Securities Litigation

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paul weiss largeAmong the decisions that the Supreme Court issued this past Monday was its unanimous ruling in Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning (here), in which the Court held that the ’34 Act’s  exclusive federal jurisdiction provisions do not preclude a claimant from pursuing state law securities claims in state court.  In the following guest post, attorneys from the Paul Weiss law firm take a look at the Court’s decision in the case and discuss its implications. I would like to thank the Paul Weiss attorneys 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 Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Supreme Court Rejects Federal Jurisdiction over State Law Claims that Do Not Necessarily Raise Exchange Act Issues

delmapWhen Delaware Chancellor Andre Bouchard rejected the proposed disclosure-only settlement in the litigation arising out of Zillow’s acquisition of Trulia, there was some belief that his decision represented the death knell for these kinds of settlements in merger objection lawsuits. There is indeed some evidence that the number of merger objection lawsuits filed has declined. However, as discussed in an April 29, 2016 Washington Legal Foundation article by attorneys Anthony Rickey and Keola R. Whittaker (here), “Delaware’s sister courts continue to approved disclosure only settlements and award six-figure attorneys’ fees.” As discussed below, the net effect of Delaware’s hostility to disclosure only settlements may not necessarily be that fewer of these kinds of cases get filed, it may be that weaker cases are “driven to other jurisdictions.”
Continue Reading Will Disclosure-Only Settlements in Merger Objection Suits Live On Outside Delaware?

californiaOne of the interesting (and challenging) quirks of the federal securities laws is that Section 22 of the ’33 Act provides concurrent state court jurisdiction for liability actions under the Act. Many courts have taken the view that legislation subsequent to the ’33 Act preempts state court jurisdiction under Section 22, as discussed here. While the courts continue to struggle with the preemption question, some plaintiffs are continuing to file ’33 Act actions in state court, particularly in California.

In the following guest post, Priya Cherian Huskins, Donna Moser, and Vysali Soundararajan of Woodruff-Sawyer & Co. take a look at these state court securities lawsuits, and in particular at the recently increased numbers of state court filings in California, as well as the practical implications. I would like to thank Priya, Donna and Vysali for their willingness to publish their article on my 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 Priya, Donna, and Vysali’s guest post.
Continue Reading Guest Post: IPO Companies, Section 11 Suits, and California State Court

cornerstone reserach pdfThe number of securities class action lawsuit filings raising accounting-related allegations rose in 2015, as did the number and value of accounting-related securities suit settlements, according to a new report from Cornerstone Research. In addition to the increase in the number of accounted-related lawsuit filings, the market capitalization losses associated with those new filings increased as well. The April 19, 2016 report, entitled “Accounting Class Action Filings and Settlements: 2015 Review and Analysis,” can be found here. Cornerstone Research’s April 19, 2016 press release about the report can be found here.
Continue Reading Cornerstone Research: Accounting-Related Securities Suit Filings and Settlements Increase

paul weiss largeIn its June 2014 decision in Halliburton Co. v. Erica P. John Fund, Inc., the U.S. Supreme Court held, among other things, that in order to try to rebut the fraud-on-the-market presumption in order to defeat class certification, defendants can contend that the allegedly corrective disclosure did not impact the defendants company’s share price. In an April 12, 2016 decision in IBEW Local 98 Pension Fund v. Best Buy Co., Inc., the Eight Circuit, applying Halliburton, held that the defendants had successfully rebutted the presumption in the case by demonstrating absence of price impact. In the following guest post, attorneys from the Paul Weiss law firm takes a look at the Eighth Circuit’s decision and considers its significance. I would like to thank the attorneys from the Paul Weiss firm 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Eight Circuit: Under Halliburton II, Defendants Successfully Rebut Fraud-on-the Market Presumption

pwc3Largely as a result of the number of suits filed against smaller companies, the number of securities class action lawsuits filed in 2015 increased for the third year in a row, to the highest level since 2008, according to a new report from PwC. The April 2016 report, entitled “Small Companies, Big Targets: 2015 Securities Litigation Study,” can be found here. The numbers in the PwC report differ slightly from the figures reported in previously released annual securities class action litigation studies by Cornerstone Research (here) and NERA Economic Consulting (here), but the reports are directionally consistent. My own analysis of the 2015 securities litigation filings can be found here.
Continue Reading PwC Report: Surge of Suits Involving Smaller Companies Drove 2015 Securities Suit Filing Increase

cornerstone reserach pdfAggregate and average securities class action lawsuit settlements increased significantly in 2015 compared to the year before, according to the latest annual report from Cornerstone Research. Among reasons for the increase in aggregate settlement amounts is the increase in the absolute number of settlements during the year. The increase in the average settlement amount is largely attributable to an increase in the number of “mega” settlements. While overall and average settlement amounts increased during the year, the number of smaller settlements also increased, and median settlement amounts held steady. The Cornerstone Research report, entitled “Securities Class Action Settlements: 2015 Review and Analysis,” can be found here. Cornerstone Research’s March 29, 2016 press release about the report can be found here.
Continue Reading Cornerstone Research: Aggregate and Average Securities Suit Settlements Surged in 2015

paul weiss largeIn the wake of the U.S. Supreme Court’s March 24, 2015 opinion in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (here), there was a great deal of speculation about what the decision’s practical impact would be and how the case would be applied in the lower courts. On March 4, 2016, the Second Circuit issued an important opinion in Tongue v. Sanofi (here) interpreting and applying Omnicare. In the following guest post, the Paul Weiss law firm take a look at the Sanofi decision and discuss Second Circuit’s narrow interpretation and application of Omnicare, and the Second Circuit’s holding that issuers need not disclose information merely because it cuts against their opinions or projections. I would like to thank the attorneys from Paul Weiss for their willingness to publish their article as a guest post on this site. I welcome guest post submissions 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 Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Second Circuit Ruling in Sanofi Narrowly Interprets Omnicare

As part of our beat here at The D&O Diaryfilings2016, we regularly monitor new lawsuit filings and try to identify trends and patterns. Over the years, we have noted and commented on this blog about many of the trends and patterns we have identified. More than once we have noted the incidence of director and officer liability litigation arising out of environmental issues. We have also noted that D&O litigation often follows after the announcement of FCPA investigations. As discussed below, there has been a flurry of recent filings involving environmental issues. I have also noted below an interesting variant on the FCPA follow-on civil lawsuit pattern.
Continue Reading Field Notes on Recent Corporate Suit Filing Trends

HBIIThis past year was an eventful one in the corporate and securities litigation arena, with the U.S. Supreme Court’s decision in the Omnicare case, important rulings in the lower courts applying the Supreme Court’s Halliburton II decision, and a host of other important decision on critical securities law issues. In the following memorandum from the Haynes and Boone law firm, attorneys from the firm’s Securities and Shareholder Litigation group take a look at the important securities litigation developments during 2015. I would like to thank the firm and the group for their willingness to publish their memorandum on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this site. Please contact me directly if you are interested in submitting a guest post. Here is the Haynes and Boone firm’s memorandum.

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Each year our Year in Review comments on significant securities-related decisions by the Supreme Court, federal appellate courts and district courts, notes key developments in SEC enforcement, and summarizes significant rulings in state law fiduciary litigation against directors and officers of public companies.
Continue Reading Guest Post: Year in Review: Securities Litigation