Here at The D&O Diary, we cover the liabilities of corporate directors and officers. Geopolitical concerns are not typically part of our beat. But as we all finish up the year and get ready to start 2024, geopolitical concerns are necessarily part of what we are worried about in the current climate. That is true as a general matter and within the specific context of this blog; as the evidence has shown this year, geopolitical concerns have translated into corporate and securities lawsuits, and there is plenty to worry about for next year as well.Continue Reading Geopolitical Issues and D&O Risk Exposure

As a result of a host of recent developments – including the War in Ukraine, trade tensions with China, and growing issues involving digital assets – several long-standing regulatory regimes have become increasingly important for companies and their executives. These regulatory regimes include U.S. sanctions, export controls, anti-money laundering (AML) and anti-bribery and corruption laws. According to a recent memo from the Skadden law firm entitled “Why Directors and Executives Need to Pay Attention to Sanctions, Money Laundering, and Export Rules” (here), boards and senior management need to be especially vigilant with respect to these laws as the company officials can become targets of enforcement actions – indeed, directors and officer have been named personally in both civil and criminal enforcement actions involving these laws and regulations.
Continue Reading D&O Risks Relating to Trade Sanctions, Money Laundering, and Export Rules

With the news about the coronavirus outbreak dominating the headlines, other important stories have faded into the background — though they definitely have not gone away. Among these important continuing stories is the U.S. trade war with China. The frontlines of this trade war are on the battlefield of economic competition, which these days includes, among other things, export and import controls and other coercive measures. As one commentator has put it, the “highest-profile example of the United States’ use of targeted coercive measures against China is its yearlong campaign against Huawei, China’s national-champion telecommunications company.” And as a recently filed lawsuit demonstrates, among the implications of the two countries’ competition – and specifically, the U.S. measures targeting Huawei – is a risk that affected companies can be exposed to government investigations and also to D&O claims.
Continue Reading Semiconductor Company Hit with China Trade War-Related Securities Suit

seadrillIn a prior post, I noted that among the implications of the international trade sanctions is the possibility that companies affected by sanctions could face D&O claims. Among the risks the sanctions program presents is the possibility that a company dealing with sanctions-related issues could face a follow-on securities lawsuit, as investors seek to hold the company and its senior officials liable for share prices declines following disclosure of sanctions-related issues.

In the Seadrill Limited Securities Litigation, a securities class action lawsuit pending in the Southern District of New York, investors sued the company, a subsidiary, and certain of its directors and officers, for the company’s elimination of its dividend and loss of significant business with a Russian oil company subject to international sanctions following Russia’s invasion and annexation of Crimea. On June 20, 2016, in an interesting opinion (here), Southern District of New York Lorna Schofield granted the defendants’ motion to dismiss the Seadrill case. Due to the case’s factual circumstances, the opinion makes for some interesting reading. In any event, the case represents an important example of the possibilities for D&O claims arising from sanctions-related issues.
Continue Reading Russian Trade Sanctions-Related Securities Lawsuit Dismissed

vascoIn 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 has self-reported a possible violation of federal prohibitions against sales of goods to parties in Iran. A copy of the plaintiff’s complaint can be found here.
Continue Reading The Developing Phenomenon of Trade Sanction-Related Follow-On Civil Litigation