Securities Litigation

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In my recent roundup of the top stories in the world of directors’ and officers’ liability and insurance, I noted that a host of macroeconomic factors – such as supply chain disruptions and labor supply constraints — continue to weigh on companies and, in some instances, translate into securities class action litigation. I have also noted in numerous prior posts how COVID-19 has itself resulted in securities lawsuit filings. In the latest example of a securities suit filing resulting from these various phenomena, last week a shareholder plaintiff filed a securities lawsuit against the robotic aircraft systems development and service company AeroVironment after the company delivered disappointing results due to supply chain woes resulting from COVID-19. The complaint is both representative of these types of cases and illustrative of how these kinds of concerns, even after a significant time lag, can result in a current securities lawsuit filing. A copy of the plaintiff’s August 30, 2023, complaint can be found here.Continue Reading Robotic Aircraft Company Hit with COVID-19 and Supply Chain-Related Securities Suit

As I have noted on this site, for the last several years (going back at least to 2021, and arguably even further than that), one of the significant factors contributing to securities class action lawsuit filings has been the number of SPAC-related securities suits. In the latest sign that the trend of SPAC-related securities suit filings is continuing, on August 23, 2023, a plaintiff shareholder filed a securities suit in the Southern District of Florida against medical payments collection firm MSP Recovery and certain of its executives, as well as against the directors and officers of the SPAC into which the company merged in 2022. A copy of the plaintiff’s complaint can be found here. PLEASE ALSO SEE THE UPDATE, below. Continue Reading SPAC-Related Securities Suit Filed Against Medical Payments Recovery Firm

In early August 2023, wildfires broke out on the Hawaiian island of Maui. The wildfires caused the deaths of at least 115 people, and also caused massive property damage. In the aftermath, questions began to circulate about what had caused the fires. Among those under the spotlight is Hawaii’s largest electrical utility, Hawaiian Electric Industries. Indeed, on August 24, 2023, Maui County filed a lawsuit against the utility, alleging that its power lines caused the wildfire. With the adverse publicity, the utility’s share price has slumped. Now, a plaintiff shareholder has filed a securities lawsuit against the company. As discussed below, the new securities lawsuit may represent something of a prototype for future litigation involving companies whose business operations are disrupted by changing climate conditions and by the increase in extreme weather conditions and events. A copy of the securities suit complaint can be found here.Continue Reading Electric Utility Linked to Maui Wildfires Hit with Securities Suit

Long-time readers know that a litigation phenomenon on which I have frequently commented is the filing of securities class action lawsuits in the wake of antitrust enforcement actions. These follow-on civil actions represent something of a translation of an antitrust matter into a securities lawsuit. In the latest example of this phenomenon, a plaintiff shareholder has filed a securities suit against the concert company Live Nation following news reports of an imminent U.S. Department of Justice antitrust lawsuit against the company and its ticketing service Ticketmaster relating to allegations that the concert company pressures clients to use the ticketing service. The new lawsuit raises a number of interesting issues, as discussed below. A copy of the August 4, 2023 complaint can be found here.Continue Reading Antitrust Enforcement Leads to Follow-On Securities Suit Against Live Nation

The number of federal court securities class action lawsuit filings in the first half of 2023, if annualized, suggests a year-end total number of filings that would represent a 15% increase over the number of filings in 2022, according to a new report from NERA Economic Consulting. The report, which is entitled “Recent Trends in Securities Class Action Litigation: H1 2023 Update,” also reports that while average securities suits settlement values were down in the year’s first half compared to 2022, the median suit settlement increased compared to 2022. A copy of the August 2, 2023, NERA report can be found here. NERA’s August 2, 2023 press release regarding the report can be found here. Continue Reading NERA: First Half Securities Suit Filings Point to Overall Full-Year Increase

Earlier this year, challenges arising from rising interest rates, as well as concerns surrounding liquidity and other issues, led to three of the largest banking failures in U.S. history. The three that failed were not the only banks facing challenges in the rising interest rate environment, and while there have been no further failures since May, questions from the turbulence earlier this year remain for many banks. Now, in a sign that these kinds of challenges and questions can lead to securities litigation even in the absence of bank failure, a plaintiff shareholder has filed a securities class action lawsuit against KeyCorp (the bank holding company of KeyBank) after questions about the bank’s liquidity and interest rate income in a rising interest rate environment caused a drop in the company’s share price. A copy of the August 4, 2023, complaint filed against Key can be found here.Continue Reading Liquidity and Interest Income Concerns Draw Securities Suit Against Bank

Earlier this week (here), I noted the securities class action lawsuit that a plaintiff shareholder filed against AT&T in the wake of the Wall Street Journal’s series of articles about the network of lead telephone cables in the U.S. Now, another plaintiff has initiated a separate but parallel lawsuit against Verizon. This latest lawsuit, which was filed by the same plaintiff law firm as filed the AT&T lawsuit, alleges that Verizon was aware of but failed to disclose to investors the risks and hazards the company faced owing to its ownership of the lead telephone cables. A copy of the August 1, 2023, complaint against Verizon can be found here.Continue Reading Verizon Hit with Lead Telephone Cable-Related Securities Suit

Many of you may have read the recent series of Wall Street Journal articles raising the alarm about the sprawling U.S. network of lead telephone cables. The articles suggest not only that the lead cables represent a health hazard to workers and to nearby residents, but that the telephone companies (including AT&T) allegedly have known about these hazards but have failed to take corrective measures. The revelations in the Journal series have led to governmental investigations. And now a plaintiff shareholder has filed a securities class action lawsuit against AT&T alleging that the company misled investors about the allegedly known but undisclosed risks the companies faced as a result of the lead telephone cable hazards. This new event-driven lawsuit shows that dangers that unacknowledged environmental and health hazards may represent for reporting companies. A copy of the July 27, 2023, complaint can be found here.Continue Reading Lead Telecom Cables Exposé Leads to Securities Suit Filing

I don’t know how many readers follow Lyle Roberts’s The 10b-5 Daily blog, but if you are not following it, you should. When Lyle posts a new item, it is always interesting. In his latest post, Lyle discusses a recent federal district court decision in which the court confronted the question whether a company’s description of a legal matter as “without merit” could be the basis of a misrepresentation claim under the federal securities laws. Because this is such an interesting question, and because companies routinely describe lawsuits to which they are subject as being “without merit,” I discuss the decision below.

Lyle’s July 25, 2023, post about the decision on The 10b-5 Daily blog can be found here. A copy of the District of Massachusetts court’s July 24, 2023, decision in City of Fort Lauderdale Police and Firefighters’ Retirement Systems v. Pegasystems, Inc. can be found here.Continue Reading Statement that Underlying Suit is “Without Merit” Held Actionable

The number of federal and state court securities class action lawsuits filed in the first six months of 2023 was up compared to the number of filings in the second half of 2022, but in line with the number of filings in the first half of 2022 as well as with the long-term half-year average number of filings, according to the latest report from Cornerstone Research. The report, written in conjunction with the Stanford Law School Securities Class Action Clearinghouse, is entitled “Securities Class Action Filings: 2023 Midyear Assessment,” and can be found here. Cornerstone Research’s July 20, 2023, press release about the report can be found here.Continue Reading Cornerstone Research: 1H23 Securities Suit Filings Increased Relative to 2H22