The massive Brazilian corruption scandal that began with an investigation of the state-owned oil company Petrobras and that has since spread both to other industries, including the construction industry, and to other Latin American countries, has now spread to an investigation of unsanitary practices and corruption in Brazil’s meatpacking industry. Among the Brazilian companies caught up in this latest scandal is JBS S.A., which is the world’s largest meat processing company. As has been the case with other companies caught up in Brazilian corruption scandal, JBS, whose Level 1 ADRs trade over-the-counter in the U.S., has now been hit with a follow-on securities class action lawsuit in the United States. This lawsuit is the latest in the string of lawsuits filed against companies from Brazil and elsewhere Latin America that have been hit with U.S. securities suits following news of their involvement in the burgeoning corruption scandal.
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Biotech Companies Sued Frequently But Do They Really Represent a Heightened Risk Class?
As has been documented on this blog and elsewhere, life sciences companies in general, and developmental stage biotechnology companies in particular, are frequent securities class action litigation targets. But does that really justify the perception of early stage biotech companies as representing a heightened securities litigation risk class for D&O insurers? A recent law firm paper contends that “contrary to popular belief, development stage biotech companies actually have less to fear from federal securities cases that do many other types of corporate defendants that have a far easier time securing insurance coverage.”
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Cornerstone Research: Securities Class Action Settlement Values Increased in 2016
The number of securities class action settlements as well as the aggregate, average, and median securities class action settlement values all increased in 2016 compared to the prior year, according to the latest annual report from Cornerstone Research. The report, entitled “Securities Class Action Settlements: 2016 Review and Analysis can be found here. Cornerstone Research’s March 15, 2017 press release regarding the report can be found here.
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Guest Post: Post-Morrison Application of U.S. Securities Laws to Foreign Issuers
In its June 2010 decision in Morrison v. National Australia Bank, the U.S. Supreme Court held that the U.S. securities laws do not apply extraterritorially. Since then, the lower U.S. federal district courts have struggled with applying Morrison in securities lawsuits involving foreign issuers. A host of recent U.S. lawsuits involving high-profile foreign companies has highlighted the important questions that can arise under Morrison. In the following guest post, David Topol and Margaret Thomas of the Wiley Rein law firm survey the post-Morrison case law, particularly as relates to lawsuits filed in U.S. courts under U.S. securities laws against companies domiciled outside the U.S. I would like to thank David and Maggie 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 David and Maggie’s guest post.
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A Closer Look at Securities Litigation Involving Life Sciences Companies
As I noted in my survey of 2016 securities class action litigation (here), one of the factors contributing to the rise in securities litigation last year was the volume of litigation filed against companies in the life sciences sector. According to an analysis of life sciences-related securities suits by the Dechert law firm, the annual number of securities suits filed against companies in the sector rose by over 70% between 2014 and 2016. The law firm’s February 17, 2017 report, entitled “Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies,” can be found here.
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Book Review: Federal Securities Litigation
The interpretation and application of the federal securities laws has in recent years proven to be a rapidly changing arena. For that reason, it is a particularly welcome development that the authors of the “Federal Securities Litigation: A Deskbook for the Practitioner” have released the latest update of their single-volume resource on litigation under the U.S. federal securities laws. The authors – Daniel Kramer and Audra Soloway of the Paul Weiss law firm, Jeff Hammel and David Brodsky of the Latham & Watkins law firm – have produced a fully updated version of the book, with changes reflecting important recent developments in the securities case law. The result is an updated volume that is clear, concise, and well-organized. Information about the 2016 update can be found here.
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Ninth Circuit: Ethics Code Violations Insufficient to State Securities Law Claim
In the wake of the era of corporate scandals, Congress enacted the Sarbanes-Oxley Act. Section 406 of the Act required the SEC to promulgate rules requiring reporting companies to disclose whether or not they have adopted a code of ethics for its financial officers. The SEC subsequently issued rules implementing this directive, and as a result companies facing the new disclosure obligations adopted codes of ethics.
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Guest Post: Supreme Court Nominee’s Skeptical View of Securities Litigation, Agency Deference
President Trump’s nomination of Tenth Circuit Justice Neil Gorsuch to fill the Supreme Court seat vacated by the late Justice Antonin Scalia has attracted a great deal of commentary and raised a host of questions about the proposed new Justice’s views on a variety of different subjects. In the following guest post, attorneys from the Paul Weiss law firm take a look at the proposed Justice’s past writings and opinions on securities litigation and agency deference questions. I would like to thank the Paul Weiss attorneys for allowing me to publish their 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 Paul Weiss attorneys’ guest post.
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Cornerstone Research: Securities Lawsuit Filings Rise to Highest Level in 20 Years
According to the latest annual securities litigation survey, securities class action lawsuit filings were at “record” levels in 2016. A surge of federal court merger objection lawsuit filings during the year accounted for much of the activity, but even so-called “traditional” securities lawsuit filings were at elevated levels, according to report, which was release jointly by Cornerstone Research and the Stanford Law School Class Action Clearinghouse. The January 31, 2017 report, entitled “Securities Class Action Filings: 2016 Year in Review,” can be found here. Cornerstone Research’s and the Stanford Law School Class Action Clearinghouse’s January 31, 2017 press release can be found here.
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Record Setting Securities Suit Filing Pace Accelerates Into New Year
As the various annual securities suit filing reports have been coming out, it has become clear that federal securities class action lawsuit filings were at record levels in 2016, largely as a result of a rise of merger objection lawsuit filings in federal court. Now that 2017 is well underway, it is clear that the heightened pace of securities suit filing has continued, and arguably even accelerated, in the New Year.
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