Securities Litigation

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As part of my day job, I attend a lot of insurance conferences, including some in foreign venues. A frequent feature of these conferences is expert conjecture about areas of emerging liability risk. In recent years, one frequently discussed area of concern has been emerging liability issues arising from the use of GLP-1 drugs. Many readers will be familiar with the branded GLP-1 products such as Ozempic, for treatment of type 2 diabetes, and Wegovy, for weight loss treatment. There already are, in fact, growing numbers of product liability claims concerning GLP-1 drugs, as discussed below.  

I have long wondered whether D&O claims relating to GLP-1 drugs might also emerge. In an interesting development last week, plaintiff shareholders filed two separate GLP-1-related securities class action lawsuits against telehealth platform Hims & Hers Health, when the company’s share price plunged after Novo Nordisk, the manufacturer of Wegovy, pulled its agreement allowing Hims to distribute the drug on its platform. Although the allegations in the new lawsuits against Hims are arguably specific to Hims, the lawsuits nevertheless are securities suits relating to GLP-1 drugs. As discussed further below, I continue to believe that issues relating to GLP-1 drugs are a potential area of emerging D&O risk.  Continue Reading Thinking About GLP-1 Drugs and D&O Risk

In the latest AI-washing related securities class action lawsuit to be filed, a plaintiff shareholder has filed a securities suit against AI-based health care company Tempus AI, alleging, among other things, that the company overstated its AI capabilities. The lawsuit comes after the company’s share price declined following the publication of a short seller report critical of the company and its management. A copy of the June 12, 2025, complaint against Tempus AI can be found here.Continue Reading AI-Washing Securities Suit Filed Against Tempus AI

Sarah Abrams

Last fall the U.S. Supreme Court dismissed, as improvidently granted, the writ of certiorari in two pending securities lawsuits, including in the Meta Platforms/Facebook case (as discussed here). The Court’s dismissal of the writ of certiorari in the Facebook case had obvious implications for the immediate litigants in the case, as it left the prior circuit court ruling standing. But the dismissal also has important implications for litigants in other cases involving the same issues as were raised in the Facebook case.

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, considers the implication for those other litigants in those other cases in light of the Supreme Court’s dismissal of the writ of certiorari in the Facebook case. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors in topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: Location, Location, Location

As part of our beat here at The D&O Diary, we read all of the new securities class action lawsuit complaints as they come in. As a result, we have become quite accustomed to the reality that, as Bloomberg columnist Matt Levine famously put it, “everything, everywhere is securities fraud.” But our experience did not quite prepare us for the new complaint filed earlier this week against UnitedHealth Group that works the CEO’s murder into the complaint’s allegations. A copy of the May 7, 2025, complaint filed against UnitedHealth can be found here.Continue Reading Event-Driven Litigation, Sure, But Even Where the Event is the CEO’s Murder?

As I noted in a recent post (here), even though we are now more than five years past the initial COVID-19 outbreak in the U.S., companies continue to be hit with securities class action lawsuits alleging that the lingering effects of the pandemic’s disruption continue to affect their operations and financial results. The latest COVID-related securities lawsuit example provides an interesting variant on the typical allegations. The complaint in a new securities suit against pharma supply company West Pharmaceutical Services alleges not that the company failed to disclose the full impact of the pandemic on its operations and financial results, but rather that the company’s reports about the pandemic’s pervasive disruption masked other undisclosed customer losses.  A copy of the complaint against West can be found here.  Continue Reading Pharma Supply Company Hit with COVID-Related Securities Suit

Even before the start of the new Trump administration, corporate DEI initiatives faced increasing scrutiny. With the new administration, DEI initiatives face even greater scrutiny. Following Trump’s January inauguration, the President and the Attorney General declared that the new administration intends to target what they have called “illegal DEI.” The administration’s approach creates regulatory and enforcement risks for companies and their executives with respect to DEI issues. And as detailed in a recent law firm memo, these developments could also give rise to increased corporate and securities litigation risks as well, as discussed below. The Winston and Strawn law firm’s April 28, 2025, memo entitled “Securities Litigation Risk in the Evolving DEI Landscape” can be found here.Continue Reading Corporate and Securities Litigation Risk in the New DEI Environment

The number of securities class action lawsuit filings involving accounting allegations increased slightly in 2024 compared to 2023, but the 2024 accounting-related filings remained below the long-term annual average number of such filings, according to the latest annual report from Cornerstone Research. The number of accounting-related settlements in 2024 remained steady compared to 2023, while the median, average, and total settlement values all decreased compared both to 2023 and long-term values.Continue Reading Accounting-Related Securities Suit Filings Increased, Settlement Values Decreased

In its June 2023 decision in the Slack case, the United States Supreme Court held that, order to establish standing, Section 11 plaintiffs must plead and prove that the shares they purchased in a direct listing offering are traceable to the allegedly misleading registration statement. However, as I noted at the time, while the Court was clear that Section 11 plaintiffs must establish traceability, the Court had little to say about what is required to establish the tracing.

In a recent ruling in a securities lawsuit against Palantir Technologies, which went public in a direct listing, the Court granted the defendants’ motion to dismiss the plaintiffs’ Section 11 claim, after finding that the alternatives the plaintiffs proposed to try to establish tracing were insufficient. The practical implication of the Court’s decision is that the strict tracing requirements may, as an April 16, 2025, memo from the Paul Weiss law firm put it, “effectively insulate companies that go public through a direct listing from Section 11 liability.”Continue Reading High Bar to Establish Section 11 Standing for Direct Listing Purchasers

As I have noted in prior posts (most recently here), courts have over time evinced a continuing skepticism of securities class action lawsuit allegations based on short-seller reports. The short sellers’ financial incentives and their reliance on anonymous sources have caused courts to be wary of securities suit allegations based on their reports. In a recent Fourth Circuit decision in a case in which the plaintiffs’ allegations were largely relied on a short-seller’s report, the appellate court affirmed the district court’s dismissal of the case, based on the plaintiffs’ failure to adequately allege loss causation. The court’s opinion provides several interesting observations about securities suit allegations based on short sellers’ reports.Continue Reading 4th Circ.: Short Seller Report’s Allegations Insufficient to Establish Loss Causation

Long-time observers of securities class action litigation filing patterns know well that life sciences companies are frequent targets of securities suit, reflecting a litigation frequency pattern that has been well-established for years. While in more recent years the overall number of securities suits filed against life sciences has shown a marginal decline, in 2024, the number of securities suits filed against life sciences companies increased to the highest level in several years, according to the latest annual report from the Sidley law firm. A copy of the law firm’s recent memo, entitled “Securities Class Actions in the Life Sciences Sector: 2024 Annual Survey” can be found here. A two-page summary of the report can be found here.Continue Reading A Detailed Look at the 2024 Securities Litigation Against Life Sciences Companies