In the latest SPAC-related securities suits filing, electric aviation company Lilium N.V. has been sued by an investor after a short-seller published a report questioning the company’s technological and regulatory readiness, its development prospects, and its financial resources. Lilium became a publicly traded company in September 2021, when it merged with Qell Acquisition Corp., a special purpose acquisition company (SPAC). This lawsuit is the latest in a series of securities class action lawsuits filed since the beginning of 2021 against post-SPAC-merger companies, as discussed below. A copy of the April 18, 2022 lawsuit against Lilium can be found here.
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Musk’s Twitter Play Draws Securities Suit
The hard part about maintaining a blog is finding interesting topics. It isn’t always easy coming up with things I want to write about. But when all else fails, I can always count on Elon Musk to come up with something. At regular intervals, Musk is out there saying and doing things that are not only interesting and provocative but that are solidly blogworthy. In the last few days, Musk has been at it again, not only making himself the largest shareholder of the social media company Twitter and thereby putting himself on the front pages of the business pages, but, as discussed below, drawing a securities class action lawsuit, as well.
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Guest Post: Why Tweets May Not Validate Securities Class Action Liability
As I have noted in prior posts (most recently here), plaintiffs’ lawyers recently have attempted to rely on statements in social media posts as the basis on which to assert liability under the securities laws. In the following guest post, Nessim Mezrahi considers whether statements in posts on Twitter can support liability for securities law violations. Mezrahi is co-founder and CEO of SAR, a securities class action data analytics and software company. A version of this article previously was published on Law360. I would like to thank Nessim 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Nessim’s article.
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A Detailed Look at the 2021 Securities Litigation Against Life Sciences Companies
In the latest edition of its annual report, the Sidley Austin law firm takes a detailed look at important securities litigation developments in 2021 relating to life sciences companies. The report includes not only a review of life sciences companies’ securities litigation class action filings trends but also examines life sciences companies’ track record in the courts, both with respect to motions to dismiss in the district courts and on appeal. The law firm’s report, entitled “Securities Class Actions in the Life Sciences Sector: 2021 Annual Survey” can be found here. The same site also includes a link to a short summary of the report.
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Two More Post-SPAC-Merger Companies Hit with Securities Suits
The pace of SPAC-related securities lawsuit filings recently has perceptibly increased. Earlier this week, I noted two SPAC-related securities class action lawsuits that had been filed in the preceding days. Following my publication of that earlier post, plaintiffs’ lawyers filed two more SPAC-related securities suits, adding to the growing numbers of SPAC-related securities suits that have been filed this year. As discussed below, the likelihood is that we will continue to see further SPAC-related securities suit filings in the months ahead.
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Two More Post-SPAC-Merger Vehicle Technology Companies Get Hit With Securities Suits
Last week, the SEC introduced proposed disclosure guidelines for special purpose acquisition companies (SPACs) which, if ultimately finalized, will significantly alter the business, legal, and regulatory environment for SPACs and for their merger partners. In the meantime, plaintiffs’ lawyers continue to demonstrate their interest in pursuing claims against post-SPAC-merger operating companies. As discussed below, and in two more examples of what is already one of the most noteworthy securities litigation phenomena so far this year, last week plaintiffs’ lawyers filed two more SPAC-related securities class action lawsuits. As has been the case with many of the recent SPAC-related securities suits, both of the latest suits involve companies in the electric vehicle and smart vehicle industries.
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Dismissal Motion Largely Denied in the SolarWinds Cybersecurity-Related Securities Suit
As I have noted in prior posts on this site (most recently here), plaintiffs’ lawyers’ claims in cybersecurity-related D&O lawsuits recently have fared poorly. A number of these suits recently have failed to clear the initial pleading hurdles. However, in a ruling last week, the federal judge presiding over the SolarWinds cybersecurity-related securities suits substantially denied the defendants’ motions to dismiss in an opinion that has a number of interesting features, as discussed below. Western District of Texas Judge Robert Pitman’s March 30, 2022 opinion in the case can be found here.
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Life Sciences Companies Remained Frequent Securities Litigation Targets in 2021
The number of securities class action lawsuits filed against life sciences companies in 2021 declined overall relative to 2020 but remained steady as a proportion of the total number of securities class action lawsuits filed during the year, according to a new report from the Dechert law firm. The report, entitled “Dechert Survey: Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies: 2021 Edition,” states that there were a total of 59 securities suits filed against life sciences companies in 2021, compared to 80 in 2022. The Dechert law firm’s March 28, 2022 press release about the report, which links to the full report, can be found here.
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Can Economic Inflation Really Lead to D&O Claims? Yup. Here’s How.
In my recent year-end wrap up of D&O issues, I speculated that certain current conditions – supply chain woes, labor supply constraints, and economic inflation – could lead to a rash of D&O claims. I actually had examples in my wrap-up article of D&O claims arising from supply chain issues and labor supply concerns, but I didn’t have any inflation-related D&O claims examples – until now. The securities class action lawsuit filed last week against Vertiv Holdings is directly related to the company’s recent inflation-caused earnings miss and ensuing stock price drop. As discussed below, there could be more inflation-related D&O claims to come. A copy of the March 24, 2022 complaint against Vertiv can be found here.
Continue Reading Can Economic Inflation Really Lead to D&O Claims? Yup. Here’s How.
More Securities Lawsuits Filed Against Post-SPAC-Merger Companies
As I have noted in prior posts, one of the most significant securities litigation phenomenon over recent months has been the rise of lawsuits involving special purpose acquisition corporations (SPACs). Last week, two more of these SPAC-related suits were filed. Although the new lawsuits have features in common with many of the prior SPAC-related suits, they also have several interesting distinctive attributes as well, as discussed below.
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