During the twelve months ending June 30, 2011, at least 32 Chinese companies were hit with U.S. securities suits. In addition, the U.S. Securities and Exchange Commission has initiated a number of enforcement actions and other proceedings against U.S.-listed Chinese companies, issued a formal bulletin warning investors about the risks of investing in Chinese companies that have gone public through reverse merger transactions, and launched a task force to investigate U.S.-listed Chinese companies that have sold stock to investors in the U.S.
These developments have significant D&O insurance implications for the directors and officers of these firms. In a July 14, 2011 Client Advisory from the Pillsbury Winthrop law firm, Pillsbury partner Peter M. Gillon and I review the current litigation exposure facing U.S.-listed Chinese companies and examine the questions that officials at these firms should be asking about their D&O insurance.
The Client Advisory can be found here.