Securities Litigation

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In my recent year-end wrap up of directors’ and officers’ liability and insurance issues that arose during 2021, I conjectured that several current economic circumstances – including in particular supply chain disruptions – could lead to D&O claims in 2022. The way that D&O claims might arise out of these economic conditions is illustrated in a new securities class action lawsuit filed against the software company Cerence, which experienced a reduction in automobile industry demand for its products and services due to the global semiconductor shortage. A copy of the complaint filed against Cerence on February 25, 2022 can be found here.
Continue Reading Global Semiconductor Shortage Leads to Securities Lawsuit

Just as the overall number of securities class action lawsuit filings declined in 2021 relative to the year prior (as discussed in detail here), the number of securities suits filed against non-U.S. companies declined in 2021 as well, although the number of suits against foreign companies as a percentage of all 2021 securities suit filings decreased only slightly, as reflected in a new report from the Dechert law firm. The February 24, 2022 report, entitled “2001 Developments in U.S. Securities Fraud Class Actions Against Non-Issuers,” can be found here.
Continue Reading Securities Suit Filings Against Non-U.S. Companies Declined in 2021

In the latest post-SPAC-merger securities class action lawsuit, a plaintiff shareholder has filed a securities suit against a rare earth mining and processing company that completed a SPAC merger in November 2020. Like many SPAC-related securities suits that have been filed in recent months, the lawsuit follows a drop in the company’s share prices following a negative short-seller report. A copy of the February 22, 2022 lawsuit against MP Materials Corp. can be found here.
Continue Reading Mining Company Hit with Post-SPAC-Merger Securities Suit After Short Seller Report

In a lawsuit that captures two of the top current securities class action lawsuit trends, a plaintiff shareholder has filed a securities class action lawsuit against health technology company Butterfly Network. The new lawsuit is both SPAC-related and COVID-related. Butterfly merged with Longview Acquisition Corp., a special purpose acquisition company (SPAC), in February 2021. The allegations included, among other things, a contention that the defendant company failed to take into account pandemic’s “broad consequences” in its operations and reporting. A copy of the plaintiff’s February 16, 2022 complaint can be found here.
Continue Reading Post-SPAC-Merger Company Hit with COVID-Related Securities Suit

As I have noted elsewhere on this site (for example here), the number of federal court merger objection class action lawsuits declined significantly during 2021. But as I and others have also noted, the decline in class actions had not necessarily meant less merger objection litigation overall. The merger objection suits are still being filed; they are just being filed as individual actions rather than as class actions. In the following article, Gregory Markel, Vincent Sama, Daphne Morduchowitz, Andrew Escobar, and Matthew Catalano of the Seyfarth Shaw law firm take a closer look at these changing merger objection lawsuit patterns and discuss the implications. I would like to thank the authors 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 the authors’ article.
Continue Reading Guest Post: Plaintiffs’ Abusive Tax on M&A Deals Changed Form But Continued in 2021

As I have noted in prior posts on this site, the surge in special purpose acquisition corporation (SPAC) IPO transactions over the last two years has also meant a wave of SPAC-related lawsuits. In the following guest post, Peter Evans, Complex Claims Director – Executive & Professional Lines, Berkshire Hathaway Specialty Insurance, Elan Kandel, Member, Bailey Cavalieri LLC and James Talbert, Associate, Bailey Cavalieri LLC, take a look at SPACs and the litigation risks that SPAC sponsors can face, as well as the insurance issues that can arise in claims involving SPAC sponsors. I would like to thank the authors 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 the authors’ article.
Continue Reading Guest Post: Litigation Risks and Insurance Issues for SPAC Sponsors

Daniel J. Tyukody
Robert A. Horowitz

Ever since the U.S. Supreme Court’s March 2010 decision in Morrison v. National Australia Bank courts have struggled with application of the Morrison Court’s standard to securities lawsuits involving transactions in American Depository Receipts. As I noted in a prior blog post, one of the latest court rulings involving the application of Morrison to ADR transactions was the denial of the motion for class certification in the Toshiba case. In the following guest post, Daniel J. Tyukody and Robert A. Horowitz take a closer look that the class certification motion denial in Toshiba and consider the implications of the ruling.  Tyukody and Horowitz are Co-Chairs of Greenberg Traurig, LLP’s Securities Litigation Practice. I would like to thank the authors 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. Here is the authors’ article.
Continue Reading Guest Post: The Elusive Search For Determining The Reach Of Section 10(b) Liability Following Morrison

In the latest SPAC-related securities class action lawsuit to be filed, a plaintiff shareholder has filed a post-merger lawsuit against a commercial space launch company that merged with a SPAC in June 2021. As is the case with many of the SPAC-related securities lawsuits, the defendant company was sued after its share price declined following the publication of a short-seller report. A copy of the complaint filed against Astra Space, Inc. on February 9, 2022 can be found here.
Continue Reading Post-Merger Commercial Space Launch Company Hit with SPAC-Related Securities Suit

Readers of this blog know that two important current litigation trends involve the filing of claims relating to cybersecurity incidents and the filing of COVID-19-related claims.  A new securities class action lawsuit filed this week touched on both of these securities suit filing trends. Secure technology company Telos Corporation was hit with a securities suit following a decline in the price of its shares after the company experienced revenue delays owing to cybersecurity and coronavirus related “headwinds” that postponed the company’s performance of two key contracts. A copy of the plaintiffs’ complaint filed on February 7, 2022 against Telos can be found here.
Continue Reading New Lawsuit Reflects Cybersecurity and Coronavirus-Related Litigation Trends

Last summer, I noted on this blog the filing of what turned out to be a total of four separate securities class action lawsuits that were filed against Chinese internet-business firms following a crackdown on their activities by the Chinese cybersecurity regulator. I noted at the time that though these four cases involved circumstances arguably unique to China the cases nevertheless represented examples of the ways in which regulatory risk could translate into securities class action litigation risk.

Last week, two more securities suits were filed against Chinese companies – both involved in the business of providing private educational and tutoring services, a sector that during the past year has been the target of a governmental crackdown – underscoring the extent to which regulatory exposures can lead to securities litigation risk. As discussed below, these latest cases, along with the four prior cases filed last summer, also arguably demonstrate the ways in which securities litigation risk can arise out of political risk.
Continue Reading Political Risk as Securities Litigation Risk