Claims Trends: Q3 2014” (available here), Advisen reports that corporate and … Continue Reading

Fifth Circuit Reverses District Court, Holds Multiple Disclosures Establish Loss Causation Even if No Single Disclosure Alone Sufficient

Posted in Securities Litigation
A recurring question arising in class action securities litigation is what constitutes a “corrective disclosure” for purposes of satisfying the requirements for pleading loss causation. In the Amedisys securities class action litigation, the district court had examined the five partial disclosures on which the plaintiff sought to rely to establish loss causation and held that … Continue Reading

Foreign Investors Who Bought BP Shares Overseas Can Pursue English Law Claims in U.S. Court

Posted in Securities Litigation
The U.S. Supreme Court’s July 2010 decision in Morrison v. National Australia Bank seemed to sound the death knell for so-called “f-cubed” litigation – that is, lawsuits brought in U.S. courts under the U.S. securities laws by foreign investors who bought their shares in a foreign company on a foreign exchange. However, in an interesting … Continue Reading

Defendants Unable to Establish Absence of Price Impact, Class Certification Granted

Posted in Securities Litigation
In its long-awaited June 2014 decision in the Halliburton case, the U.S. Supreme Court declined to jettison the fraud on the market theory on which the presumption of reliance is based, but it did provide that defendants could attempt to rebut the presumption of reliance by showing that the alleged misrepresentation that is the basis … Continue Reading

Supreme Court Will Not Consider the Securities Act Statute of Repose Issue in the Indy Mac Case After All

Posted in Securities Litigation
As I had noted on this blog (here), one of the important securities law cases on the U.S. Supreme Court’s docket for the upcoming term involved the failed IndyMac bank. The Court had granted cert in the case to decide whether the three-year limitations period in Section 13 of the ’33 Act may be tolled … Continue Reading

SEC Announces Largest Yet Whistleblower Bounty Award of Over $30 Million

Posted in Securities Litigation
In what is by far the largest whistleblower bounty award yet under the Dodd-Frank’s whistleblower provisions, the SEC on September 22, 2014 announced an award of between $30 and $35 million to a whistleblower who provided original information that led to a successful SEC enforcement action. In the SEC’s Order providing for the award (here), … Continue Reading

Second Circuit Affirms Porsche Securities Suit Dismissal; Domestic Transaction Necessary But Not Sufficient to Invoke U.S. Securities Laws

Posted in Securities Litigation
On August 16, 2014, in a long-awaited decision that is sure to provoke comment and that could fuel disputes in future cases, the Second Circuit affirmed the dismissal of the securities suits hedge fund purchasers of certain swap agreements had filed against Porsche and its executives.   The plaintiffs contended that because they had completed … Continue Reading

Cornerstone Research Releases Securities Litigation Report for the First Half of 2014

Posted in Securities Litigation
According to the latest report from Cornerstone Research, the number of securities class action lawsuit filings during the first half of 2014 were down compared to historical filings semiannual filing levels although slightly higher than the number of filings in the first half of 2013. The report, which is entitled Securities Class Action Filings – … Continue Reading

SEC Files Enforcement Action Over Internal Controls Reporting: A Sign of Things to Come?

Posted in Securities Litigation
One of the noteworthy features of the Sarbanes-Oxley Act was the legislation’s creation of the requirement for reporting companies to provide a certification from management regarding the company’s internal controls. This requirement has not been the focus of a great deal of attention since the legislation was enacted in 2002. However if the administrative actions … Continue Reading

Whistleblower Bounties: A Good Idea? UK Regulators Say No

Posted in Securities Litigation
When Congress passed the Dodd-Frank Act four years ago, one of the legislation’s signature features was the creation of potentially massive bounties for whistleblowers that reported financial fraud to the SEC. The possibility of recovering a bounty, which could range from ten to thirty percent of recoveries over $1 million, seems to have encouraged whistleblowers … Continue Reading

Advisen Releases 2014 First Half Corporate and Securities Litigation Report

Posted in Securities Litigation
The level of all corporate and securities filings continued to decline in the second quarter of 2014 as filing activity returns to levels that prevailed before the financial crisis, according to the latest quarterly D&O claims activity report of Advisen. According to the report, filing levels in the second quarter reflected the “fewest securities and … Continue Reading

Guest Post: Halliburton: Procedures and Percentages Part II—Should We Expect Any Changes Following the Supreme Court’s Ruling?

Posted in Securities Litigation
Following the U.S. Supreme Court’s ruling earlier this week in the Halliburton case, questions have continued to swirl about the implications of the court’s decision. In the following guest post, Jennifer Spaziano of the Skadden law firm, takes a look at the impact the Halliburton decision will have on securities class action procedures, outcomes and … Continue Reading

Halliburton: U.S. Supreme Court Declines to Overturn Basic, Allows Defendants to Rebut Presumption of Reliance

Posted in Securities Litigation
On June 23, 2014, the U.S. Supreme Court released its long-awaited decision in Halliburton Co. v. Erica P. John Fund, in which the Court had taken up the question whether or not to set aside the presumption of reliance based on the fraud on the market theory that the Court first recognized in its 1988 … Continue Reading

Second Circuit Vacates Judge Rakoff’s Rejection of SEC’s Citigroup Settlement

Posted in Securities Litigation
On June 4, 2014, in a long-awaited but not unexpected opinion (here), the Second Circuit ruled that Southern District of New York Judge Jed Rakoff had improperly rejected the $285 million settlement of the SEC’s enforcement action against Citigroup. Because the case involved the question of whether or not parties may enter into “neither admit … Continue Reading