Securities Litigation

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In the following guest post, attorneys from the Paul Weiss law firm take a look at the Second Circuit’s January 12, 2018 decision in Arkansas Teacher Retirement System v. Goldman Sachs Group, Inc. (here), in which the appellate court vacated the district court’s certification of a shareholder class in the securities class action lawsuit arising out of the investment company’s involvement in the creation and marketing of the infamous “built-to-fail” Abacus CDO. A version of this article previously appeared as a Paul Weiss law firm client memo. I would like to thank the authors for their willingness 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ guest post.
Continue Reading Guest Post: Second Circuit Holds Defendants’ Fraud-on-the-Market Presumption Rebuttal Need Not Be Conclusive

In his recent one-volume history of American capitalism, “Americana,” author Bhu Srivnivasan recounts the rise of many of the country’s large corporations in the late 19th century, including the long-standing U.S. industry stalwart, General Electric. GE was formed when Wall Street bankers engineered the merger of two fledgling electrical services providers, including the company formed by Thomas Edison, Edison Electric. The company has since grown to become a massive conglomerate and something of a mainstay of the U.S. commercial economy, in many ways a bellwether for the country’s economic health and a representative example of the country’s industrial might. More recently the company has gone through some high-profile struggles, drawing questions for the company’s management – and as discussed below, attracting securities class action litigation as well.
Continue Reading Reflections on GE’s Massive Run-Off Insurance-Related Charge

As discussed in a guest post on this site last week (here), on December 14, 2018 the Delaware Supreme Court published its opinion in Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd. (here). In the following guest post, Mark Lebovitch, Christopher J. Orrico and Alla Zayenchik of the Bernstein Litowitz Berger & Grossman LLP law firm provide their contrasting perspective on Dell and other recent Delaware decisions and of these decisions’ implications for investors and acquirers. I would like to thank the authors for their willingness to allow me to publish their article. 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’ guest post.
Continue Reading Guest Post: From Corwin to Dell: Implications for Investors and Corporate Acquirers

In one of the largest U.S. securities class action lawsuit settlements ever, the Brazilian-based energy company Petrobras has agreed to settle the bribery and corruption-related securities class action lawsuit pending against the company in the Southern District of New York for $2.95 billion. The settlement, which is subject to court approval, resolves only the claims of Petrobras investors who purchased the company’s securities in the U.S.; it does not resolve the claims of investors who purchased Petrobras securities in Brazil.  The settlement resolves the case just before the U.S. Supreme Court was to consider whether to take up a cert petition in which the defendants sought to have the high court address class certification issues in the case. The company’s January 3, 2017 press release describing the settlement can be found here. The plaintiffs’ lawyers’ January 3, 2017 press release about the settlement can be found here.
Continue Reading Petrobras Settles U.S. Securities Suit Based on Corruption-Related Allegations for $2.95 Billion

More securities class action lawsuits were filed in 2017 than in any year since 2001, in significant part because of the substantial number of federal court merger objection lawsuit filings during the year. But even disregarding the merger suits and looking only at the traditional securities lawsuits, the number of lawsuit filings was at the highest level since at least 2004.  While the elevated numbers of lawsuit filings is noteworthy, it is the litigation rate – that is, the number of securities suits relative to the number of public companies – that is most significant. According to my estimate, the litigation rate during 2017 was at all-time record levels.
Continue Reading Securities Suit Filings at Historically High Levels During 2017

Even after the precipitous drop this past Friday in the price of Bitcoin and other digital currencies, the developments during the past several months involving cryptocurrencies have to be one of the year’s top business stories. While news articles about digital currencies focus on the dramatic rise this year in the price of Bitcoin or on the recent wave of initial coin offerings (ICOs), part of this year’s cryptocurrency story has to include the SEC’s increasingly active approach to policing digital currency trading, as well as the rising numbers of lawsuits filed against cryptocurrency sponsors. As I have noted in prior posts, in recent weeks claimants have filed a number of cryptocurrency-related securities lawsuits. Late last week, investors filed two more of these lawsuits, one involving an ICO company and the other involving a publicly traded blockchain consulting company.
Continue Reading Cryptocurrency-Related Securities Lawsuits: A Litigation Filing Trend for the New Year?

In the latest of what is beginning to look like a wave of ICO-related securities lawsuit filings, would-be investors who made pre-offering investments in Monkey Capital’s promised but uncompleted ICO have filed a securities class action lawsuit in the Southern District of Florida against the company and its principals, alleging that the company’s pre-offering sale of options to purchase coins or tokens in the offering represented the sale unregistered securities in violation of the federal securities laws. A copy of the plaintiffs’ December 19, 2017 complaint can be found here.
Continue Reading Uncompleted ICO Draws Securities Class Action Lawsuit

According to news reports, the amount raised through Initial Coin Offerings (ICOs) in 2017 now exceeds $4 billion. This surge of activity has drawn the attention of regulators. The SEC is clearly stepping up its ICO-related enforcement activity. ICOs are also drawing the attention of securities class action plaintiffs’ attorneys. As I noted in a prior post, plaintiffs’ attorneys have filed several securities class action lawsuits in connection with the Tezos ICO early this year. Now plaintiff attorneys have filed yet another ICO-related securities class action lawsuit, in this case involving the high-profile and controversial Centra Tech ICO.
Continue Reading Another ICO Draws a Securities Class Action Lawsuit

While commentators (like me) were predicting a blitz of data breach-related D&O litigation, the anticipated onslaught failed to materialize. The few cases that were filed –in the form of shareholder derivative suits — were unsuccessful. More recently, however, plaintiffs’ lawyers have been taking a different approach to data breach-related D&O lawsuits, filing their cases in the form of securities class action lawsuits. These more recent suits involve cases against Equifax (about which refer here) and PayPal (here). Now plaintiffs’ lawyers have filed yet another data breach-related securities suit, this one against Qudian, a Chinese company that just completed its IPO in October 2017.   
Continue Reading Yet Another Data Breach-Related Securities Suit Filed

I have had this perception for several years now that the U.S. Supreme Court recently has been particularly keen to take up securities cases. It turns out that this perception has a basis in objective fact. A recent paper by University of Toledo law school Professor Eric Chafee confirms that since John Roberts became Chief Justice in 2005, the Court has averaged two securities opinions per court term, twice the number of the prior Rehnquist Court. Indeed, as the number of cases overall on which the Court has granted cert has continued to shrink, the securities cases have become an increasingly significant component of the Court’s docket. The current term is no exception; the Court began the term with three securities cases on its docket (although a recent settlement in one of the cases reduced the number to two).

The Court is showing its securities law proclivities once again. On Friday, December 8, 2017, the Court granted cert in yet another securities law case. The Court’s December 8, 2017 Order granting the petition for a writ of certiorari in China Agritech Inc. v. Resh can be found here. As Professor Chafee notes in his recent paper, many of the securities cases the Roberts court has taken up in recent years have involved issues “at the periphery of securities laws.” The new case the Court has taken up arguably is no exception to this generalization. The China Agritech case is in fact the second case the Court has taken up in successive terms involving statute of limitations tolling issues under the Court’s American Pipe tolling doctrine.
Continue Reading U.S. Supreme Court Grants Cert in Yet Another Case Securities Law Case