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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Guest Post: Second Circuit Rules for Defendants in Landmark Insider Trading Case

Posted in Securities Litigation
In the following guest post, Susanna Buergel, Charles Davidow, Andrew Ehrlich, Brad Karp, Daniel Kramer, Richard Rosen and Audra Soloway, all of whom are litigation partners at Paul, Weiss, Rifkind, Wharton & Garrison LLP who are members of the Firm’s Securities Litigation Practice group explain the significance of the Second Circuit’s decision United States v. Newman. … Continue Reading

Law Firm Organizes U.K. Lawsuit Against Tesco, Financed by Litigation Funding Firm

Posted in Securities Litigation
After U.K.-based Tesco PLC’s announcements of accounting “irregularities” and the subsequent departure of the company’s Board chair, investor lawsuits soon followed. But as discussed here, these lawsuits were filed in the United States, on behalf of investors who had purchased American Depositary Receipts in the United States. In light of the U.S. Supreme Court’s holding … Continue Reading

Securities Trial Jury Holds Former Longtop CFO Responsible for One Percent of Damages

Posted in Securities Litigation
As noted in a post yesterday, last Friday a federal jury held Derek Palaschuk, the former CFO of Longtop Financial, liable for the company’s financial misrepresentations. On Monday, the jury deliberated further on the percentage of investors’ damages for which Palaschuk is responsible. According to Nate Raymond’s Nov ember 24, 2014 Reuters article (here) the … Continue Reading

Rare Securities Suit Trial Produces Jury Verdict Against Former Longtop Financial CFO

Posted in Securities Litigation
On November 21, 2014, after a securities class action trial that lasted less than three days and after less than a day of deliberation, an eight-person jury entered a verdict holding former Longtop Financial Technologies CFO Derek Palaschuk liable for the company’s alleged misrepresentations about its financial condition. According to Nate Raymond’s November 21, 2014 … Continue Reading

Two Legal Surveys: Foreign Disputes in U.S. Courts and Fee-Shifting Bylaws

Posted in Securities Litigation
An ever-present anxiety for globally-active non-U.S. companies is the possibility that they might find themselves having to deal with litigation in U.S. courts. This concern is warranted because certain attributes of the U.S. legal system – including the absence of loser pays attorneys’ fee model and the availability of discovery and jury trials – provide … Continue Reading

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