One of the more interesting developments in the financial markets this year has been the number of so-called “unicorns” that have completed their IPOs. Among others, Uber, Lyft and Instagram made their debut in recent weeks. Some of these companies have stumbled as they began trading, and indeed some have already been sued in securities class action lawsuits (as I noted here with respect to Lyft). Among the companies completing IPOs in recent weeks is Jumia Technologies AG, an African e-commerce platform that has been called Africa’s first unicorn, whose American Depositary Shares began trading on the NYSE on April 12, 2019. Even though Jumia’s securities have been trading barely a month, the company has been hit with a securities lawsuit, following a short-seller’s report about the company. Continue Reading
SEC Public Company Enforcement Activity Remained Near Record Levels in FY2019’s First Half
Driven in significant part by the new actions filed as part of the SEC’s Share Class Selection Disclosure Initiative, the number of SEC enforcement actions against public companies and subsidiaries remained at “near-record levels” in the first half of fiscal year 2018, according to a recent report. The report, published by Cornerstone Research in collaboration with the NYU Pollack Center for Law & Business and entitled “SEC Enforcement Activity: Public Companies and Subsidiaries Midyear FY 2019 Update,” states that the enforcement activity levels in the first half of FY 2019 continued “a resurgence of activity that began in the second half of FY 2018.” The report can be found here. A May 15, 2019 press release describing the report can be found here. Continue Reading
Del. Court Addresses Summary Judgement Issues in Dole Foods Take-Private Transaction Insurance Coverage Litigation
The long-running insurance coverage litigation arising from the settlements of the shareholder claims filed in connection with the Dole Food Company’s November 2013 “going private” transaction continues to work its way through the Delaware court. In the latest development in the coverage dispute, a Delaware Superior Court judge has entered two separate interesting orders, the first granting the insurer’s motion for summary judgment on the defendants’ bad faith counterclaim, and the second denying the insurers’ summary judgment motions, among other things, on the consent to settlement and cooperation clause issues. Delaware Superior Court Judge Eric Davis’s May 1, 2018 opinion on the bad faith counterclaim can be found here. Judge Davis’s May 7, 2018 opinion on the consent to settlement and cooperation clause issues can be found here. Continue Reading
Secondary Offerings and State Court Securities Suits
As readers will recall, in March 2018, the U.S. Supreme Court held in the Cyan case that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. Commentators have correctly identified this decision as primarily of concern to IPO companies. However, one question I regularly get is whether Cyan could mean that companies conducting secondary offerings could also face state court class action securities litigation. I have usually answered this question by saying that while it is theoretically possible, for a number of reasons I thought it was relatively unlikely. Besides, I usually have added, I am not aware of any class action lawsuits in which claimants have filed ’33 Act claims relating to a secondary offering in state court. That is, I was not aware – until now. Continue Reading
Guest Post: Marijuana: Big Opportunities and Challenges for Insurers
Paul T. Curley
One of the more interesting businesses to emerge in recent years has been the legal marijuana industry. Because of lingering legal issues, this industry’s emergence has been accompanied by a host of complications. These complications in turn raise a number of challenges for insurers seeking to get involving in this industry. In the following guest post, Paul T. Curley takes a look at the opportunities and challenges for insurers in connection with the legal marijuana industry. Paul is a partner in the Insurance Coverage and Coverage Litigation Group at Kaufman Borgeest & Ryan LLP. I would like to thank Paul 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Paul’s article. Continue Reading
Guest Post: Improving Securities Class Action Outcomes Through Early Damages Analysis
Doug Greene
John McCarrick
In the following guest post, Doug Greene and John McCarrick take a look at the way that securities class action lawsuits settle and make a suggestion of a way for D&O insurers and defense counsel to try to improve settlement outcomes. Doug is the leader of BakerHostetler’s firmwide Securities and Governance Litigation Team. John is the chair of White and Williams’ firmwide Financial Lines Group. A version of this article previously appeared on Law 360. I would like to thank Doug and John for their willingness to allow me to publish their article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Doug and John’s article. Continue Reading
A Closer Look at Two Recent Securities Lawsuit Mega Settlements
Over the course of the past few weeks, very substantial settlements were announced in two separate securities class action lawsuits, one involving the giant Internet company Alibaba and one involving the auto manufacturing company Fiat Chrysler. Given the size of these settlements, they are interesting in and of themselves. However, the settlements are interesting, separately and together, for several other reasons, among other things for the fact that both involve companies organized and based outside the U.S. but with securities trading on a U.S. exchange. Each of these settlements is described below, and a discussion of the settlements’ significance follows. Continue Reading
A Closer Look at 2018 Securities Litigation Against Life Sciences Companies
I frequently received requests or questions relating to the increased risk of securities litigation that life sciences companies face. I have reviewed these issues in my own analysis of securities litigation filing trends (for example, refer here) as well as in my discussion of others’ analyses (for example, here). In another recent report, the Sidley Austin law firm has taken a detailed look at important securities litigation developments in 2018 relating to life sciences companies. This latest report includes not only a review of life sciences companies’ securities litigation class action filings trends but also takes a look at the life sciences companies’ track record in the courts, on motions to dismiss in the district courts and on appeal. The court ruling analysis suggests a number of important implications for life sciences companies’ disclosure practices. The law firm’s report, entitled “Securities Class Actions in the Life Sciences Sector: 2018 Annual Survey” can be found here. The law firm’s two-page report summary can be found here. Continue Reading
Paris Update
Le Palais du Luxembourg, viewed from le Jardin du Luxembourg
The D&O Diary’s European assignment continued this past week with a short stop in Paris before heading home. I was in Paris for some business meetings, but I also had some other important things to attend to there as well. The most important thing that required my immediate attention upon my arrival in Paris was to check in on an old, dear friend that recently suffered a serious misfortune. Continue Reading
April in London
St. James’s Park, London
The D&O Diary is on assignment in Europe this week, with a first stop in London for meetings and for an industry event. I have been to London many times before but I have to say I think I like it more every time I travel there. And it is particularly enjoyable to be there in the Spring, when the flowers are in bloom and the trees are blossoming. Continue Reading
