One of the Dodd-Frank Act’s signature features was its creation of potentially massive bounties for whistleblowers that reported financial fraud to the SEC. During the time that the Dodd-Frank whistleblower program has been in place, the agency has made a number of significant bounty awards. Mary Jo White, the SEC chairwoman, has said that the program “has rapidly become a tremendously effective force-multiplier, generating high quality tips and, in some cases, virtual blueprints laying out an entire enterprise, directing us to the heart of an alleged fraud.” The SEC’s whistleblower program has also attracted the attention of other countries’ securities regulators, with the various countries reaching a variety of conclusions about the program, particularly its bounty award feature. In the past several days, securities regulators in Ontario and in Germany have each adopted their own whistleblower programs. The different approach the regulators have taken is interesting, as discussed below.
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Global Litigation Trend Lines Converge in Massive U.K. Collective Action Competition Claim Against MasterCard
There have been few more powerful forces acting recently on the litigation environment around the world than third-party litigation financing. The recent rise of litigation funding, often accompanied by the active involvement of U.S. law firms, is changing the face of litigation in numerous countries. The collective action to be filed against MasterCard later this summer in the U.K. by U.S. law firm Quinn Emanuel, in an initiative being financed by Chicago-based litigation funding firm Gerchen Keller Capital LLC, is the latest and highest profile example of this trends. Indeed, the anticipated MasterCard action in some ways reflects the coming together of many of the important global litigation trends, as discussed below. The Quinn Emanuel law firm’s July 2016 press release about the planned lawsuit can be found here. Julie Triedman’s July 6, 2016 American Lawyer article entitled “Quinn Emanuel, Litigation Funder Team Up for Landmark $25B MasterCard Fight” can be found here.
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Guest Post: India – Is D&O Liability Insurance Mandatory?
In the following guest post, Umesh Pratapa takes a look at status in India of D&O insurance in light of The Companies Act of 2013. The guest post also reviews the prudential considerations supporting the purchase of D&O insurance for Indian companies. I would like to thank Umesh for his willingness to publish his article on my 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 Umesh’s guest post.
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Is Australia About to Become the Global Forum of Choice for Securities Class Action Litigation?
As I have noted in prior posts, in recent years, there has been a significant growth in shareholder class action litigation in Australia. There are a number of reasons for this development; among other things, Australia’s class action regime is, by comparison to the procedures available in many other jurisdictions, plaintiff-friendly. For these and other reasons, according to a recent law firm memo, Australia may be poised to become “the forum of choice for plaintiffs seeking redress in the world of securities class actions.” The June 27, 2016 memo, which is written by the Quinn Emanuel law firm and is entitled “Australia: An Increasingly Attractive Plaintiffs’ Forum for Securities Class Actions,” and raises a number of interesting questions, as discussed below, and can be found here.
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Securities Litigation in Japan
As I have previously noted, the prevalence of misrepresentation-related securities litigation in Japan increased significantly after the 2004 revisions to the Japanese securities laws. The increase largely has been due to the legislative changes and to a number of high-profile accounting and financial scandals. There are features of the Japanese law that, according to a recent review, make Japan “an attractive forum for securities litigation.” However, claimants still face a number of hurdles, as a result of which, according to a recent academic study, securities litigation in Japan “is still not a widespread phenomenon.” The June 15, 2016 Law 360 article entitled “A Look at Shareholder Remedies in Japan,” can be found here. University of Tokyo Professor Gen Goto’s January 2016 article “Growing Securities Litigation Against Issuers in Japan: Its Background and Reality” can be found here.
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Public Enforcement of Directors’ Duties in Australia
Australia has long been in the vanguard when it comes to enforcement of duties of corporate directors. Australia was the first English-speaking jurisdiction to introduce statutory directors’ duties in 1896, and the first English-speaking jurisdiction to introduce criminal sanctions to enforce statutory directors’ duties in 1958. However, following the recent global financial crisis, questions were
Guest Post: Independent Directors in India: Risk Exposures, Safeguards, and Insurance Protection
In the following guest post, Umesh Pratapa takes a look at the law in India governing the duties and responsibilities of independent directors, and discusses the ways that independent directors can manage their exposures and safeguard themselves from liability, and protect themselves with D&O insurance. Umesh is an independent insurance consultant in India. I would like to thank Umesh for his willingness to publish his article on my 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 Umesh’s guest post.
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Guest Post: Developments Under Indian Anti-Corruption and Securities Laws
I am always pleased to be able to publish updates on important developments in other jurisdictions. In following guest post, I reproduce two articles about important developments in India. The first article discusses the widening scope of India’s Prevention of Corruption Act. The second article discusses a recent decision of the Supreme Court of India with respect to the imposition of penalties under the Indian securities laws. The two articles were submitted by Rohan Negandhi, who is a Financial Lines Underwriter with Tata AIG General Insurance Company Limited, which is an Indian General insurance Company, and a joint venture between the Tata Group and American International Group (AIG). I would like to thank Rohan for submitting his articles. 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 are Rohan’s articles.
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Massive $1.3 Billion Settlement of Fortis Investor Actions Under Dutch Collective Settlement Procedures
In what is by far the largest investor settlement ever under the Dutch collective settlement procedures, several shareholder foundations have reached an agreement to settle the Fortis shareholder claims for a total of €1.204 billion ($1.3 billion). The shareholder foundations’ settlement with Ageas, as Fortis is now known, relates to Fortis’s ill-fated October 2007 participation in the ABN AMRO acquisition just before the global financial crisis. Under a parallel settlement, €290 million ($313 million) of the shareholder settlement will be funded by Fortis’s D&O insurers. The shareholder settlement is subject to the approval of the Amsterdam Court of Appeals. This massive settlement undoubtedly will boost current initiatives by the shareholders of other companies – such as VW, Tesco, and Petrobras – to use the Dutch collective settlement procedures to secure collective investor relief.
A copy of Ageas’s March 14, 2016 press release about the shareholder settlement can be found here. Ageas’s March 14, 2016 press release about the insurance settlement can be found here. The website that Ageas has established for shareholders regarding the settlement can be found here.
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Dutch Shareholder Foundation Seeks to Represent Global Class of VW Investors
Several years ago, when investors’ representatives used class claims settlement procedures available under Netherlands law to reach securities claim settlements involving Royal Dutch Shell (about which refer here) and Converium (about which refer here), there was a great deal of speculation whether the Dutch procedures could become an important vehicle for aggrieved investors to recover damages for alleged securities law violations.
This speculation was particularly magnified after the Amsterdam Court of Appeal, in connection with the Converium settlement, held that the Dutch settlement procedures could be used to resolve securities claims of non-Dutch investors against a non-Dutch company, in the form of judgment that is enforceable throughout the EU and among other European countries. Though many of these kinds of investor settlements were anticipated, the onslaught of securities settlements using the Dutch procedures never really did materialize.
However, a new initiative being organized in The Netherlands on behalf of Volkswagen securities holders whose investment interests were harmed as a result of the automobile company’s emissions-related scandal may represent the most significant effort since the Converium case to try to use the Netherlands procedures on behalf of an aggrieved class of investors. This initiative on behalf of Volkswagen’s securityholders has a number of interesting features. It also raises a number of potentially complicated questions about jurisdiction, priority, potential preemption, and international comity.
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