While it may or may not be true, as some have said, that “everything is securities fraud,” it certainly does seem to be the case that there is not an event or development that occurs that does not eventually draw a securities lawsuit. For that reason, I was pretty sure that eventually we would see securities litigation relating to the Russian invasion of Ukraine. Well, as it has turned out, at least one securities lawsuit has now been filed based on circumstances relating to the war in Ukraine. Late last week, a plaintiff shareholder filed a securities class action lawsuit against Credit Suisse Group based on allegations concerning the enforcement of economic sanctions imposed on Russian oligarchs in the wake of the Russian invasion. A copy of the plaintiff’s April 29, 2022 complaint can be found here.
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CBS Settles #Me-Too-Related Securities Class Action Lawsuit
Readers will recall that at the peak of the #MeToo movement, several companies were hit with securities lawsuits and other types of D&O claims relating to underlying allegations of sexual misconduct or sexual harassment. Among these lawsuits was the #MeToo-related securities class action lawsuit filed against CBS. The CBS lawsuit was largely dismissed; however, one allegation survived the dismissal motion. Now, the parties to the CBS lawsuit have agreed to settle the case, as discussed below. The settlement is subject to court approval. The parties’ April 15, 2022 stipulation of settlement can be found here.
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Del. Supreme Court: Opt-Out Action “Related” to Securities Class Action, Precluding Coverage
In an interesting decision that explores the standard to be used in determining whether an earlier claim and a later claim are interrelated, the Delaware Supreme Court has affirmed a lower court ruling that a later filed opt-out action is related to a securities lawsuit earlier filed against First Solar, and therefore that the opt-out action is not covered under the D&O insurance program in place at the time the opt-out action was filed. Interestingly, the Supreme Court affirmed the lower court even though the appellate court held that the lower court had erroneously applied a “fundamentally identical” standard to the relatedness question rather than the relatedness standard defined by the policies. The Delaware Supreme Court’s March 16, 2022 opinion can be found here.
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Scenes from the PLUS D&O Symposium
It was great to be in New York on Tuesday and Wednesday this week for the return of the live version of the annual PLUS D&O Symposium. I am certain I was not the only one at the event who was delighted to be among friends and colleagues again and to meet so many new people. In one sense, it was a little awkward for everyone, since it has been so long since any of us have been around other people. But with appropriate precautions in place, everything went well and it was just fine being in a large gathering again. My congrats to the Conference organizers for putting together a great conference and to the PLUS staff for putting on a great show.
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Upcoming New York City Bar Securities Litigation & Enforcement Institute
On February 9, 2022, the New York City Bar will be hosting the 10th Annual Securities Litigation & Enforcement Institute in a webcast format. The program will go from 9 am to 5 pm and will include a number of distinguished speakers. The keynote speaker keynote speaker will be Steven Peikin, the former Co-Head
SPAC-Related Securities Suit Dismissal Motion Substantially Denied
As I noted in my recent year-end wrap up, one of the top D&O stories of 2021 was the surge of SPAC-related securities litigation during the year. Most of these SPAC-related lawsuits have only just been filed, and it remains to be seen how they will fare. However, in a development that may represent an early sign concerning the prospects for these cases, on January 14, 2022, a federal district court substantially denied the motion to dismiss in the securities class action lawsuit filed last year against electric vehicle battery developer and manufacturer, QuantumScape. As discussed below, the court’s dismissal motion ruling has several noteworthy features. Northern District of California Judge William H. Orrick’s January 14, 2022 in the QuantumScape case can be found here.
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Guest Post: Boeing and the Ongoing Evolution of Director Responsibilities
As readers will recall, in a September 7, 2021 opinion, Delaware Vice Chancellor Morgan T. Zurn largely denied the defendants’ motion to dismiss in the Boeing Max 737 Shareholder Derivative Litigation. Two months later, the parties in the action settled the case for $237.5 million. In the following guest post, Suzanne H. Gilbert, H. Stephen Grace Jr., and S. Lawrence Prendergast examine Vice Chancellor Zurn’s Boeing opinion and consider its implications for directors’ board responsibilities. Suzanne H. Gilbert is a member of the Board of Advisors of Grace & Co. Consultancy, Inc.; H. Stephen Grace Jr., Ph.D., is President of H.S. Grace & Company, Inc.; and S. Lawrence Prendergast is a member of the Board of Advisors of Grace & Co. Consultancy, Inc. and is Chairman of the Turrell Fund. A version of this article previously was published in the American Bar Association’s Business Law Today. I would like to thank the authors 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. The authors’ article follows.
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SPAC-Related Securities Suit Filed Against Space Gear Company
In the latest example of the kind of SPAC-related litigation that has been such a big part of the securities class action litigation filings this year, space infrastructure company Redwire Corporation, which merged with a publicly traded SPAC in September 2021, was hit with a securities class action lawsuit after the company delayed filing its third-quarter financial results. A copy of the December 17, 2021 complaint can be found here.
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Upcoming Webinar: The Top Ten D&O Stories of 2021
In early January 2022, I will be publishing on this site my annual survey of the Top Ten Stories in D&O. On Thursday, January 13, 2022, my colleague Marissa Streckfus and I will be hosting a one-hour webinar on the topic of “The Top Ten D&O Stories of 2021.” We will be discussing the key
Nikola Founder Indicted for Securities Fraud, Hit with SEC Enforcement Suit
Trevor Milton, the founder, former Chairman, and largest shareholder of electric vehicle company Nikola Corporation, has been indicted by a federal grand jury in Manhattan. The indictment, which alleges that Milton “engaged in a scheme to defraud investors” by making “deceptive, false, and misleading claims” about “nearly all aspects” of the company’s business, presents criminal charges against Milton for two counts of securities fraud and one count of wire fraud. Milton has also been named as a defendant by the SEC in a separate civil enforcement action accusing Milton of securities fraud. A copy of the indictment can be found here. The S.D.N.Y. U.S. Attorney’s office July 29, 2021 press release about the indictment can be found here. The SEC’s Jcomplaint against Milton can be found here. The SEC’s July 21, 2021 press release about the complaint can be found here.
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