Securities Litigation

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Federal court securities class action litigation filings against life sciences companies declined slightly in 2020 relative to 2019 but remained above long-term historical levels, and remained a significant portion of overall securities class action lawsuit filings during the year, according to a new report from the Dechert law firm. The January 28, 2021 report, entitled “Dechert Survey: Developments in Securities Fraud Class Actions Against Life Sciences Companies 2020 Edition,” can be found here.
Continue Reading Securities Litigation Against Life Sciences Companies Remained Elevated in 2020

Federal court securities class action lawsuit filings declined 22% in 2020 compared to 2019, but the 2020 filings were still above the long-term historical average annual numbers of filings, according to NERA Economic Consulting’s annual securities litigation report. The 2020 securities suit filing drop-off reflected a decline in the number of federal court merger objection class action lawsuits filed during the year, offset in part by the number of coronavirus-related securities suits. NERA’s January 25, 2021 report can be found here.
Continue Reading NERA: 2020 Securities Suit Filings Down vs. 2019, But Above Long-Term Levels

The opioid crisis is not anything new; it has been around for years. Indeed, more than three years ago I posted an item noting the outbreak at the time of a rash of opioid-related securities class action lawsuits. But while the opioid crisis has been around for years, plaintiff shareholders continue to file opioid-related securities suits. On January 20, 2021, a plaintiff shareholder filed a securities class action lawsuit against Walmart in the District of Delaware based on the U.S. Department of Justice’s December 2020 lawsuit against the company alleging a role in the opioid epidemic. A copy of the securities class action lawsuit complaint can be found here.
Continue Reading Walmart Hit with Opioid-Related Securities Class Action Lawsuit

Driven largely by several mega-settlements (that is, settlements of $100 million or greater), the aggregate value of global securities class action settlements in 2020 totaled 61% more than in 2019, according to a new report. The report, entitled “2020 Securities Related Settlements Exceed $5.8 Billion,” and published in a January 18, 2021 post on the Harvard Law School Forum on Corporate Governance, was written by Jeff Lubitz of ISS Securities Class Action Services. The report can be found here.
Continue Reading Aggregate Securities Class Action Settlements Grew Substantially in 2020

Nessim Mezrahi
Stephen Sigrist

In the following guest post, Nessim Mezrahi and Stephen Sigrist discuss their analysis of Rule 10b-5 private securities fraud litigation in 2019 and 2020 against U.S. Issuers, and the impact of recent guidance by the 2nd and 7th Circuits on Halliburton II stock price impact defenses at the class certification stage.  Mezrahi is cofounder and CEO and Sigrist is a data scientist at SAR.  SAR’s January 8, 2021 press release discussing a more detailed 4Q 2020 securities class action analysis can be found here. A version of this article previously was published on Law360. I would like to thank Nessim and Stephen 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: Halliburton II Price Impact Defenses Can Limit Severity on Deficient Exchange Act Claims

In prior posts on this site, I have identified privacy-related issues as a potentially important source of future D&O claims. In making these projections, one thing I had in mind was the possibility of claims as a result of the enforcement of the EU’s General Data Protection Regulation, which went into effect in May 2018. There have in fact already been GDPR-related securities class action lawsuits filed in the U.S., including the securities suit filed in August 2018 against U.K.-incorporated media tracking company Nielsen Holdings. In a January 4, 2021 opinion, Southern District of New York Judge Jesse Freeman granted in part and denied in part the defendants’ motion to dismiss the Nielsen Holdings lawsuit. Of significance to the questions concerning privacy-related claims, the plaintiff’s allegations concerning defendants’ statements after GDPR went into effect about the GDPR’s impact on the company survived the dismissal motion. A copy of Judge Furman’s opinion can be found here.
Continue Reading GDPR-Related Securities Suit Against Nielsen Holdings in Part Survives Dismissal Motion

In my recent survey of key 2020 D&O developments I highlighted the surge of SPAC IPOs last year and conjectured about the possible increase in the number of D&O claims that might arise following the transactions in which private companies merge into the public traded SPACs ( the so-called de-SPAC transaction). A securities suit filing this week demonstrates how these claims might well arise and does suggest we could indeed be in for an influx of securities suits and other D&O claims filed following de-SPAC transactions.
Continue Reading Post-SPAC Merger Company Hit with Post-Transaction Securities Suit  

In my round-up of the Top D&O Stories of 2020, which I published earlier this week, I noted that the recent massive state-actor hack of U.S. government agencies and technology companies underscored the fact that cybersecurity represents a significant operational and management risk for organization of every type. I also noted that cybersecurity-related issues represent an ongoing D&O claims risk. As if to confirm these propositions, the first securities class action lawsuit of the New Year was filed against Solar Winds, the network infrastructure management company whose breached software is believe to have contributed to the recent massive hack. As discussed below, the newly filed complaint highlights the fact that cybersecurity represents a significant potential source of management liability risk.
Continue Reading SolarWinds Hit with Securities Suit Based on Third-Party Governmental Actor Cyber Attack

The number of federal court securities class action lawsuit filings declined in 2020 relative to the most recent prior years, largely due to short-term filing lulls during the second and fourth quarters of the year. Though the number of filings last year was below the record-setting levels seen during the years 2017 to 2019, the number of 2020 filings was still well above historical annual averages.
Continue Reading Securities Suit Filings Declined in 2020 But Remained Above Historical Levels

As I noted in a recent post, one of the most distinctive phenomena in the U.S. financial markets this year has been the tremendous amount of IPO activity involving Special Purpose Acquisition Companies (SPACs). According to SPACInsider (here), there have been 243 SPAC IPOs so far in 2020 (as of December 22, 2020), raising total gross proceeds of over $81.3 billion. As I also noted in my prior post, lawsuits relating to SPACs are starting to accumulate. In the latest example of a securities suit relating to a SPAC transaction, a plaintiff shareholder has filed a securities class action against the surviving company following a SPACs acquisition of a target company; the complaint in the lawsuit names as defendants not only the CEO of the surviving company, but also the former president of the SPAC. As discussed below, this new lawsuit may have implications for possible future SPAC-related securities litigation in 2021, and possibly even beyond.
Continue Reading SPAC-Acquired Company Hit with Post-Acquisition Securities Suit