Francis Kean

One of the perennial questions for D&O insurance buyers and their advisors is: What is the right amount of insurance to buy? In the following guest post, Francis Kean, Partner in the Financial Lines Team at McGill and Partners, takes a look at a recent court judgment in which the court raised serious questions about a company’s limits selection and proposes five lessons that may be drawn from the case. I would like to thank Francis for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.

Continue Reading Guest Post: Are Companies Buying Enough Directors & Officers Insurance?

On April 21, 2025, Paul Atkins, President Trump’s nominee, was officially sworn in as the 34th Chair of the Securities and Exchange Commission. Atkins, who previously served as an SEC Commissioner from 2002 to 2008 during the George W. Bush administration, brings extensive prior SEC experience to his new post. In many ways that are already in evidence at the SEC in the early days of the Trump administration, the new leadership is likely to result in many significant changes in direction at the agency.

Continue Reading Paul Atkins Chair Sworn In as SEC Chair

Every now and then, a court decision catches our attention. That was the case with the Ninth Circuit’s March 20, 2025, opinion, in which the court held that coverage for settlement amounts and defense costs incurred in an underlying employee and client poaching lawsuit was barred by California Insurance Code Section 533. Section 533 bars coverage for loss caused by “the willful act of the insured.” The troublesome thing about this opinion is that the appellate court held coverage was precluded even though the willful conduct involved was merely alleged, not proven.

Continue Reading Are Allegations Sufficient to Trigger California Ins. Code Section 533?

The number of securities class action lawsuit filings involving accounting allegations increased slightly in 2024 compared to 2023, but the 2024 accounting-related filings remained below the long-term annual average number of such filings, according to the latest annual report from Cornerstone Research. The number of accounting-related settlements in 2024 remained steady compared to 2023, while the median, average, and total settlement values all decreased compared both to 2023 and long-term values.

Continue Reading Accounting-Related Securities Suit Filings Increased, Settlement Values Decreased

In its June 2023 decision in the Slack case, the United States Supreme Court held that, order to establish standing, Section 11 plaintiffs must plead and prove that the shares they purchased in a direct listing offering are traceable to the allegedly misleading registration statement. However, as I noted at the time, while the Court was clear that Section 11 plaintiffs must establish traceability, the Court had little to say about what is required to establish the tracing.

In a recent ruling in a securities lawsuit against Palantir Technologies, which went public in a direct listing, the Court granted the defendants’ motion to dismiss the plaintiffs’ Section 11 claim, after finding that the alternatives the plaintiffs proposed to try to establish tracing were insufficient. The practical implication of the Court’s decision is that the strict tracing requirements may, as an April 16, 2025, memo from the Paul Weiss law firm put it, “effectively insulate companies that go public through a direct listing from Section 11 liability.”

Continue Reading High Bar to Establish Section 11 Standing for Direct Listing Purchasers

The Trump Administration has already signaled its intent to take a far different approach with respect to ESG-related issues than the Biden administration. Among other things, the White House has issued orders ordering a dismantling of federal agency DEI initiatives, and the SEC has withdrawn its court defense of its recently issued Climate Change Disclosure guidelines. These actions suggest that other governmental authorities’ climate change-related initiatives – such as those of the EU and of the various U.S. states — could increase in importance, as the U.S. federal government changes its policy direction. However, the EU has recently indicated its intent to step back some of its initiatives. And the Trump Administration has now issued an executive order expressly targeting what it calls “state overreach” with respect to climate change policies.

Continue Reading Executive Order Targets State Climate Change-Related Initiatives

Those trying to gauge what Trump 2.0 means for directors’ and officers’ liability will want to read the Wall Street Journal’s April 13, 2025, article entitled “Trump Administration Retreats from White-Collar Criminal Enforcement” (here). The article contains statements of large law firm partners expressing their anxiety that the administration’s approach to white-collar crime prosecution will mean “significant slowdown” in law firm revenue from criminal defense work. But what may be bad news for law firms could be good news for corporate executives, because the Trump administration’s approach may mean corporate executives could face a reduced risk of criminal prosecution, at least for certain kinds of criminal allegations.

Continue Reading Do Trump Admin Policies Mean Reduced Risk of White-Collar Prosecutions?

In parallel actions last week, the U.S. Attorney for the Southern District of New York and the SEC charged a tech exec with securities fraud in connection with fundraising for his company based on misrepresentations about the company’s AI capabilities. The exec, Albert Saniger, allegedly raised over $42 million by misrepresenting to investors that his company’s app used AI technology to complete online shopping purchases, when in fact the purchases were completed manually by contract workers located in the Philippines and elsewhere. As discussed below, there are several interesting features to these AI-related allegations.

Continue Reading Tech Exec Charged with AI Washing-Related Securities Fraud

As I have noted in prior posts (most recently here), courts have over time evinced a continuing skepticism of securities class action lawsuit allegations based on short-seller reports. The short sellers’ financial incentives and their reliance on anonymous sources have caused courts to be wary of securities suit allegations based on their reports. In a recent Fourth Circuit decision in a case in which the plaintiffs’ allegations were largely relied on a short-seller’s report, the appellate court affirmed the district court’s dismissal of the case, based on the plaintiffs’ failure to adequately allege loss causation. The court’s opinion provides several interesting observations about securities suit allegations based on short sellers’ reports.

Continue Reading 4th Circ.: Short Seller Report’s Allegations Insufficient to Establish Loss Causation

The preclusive effect of the “bump-up” exclusion typically found in most D&O insurance policies has been frequently litigated topic. In the following guest post, Barry Buchman, Michael Scanlon, and Jake Todd review recent case law developments relating to the scope of the bump-up exclusion’s preclusive effect. Buchman is a partner, Scanlon is a counsel, and Todd is an associate in the insurance recovery group of Haynes and Boone, LLP. This article is an update of the authors’ prior guest post about the bump-up exclusion on this site, here. I would like to thank the authors for allowing me to publish their author as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.

Continue Reading Guest Post: Bump-Up Exclusion: Recent Delaware Decisions Support Policyholders