The parties in the Kraft Heinz Securities Group securities class action litigation have agreed to settle the case for $450 million, a massive settlement that makes the list of all-time largest settlements. The settlement is subject to court approval. A copy of the parties’ stipulation and agreement of settlement, which was filed with the court on May 5, 2023, can be found here.Continue Reading Kraft Heinz Securities Litigation Settles for $450 Million
In the immediate aftermath of the banking crisis in mid-March, several of the key banks at the center of the crisis – including Silicon Valley Bank, Signature Bank, and Credit Suisse – were quickly hit with securities class action lawsuits. First Republic, another bank that suffered massive deposit withdrawals in March and that received a $30 billion infusion from J.P. Morgan and other large banks, has now been hit with a securities class action lawsuit after it announced its fiscal first quarter financial results on Monday. This latest lawsuit, only coming in as it does now, may fuel further uneasiness that the March banking crisis-related events, might not represent the end of the banking crisis story, nor the end of the related lawsuits.Continue Reading First Republic Bank Hit with Banking Crisis-Related Securities Suit
As readers of this blog know, in the last couple of years a significant number of SPAC-related securities lawsuits have been filed, often arising after the post-merger de-SPAC company stumbles following the SPAC merger. In many of these cases, the securities suit plaintiffs often allege that the pre-merger private company made misleading statements about its business or operations, the truth about which only became apparent after the merger with the SPAC was completed.
In an interesting decision in a securities suit involving the used car consignment company CarLotz, which merged with a SPAC in January 2021, the court held that the named plaintiffs, one who purchased shares of the pre-merger SPAC and another bought shares in the post-merger de-SPAC, did not have standing under the securities laws to sue for alleged misrepresentations made by the pre-merger private company. Because this issue often comes up in SPAC-related securities suits, the court’s ruling potentially could have important implications in other SPAC lawsuits. A copy of the Southern District of New York’s March 31, 2023, order can be found here.Continue Reading Plaintiffs Lack Standing to Sue Over Pre-Merger Statements of SPAC Target Company
Earlier this week, the U.S. Supreme Court heard oral argument in the Slack case, the high-profile securities law case the Court is considering this term. In the following guest post, Joseph Gross of the Wiley firm provides a detailed overview of the legal issues in the case and summarizes the parties’ oral arguments. I would like to thank Joe 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Joe’s article.Continue Reading Guest Post: Will the Supreme Court Cut Securities Plaintiffs Some Slack?
As I noted in my year-end round up of D&O related issues (here), plaintiffs’ lawyers have continued to file securities class action lawsuits following cybersecurity incidents, even though the plaintiffs’ track record in these kinds of lawsuits generally has been poor. Among the cybersecurity-related securities lawsuits filed last year was the suit against cloud-based software company Okta relating in part to the cybersecurity incident at the company earlier in the year. Consistent with the general trend, on March 31, 2023, the court presiding over the Okta securities lawsuit granted the defendants’ motion to dismiss the cybersecurity-related allegations, although the court denied the dismissal motion with respect to certain of the plaintiffs’ other unrelated allegations. The court granted the plaintiff leave to amend the dismissed allegations. The court’s March 31, 2023, order can be found here.Continue Reading Cybersecurity-Related Securities Suit Allegations Against Okta Dismissed
In the current economic environment, companies are wrestling with a host of macroeconomic issues, including rising interest rates, economic inflation, continuing labor shortages, and the war in Ukraine. In addition, another issue companies are facing in the wake of the pandemic is supply chain disruption, which continues to challenge some companies. In the latest sign
The number of securities class action lawsuit filings involving accounting allegations increased slightly in 2022 compared to 2021, but the number of 2022 accounting-related securities suit filings remained below the long-term annual average of such filings, according to the latest annual report from Cornerstone Research. At the same time, the total number, aggregate total value, and median and average values of accounting-related securities suit settlements increased in 2022 compared to the 2021. The Cornerstone Research report, which is entitled “Accounting Class Action Filings and Settlements: 2022 Review and Analysis,” can be found here. Cornerstone Research’s April 12, 2023, press release about the report can be found here.Continue Reading Cornerstone Research: Accounting Related Case Filings and Settlements Increased in 2022
Among jurisdictions outside the U.S. with active securities litigation regimes, one of the most noteworthy and important is Canada. Shareholder litigation in Canadian courts and under Canadian law has been an important feature of the global investor litigation picture for several years. According to the latest annual report from NERA Economic Consulting, the number of Canadian securities class action lawsuits declined in 2022 for the second year in a row, and the number of 2022 filings was also slightly below the long-term annual average number of filings. In addition, as detailed below, the median settlement amount for settlements of Canadian securities class action lawsuits has decline in the most recent years compared to prior years. The report, which is entitled “Trends in Canadian Securities Class Actions: 2022 Update,” can be found here.Continue Reading NERA: Canadian Securities Class Action Lawsuit Filings, Settlements Declined in 2022
Long-time readers know that I have frequently commented on this site on the phenomenon of “event-driven” litigation (for example, here). These are securities lawsuits filed in the wake of a significant operational event or development that disrupts a company and tanks its share price, as opposed to securities suits that are premised on accounting or financial misrepresentations. I am far from the only observer that has commented on this phenomenon. Among others, the Bloomberg columnist Matt Levine, in an article provocatively entitled, “Everything Everywhere is Securities Fraud” (here) also weighed in on the event-driven litigation trend.
There are, of course, usually two sides to every story, and in a April 5, 2023 Law360 article entitled “Why Event-Driven Securities Class Actions Often Succeed” (here, subscription required), Daniel Barenbaum and Michael Dark of the Berman Tabacco firm provide a plaintiffs’ side view of event-driven securities litigation, and make out their case that these cases are not only not frivolous but provide securities investors important remedies and protections.Continue Reading Are Event-Driven Cases More Often “Frivolous” or “Successful”?
In the following guest post, Greg Markel and Sarah Fedner take a look at the characteristics of securities class action lawsuits that made securities suit mediations different from mediations in other types of litigated matters, as well as the practical implications of those differences. Markel is Securities Litigation co-Chair and Partner at Seyfarth Shaw LLP and Fedner is a Senior Managing Associate at Seyfarth Shaw LLP. A version of this article previously was published in the New York Law Journal. I would like to thank Greg and Sarah 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. Here is Greg and Sarah’s article.Continue Reading Guest Post: Why are Securities Class Action Mediations Different from Other Mediations?