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Are We Witnessing the Sunset of the U.S. Public Company?

There is a long and venerable tradition of predicting the demise of the American public corporation. For example, back in 1989, Harvard Business School Professor Michael Jensen famously questioned whether we were seeing the “eclipse of the public corporation.” In a February 2017 paper entitled “Is the American Public Corporation in Trouble?” (here) University of Arizona … Continue Reading

Guest Post: The Importance of the Business Judgment Rule

The business judgment rule is one of the important principles involved when questions of board and director liability are raised. In the following guest post, Bernard Sharfman, an associate fellow of the R Street Institute and a member of the Journal of Corporation Law’s editorial advisory board, takes a look at the way that the … Continue Reading

Guest Post: Supreme Court Nominee’s Skeptical View of Securities Litigation, Agency Deference

President Trump’s nomination of Tenth Circuit Justice Neil Gorsuch to fill the Supreme Court seat vacated by the late Justice Antonin Scalia has attracted a great deal of commentary and raised a host of questions about the proposed new Justice’s views on a variety of different subjects. In the following guest post, attorneys from the … Continue Reading

Thinking About the Duty to Cooperate

Most liability insurance policies have provisions stating that the insured has a duty to cooperate with the insurer in the investigation and defense of a claim. In most claims situation, this requirement is not an issue. From time to time, however, questions arise whether or not the insured has fulfilled its duty to cooperate. Questions … Continue Reading

Vivendi: A Victory for Plaintiffs on the Price Maintenance Theory and on Loss Causation

In the following guest post, David Topol and Jennifer Williams of the Wiley Rein law firm  take a look at the Second Circuit’s September 27, 2016 decision in the Vivendi case and in particular at the appellate court’s analysis of two critical issues affecting damages in securities litigation – the price maintenance theory and loss … Continue Reading

The SEC Wants You to Know that It Intends to Protect Whistleblowers’ Rights

The SEC has long made it clear that it intends to protect whistleblowers and to suppress activities it believes will have the effect of discouraging whistleblower activity. The agency recently launched enforcement actions against companies that had incorporated various waivers in employee severance agreements that discouraged employees from reporting possible securities law violations to the … Continue Reading

FTC Holds Private Information Disclosure In and Of Itself Sufficient Injury to Support Unfair Practices Claim

One of the recurring issues that has arisen as claimants and regulators have pursued cybersecurity-related claims against companies that have experienced a data breach is the question of what type or quantum of claimed injury is sufficient to sustain a claim. This issue has recurred in consumer cybersecurity-related damages actions and it has also arisen … Continue Reading

Eighth Circuit Split Spotlights Tensions with the Responsible Corporate Officer Doctrine

One of the bedrock principles of our legal system is that criminal liability attaches only to those who act with intent or knowledge – that is, as the legal scholars say, with mens rea (or a guilty mind). The “responsible corporate officer doctrine” sits uneasily with these notions, imposing liability as it does on corporate … Continue Reading

Professional Services Exclusion Not Triggered Where Allegations Did Not Involve Specialized Knowledge

Regular readers know that one of my hobby-horse issues is the way that some D&O insurers try to deny coverage for claims in reliance on an overbroad assertion of the professional services exclusion typically found in most private company D&O insurance policies. A D&O insurer’s sweeping assertion of exclusion’s preclusive affect can be a particular challenging … Continue Reading

Fourth Circuit: Guilty Pleas Trigger D&O Policy Exclusion and Insurer’s Right to Seek Recoupment of Previously Paid Defense Expenses

It sometimes comes as a surprise to some policyholders that D&O carriers contend that they have the right to try to recover amounts they have paid as defense expenses if it turns out that coverage for a claim is precluded by a policy exclusion. However, an insurer’s right of defense expense recoupment is by now … Continue Reading

Should There Be More Litigation Against Corporate Officers? (Uh, No.)

