As previously reported (here), 2019 was a relatively slow year for securities class action lawsuit settlements compared to 2018. However, there were a number of significant securities lawsuit recoveries and the total recoveries in the aggregate were for at least some law firms quite substantial. In a March 11, 2020 report entitled “The Top 50 of 2019,” ISS Securities Class Action Services sets out a list of the top 50 law firms — ranked by total cash amount and by number of cash settlements – with respect to final securities class action lawsuit settlements in 2019 in North America (inclusive of both the U.S. and Canada). ISS’s report can be found here.
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Guest Post: Do D&O Policies Need to be Amended to Cover Post Insolvency Claims?
In a post published last month, I wrote about an interesting U.K. case in which a claim had been asserted post-bankruptcy against a director of a private company. In the following guest post, Francis Kean, a partner in the financial lines team at McGill and Partners, takes another look at the case and considers its implications. A version of Francis’s article previously was published on LinkedIn. I would like to thank Francis for allowing me to publish his article as a guest post on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly of you would like to submit a guest post. Here is Francis’s article.
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Court Ratchets Down Fee Award, Refers Class Counsel for Possible Ethics Violation
If you have not been following the drama surrounding the question of the attorneys’ fees to be paid to class counsel in the State Street foreign currency exchange overcharge case, you will want to read the latest order from District of Massachusetts Judge Mark Wolf. Among other things, in his February 27, 2020 order, Judge Wolf cut the fees of the law firms that acted as class counsel, from $75 million to $60 million. Perhaps even more significantly, Judge Wolf concluded that lawyers at two of the lead plaintiff law firms had violated applicable provisions of the professional code of conduct and referred the attorneys to the local state bar professional practices unit. Judge Wolf’s findings also include his own reflection about the indispensable role of judge in supervising class counsel and their fees. A copy of Judge Wolf’s order can be found here.
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Material and Immaterial Conditions of Notice of Claim
Regular readers of this blog know that among my hobby horse issues are the various questions surrounding late notice of claim. Timeliness is of course a standard conditions for complying with an insurance policy’s notice requirements. Policies also contain other notice conditions, such as, for example, where the notice must be sent and so on. In an interesting recent ruling, the Fifth Circuit examined a professional liability insurance policy’s conditions of notice, finding that while the timely provision of notice is a material condition, others of the policy’s notice conditions were immaterial, and held, applying Texas law, that the insurer could be relieved of its coverage obligations for the policyholder’s failure to comply with an immaterial condition only if the failure prejudiced the insurer.
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Book Review: “Lotharingia”
A very long time ago, but also for a very long time, there was a third country between what is now France and what is now Germany. Today, this area is divided among a number of countries – Netherlands, Belgium, Luxembourg, Eastern France, Western Germany, and Switzerland. Parts of this area were known for a time as “Burgundy.” But originally this area was called “Lotharingia,” in honor of Charlemagne’s grandson, who once ruled the region. Although it not often told or even remembered, this area has a long and interesting history. This unfamiliar history is the subject of the latest book by Simon Winder, a book that is full of wonder and unexpected delight.
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Guest Post: Takeaways from the SEC’s Fight with Steven Seagal
On February 27, 2020, the SEC announced that it had settled charges against the actor Steven Seagal on charges that he had failed to disclose compensation he received for promoting an initial coin offering. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at three important takeaways from the SEC’s order against Seagal. A version of this article originally appeared on Securities Docket. I would like to thank John 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 John’s article.
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Guest Post: Post-Toshiba U.S. Securities Litigation Risk for Non-U.S. Companies
As discussed at length here, in January 2020, the U.S. District Court for the Central District of California ruled that the U.S. securities class action lawsuit brought against Toshiba by investors who had purchased the company’s unsponsored Level I American Depository Receipts (ADRs) in the U.S. can proceed. As discussed in the following guest post from the Norton Rose Fulbright law firm and AIG, this ruling has important implications for non-U.S. companies whose ADRs trade in the U.S., as well as for companies contemplating issuing ADRs in the U.S. For more background on the risk of securities class actions and public companies via ADRs please see AIG’s earlier white paper on the subject. I would like to thank Norton Rose Fulbright and AIG for allowing me to publish their 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. The memo follows below.
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Not Providing Notice of Subpoena That Wasn’t a Claim Doesn’t Bar Coverage for Later Lawsuit
As the policy definition of the term “Claim” has expanded in recent years, the range of incidents and procedures for which the policyholder must provide notice to the insurer has also grown. Among the recent expansions has been the inclusion in many policies of a “subpoena” within the meaning of the term “Claim.” As a result, a policyholder’s failure to notify its insurer of a “subpoena” could imperil coverage for a later related lawsuit. However, as a federal district court recently held, applying New York law, the notice requirement is not triggered if the prior “subpoena” does not meet the professional liability insurance policy’s definition of the term “claim,” and, the court further held that the failure to notify the insurer of the subpoena did not preclude coverage for a later suit. The court’s decision sheds interesting light on a number of frequently recurring coverage issues.
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The Risk of Coronavirus-Related D&O Claims?
Over the last few days, as updates about the spread of the coronavirus have dominated the news cycle and roiled financial markets, I have had a number of conversations about whether the emerging coronavirus outbreak could result in D&O claims. There is no doubt that if a building fire, a plane crash, or an oil spill can result in D&O claims, the impacts on any given company arising from a global pandemic might at least as a theoretical matter also result in a D&O claim. As discussed below, there are a number of ways in which circumstances surrounding the evolving coronavirus health crisis might result in D&O claims.
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No Contract Claims Asserted, Yet Contractual Liability Exclusion Precludes D&O Insurance Coverage
A deceased small business owner’s widow sued the business’s two other co-owners for breach of fiduciary duty for failing to apply a life insurance payout to the company to buy out her deceased husband’s shares. The two co-owners submitted the claim to their company’s management liability insurer, which denied coverage for the claim, relying in part on the policy’s contractual liability exclusion. The two co-owners sued the insurer seeking coverage. The district court granted summary judgment for the insurer. On February 19, 2020, the Eighth Circuit, applying Kansas law, affirmed the district court in an opinion that, as discussed below, raises some interesting issues. The Eighth Circuit’s opinion can be found here.
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