Securities Litigation

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gavel2Thirteen of the 100 all-time largest securities class action lawsuit settlements were finalized in 2016, the highest number of settlements during any one year period, according to a recent report from Institutional Shareholder Services (ISS). Two of the 2016 settlements among the top 100 were among the eleven largest of all times. The report, which also ranks the plaintiffs’ law firms by the number of top 100 settlements in which they were involve, entitled “The Top 100 U.S. Settlements of All Time,” can be found here.
Continue Reading Record Number of Settlements Added to Top 100 Securities Suits Settlement List in 2016

skarzynski 1In the following guest post, Tammy Yuen and Ted Carleton of the Skarzynski Black law firm review and analyze the May 9, 2017 Cornerstone Research report entitled “SEC Enforcement Activity: Public Companies and Subsidiaries, Midyear FY 2017 Update” (here), which details the SEC’s enforcement activity during the first half of the current fiscal year. I would like to thank Tammy and Ted for their willingness to allow me to publish their article 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 Tammy and Ted’s guest post.
Continue Reading Guest Post: SEC Enforcement Data: Midyear Review

gavelOver the last several days, Doug Greene of the Lane Powell law firm has been running a series of articles on his D&O Discourse blog asking the question “Who is Winning the Class Action War?” In the aggregate, the multi-part series provides an interesting commentary on the current state of securities class action litigation in the United States. The articles in the series are thought-provoking and provocative — apparently deliberately so — and I commend them to readers for the perspective they provide on the current state of play in securities litigation, from the outlook of an experienced defense-side securities class action litigator.

Based on my own varied experiences, I have my own perspective on some of the topics Greene discusses in his articles, which I have set out below. I want to emphasize at the outset that I am neither entirely disagreeing with nor entirely agreeing with Greene’s analysis and conclusions. I offer my thoughts here for whatever they may be worth, as part of the dialogue that Greene’s articles undoubtedly will provoke.
Continue Reading Commentary on “Winning the Securities Class Action War”

gavel1Here at The D&O Diary we generally review securities class action lawsuit complaints as they come in. The complaints pretty reliably make for interesting reading but every now and there are specific complaints that particularly catch our eye. Among the host of new securities class action lawsuit filings this past week, there were two that were of particular interest.
Continue Reading Reading the Latest Securities Class Action Lawsuit Complaints

pwcLargely driven by a “dramatic” increase in the number of federal court merger objection lawsuits, securities class action litigation filings rose to the highest level ever in 2016, according to PwC’s most recent annual securities litigation report. The report also noted that for the first time securities litigation rose though the stock market performance during the year did not, contrary to prior patterns. The April 2017 report, entitled “A Rising Tide or a Rogue Wave? 2016 Securities Litigation Study,” can be found here.
Continue Reading PwC Annual Study Reports Record Number of Securities Suits

cornerstoneAccording to Cornerstone Research’s latest annual survey of accounting-related securities suits, the number of accounting-related securities suit filings rose to the highest level in years in 2016, largely as a result of the number of federal court merger objection lawsuit filings involving accounting-related allegations during the year. The total value of accounting settlements during the year was also at the highest level in years. The Report, entitled “Accounting Class Action Filings and Settlements: 2016 Review and Analysis,” can be found here. Cornerstone Research’s April 5, 2017 press release about the report can be found here.
Continue Reading Cornerstone Research: 2016 Accounting-Related Securities Suit Filings and Settlements Again Increased

gavel1Most securities class action lawsuits that are not dismissed outright ultimately settle. One of the starting points for securities suit settlement negotiations is what is referred to as “plaintiffs’ style” damages estimate. The plaintiffs’ damages estimate is usually adjusted to reflect the composition of the class, the duration of the class period, trading patterns in the defendant company’s stock, and so on. Even with these adjustments, the dollar amount under discussion, at least on the plaintiffs’ side of the equation, is still some form of the plaintiffs’ damages estimate.

One specific fact that would be useful in the dialogue would be to know how much the estimated damages exceed the dollar amount of the damages claims that will actually be submitted and approved for payment if the case settles or if the plaintiffs prevail at trial. It is difficult to come up with the data to calculate these amounts because the outcomes of securities class action lawsuit settlement claims processes are not publicly available and because few cases go to trial and reach a verdict.

However, in a recent paper, several researchers from Cornerstone Research examined the claims data following two recent securities suit jury verdicts. Their analysis identifies actual claims rates in these two cases, information that may be useful to securities litigators and to their clients’ D&O insurers.
Continue Reading Securities Litigation: What if the Real Exposure is Less Than Supposed Damages?

rising numbersSecurities class action lawsuit filings have been going crazy. Securities suit filings during the first quarter 2017 set a pace that if continued would mean an unprecedented number of securities lawsuit by year end. But even more significant than the sheer number of lawsuits is the rate of litigation. The percentage of listed companies sued in the first quarter, if annualized, would mean that U.S. public companies are being sued at four times the long-term historical rate. As discussed below, three factors account for much of the upsurge in securities suit filings.
Continue Reading You Need to Know This: YTD Securities Class Action Lawsuit Filings are Off the Charts

EletrobrasAs I have frequently noted (most recently here), Brazil’s ever-expanding corruption investigation that initially focused on Petrobras, the country’s state-run oil company, has swept up an increasing number of companies across the country’s economy (and elsewhere in Latin America as well). Among the companies caught up in the investigation is the country’s state-run electrical energy company, Eletrobras, which like many of the companies under investigation that have securities trading on U.S. exchanges, was hit with a corruption-related U.S. securities class action lawsuit. The defendants in the Eletrobras securities suit moved to dismiss. In a lengthy and interesting March 25, 2017 opinion (here), Southern District of New York Judge John Koeltl largely denied the dismissal motion. The ruling is interesting not only because it relates to one of the Brazilian companies caught up in the corruption scandal, but also because it addresses a number of interesting legal issues.
Continue Reading Brazilian Energy Company’s Corruption-Related U.S. Securities Suit Survives Dismissal Motion

supreme courtThe U.S. Supreme Court has agreed to take up a case that will address a recurring issue that has arisen in the securities class action litigation arena – that is, whether or not the alleged failure to make a disclosure required by Item 303 of Reg. S-K is an actionable omission under Section 10(b) and Rule 10b-5. A circuit split has emerged on this issue, with the Second Circuit holding that Item 303 does create an actionable duty of disclosure, while the Ninth and Third Circuits have held that it does not. The Court’s grant of the writ of certiorari in the case of Leidos, Inc. v. Indiana Public Retirement System will afford the Court an opportunity to resolve the circuit split and to address the question of whether Item 303 creates an actionable disclosure duty. The U.S. Supreme Court’s March 27, 2017 order granting the writ of certiorari can be found here.
Continue Reading U.S. Supreme Court to Decide Whether Item 303 Creates Actionable Disclosure Duty