Over the past fifteen years, there has been a steady progression of corporate scandals, from Enron to options backdating to the excesses that led to the global financial crisis. These debacles were followed by waves of shareholder litigation. However, according to one legal scholar, the shareholder lawsuits all too often concentrate on enforcing legal duties … Continue Reading

Guest Post: Give Notice on Your D&O Claim…Yesterday

A frequently recurring management liability insurance coverage issue involves the question of whether or not the policyholder has given timely notice as required under the policy, as I have discussed in prior posts on this blog (most recently here). Among the many kinds of notice issues that can arise are questions involving multiple or interrelated … Continue Reading

Cornerstone Research: Securities Suit Filings Holding Steady But Cases Are Smaller and Involve Smaller Companies

The number of securities class action lawsuit filings in 2014 was about the same as in 2013, but the cases that were filed were smaller than in the past, according to the annual securities litigation report from Cornerstone Research. However, the likelihood that a public company will be the subject of a filing remained above … Continue Reading

Securities Litigation: A Double Whammy for Foreign Investors When U.S. Securities Suit Claimants Recover Financial Misrepresentations Losses?

After investors recently launched a securities class action lawsuit against Petrobras and certain of its directors and officers on behalf of those who purchased the company’s ADSs on U.S. exchanges, I speculated on whether or not investors who purchased their Petrobras shares in Brazil and are therefore precluded from participating in the U.S. lawsuit might … Continue Reading

Guest Post: Evolutionary Change in the Liability of an Independent Director in India

  The recent Satyam scandal and ensuing litigation put the duties of independent directors under scrutiny.  The recently enacted Companies Act of 2013 addressed a number of issues relating to the duties and liabilities of independent directors.  In the following guest post, Burzin Somandy of Somandy & Associates in Mumbai takes a look at the … Continue Reading

Barclays Libor-Scandal Securities Suit Survives Renewed Dismissal Motion

The Libor-scandal based securities suit filed against Barclays and certain of its directors and offices will now be going forward. The case was initially dismissed, but on appeal the Second Circuit vacated a part of the dismissal ruling and returned the case to the district court for further proceedings. The defendants filed a renewed motion … Continue Reading

Guest Post: Cybersecurity and Cyber Governance: Understanding and Implementing the NIST Cybersecurity Framework

On February 12, 2014, the National Institute of Standards and Technology (NIST), pursuant to an Executive Order from President Obama, released the first version of the Framework for Improving Critical Infrastructure (here), to identify standards and practices to promote the protection of critical infrastructure from cyberattack. In a recent speech, SEC Commissioner said that the … Continue Reading

Professional Liability Underwriting Society to Host Regional Symposium in Hong Kong on May 27, 2014

On May 27, 2014, the Professional Liability Underwriting Society (PLUS) will host its 2014 Professional Liability Regional Symposium in Hong Kong. This half-day program will focus on regulatory and corporate fraud issues facing the Asian marketplace. PLUS’s presentation of this event marks the third year that PLUS has hosted a regional educational and networking event … Continue Reading

Thinking About the Dewey & LeBeouf Criminal Indictment and Law Firm Management Liability Insurance

The indictment last week of the top officials from the collapsed Dewey &  LeBouef law firm is merely the latest development in the long-running sequence of events following the law firm’s demise. The indictment (and the accompanying SEC enforcement action) paints a vivid picture of the desperate efforts of the law firm’s top officials to … Continue Reading

The Hong Kong New Companies Ordinance: Director Liability and D&O Insurance Implications

Next Monday, March 3, 2014, the Hong Kong New Companies Ordinance will go into effect. The Hong Kong Legislative Council enacted this overhaul of the existing companies laws provisions in July 2012, and on October 25, 2013, the Secretary for Financial Services and the Treasury published the requisite notice to implement the upcoming March 3 … Continue Reading

NERA: Canadian Securities Class Action Filings Steady in 2013

There were ten securities class action lawsuits filed in Canada in 2013, the same number as were filed in 2012 and only slightly below the annual average number of 11. 6 filings during the period 2006-2012, according to a February 19, 2014 report from NERA Economic Consulting entitled “Trends in Canadian Securities Class Actions: 2013 … Continue Reading