As I have noted in prior posts (most recently here), there has been a wave of Special Purpose Acquisition Company (SPAC) offerings this year. And as I have also noted, with all of the SPAC offerings have come problems and concerns. As discussed in the following guest post from Carrie O’Neil, Doru Gavril, and Boris Feldman, the D&O insurance marketplace has struggled to respond to these developments, and a number of different approaches to SPAC transactions have emerged. Carrie is a Senior Vice President at CAC Specialty and serves as a product development leader and claims advocate within its Legal and Claims Practice. Doru is a partner at the Freshfields law firm. Boris is a partner and head of the U.S. Technology practice at Freshfields. A version of this article was published on A Fresh Take, Freshfields’ blog on M&A, litigation, and corporate governance. The article also appeared on the CAC Specialty blog, CACConnect, here. 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
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Ant Group’s Scrubbed IPO Triggers U.S. Failure to Launch Claim Against Alibaba
When I heard that moves by Chinese financial regulators had forced the Shangahi securities market to suspend Ant Group’s massive planned IPO, my first thought was that, if the offering had been planned for the U.S. the called halt to the offering might well give rise to a “failure to launch” claim. However, since Ant Group’s IPO was planned for the Shanghai and Hong Kong exchanges, the possibility of a claim seemed remote. As it has turned out, however, a failure to launch claim has been filed in the U.S. after all, with the added twist that the corporate defendant in the lawsuit is not Ant Group itself, but instead it is Alibaba, the U.S.-listed Chinese Internet commerce company that owns 33% of Ant Group’s equity interest. As discussed below, the new lawsuit against Alibaba has a number of interesting features.
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Guest Post: Corporate Governance Tales From (Virtual) Open Door Encounters – Part 3
After many decades of law practice, legal veteran Richard M. Leisner, a Senior Member in the Trenam law firm in Tampa, found that increasingly he has been called upon to be a sounding board and resource on proposed corporate transactions. In the following guest post, which is the third installment in a three-part series, Richie recounts a number of “open door encounters” – that is, occasions when colleagues came to his office to discuss pending matters. There are a number of important lessons from the tales described below. A version of this article previously was published in Trenam Law News & Insights, available at www.trenam.com. I would like to thank Richie for allowing me to publish his 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 Richie’s article.
Continue Reading Guest Post: Corporate Governance Tales From (Virtual) Open Door Encounters – Part 3
Zendesk Data Breach-Related Securities Lawsuit Dismissed
Although some cybersecurity incident-related securities lawsuits have proven to be successful for plaintiffs (refer, for example, here), many of these lawsuits have not gotten very far. The latest data breach-related securities lawsuit to hit the skids is suit filed last year against Zendesk. As discussed below, on November 9, 2020, Northern District of California Judge Charles Breyer granted the defendants’ motion to dismiss in the Zendesk lawsuit. A copy of Judge Breyer’s order can be found here.
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What Does the Biden Victory Mean for the SEC?
Now that the Presidential election has been called for Joe Biden, it is time to start asking what a Biden Presidency may mean, including in particular what SEC enforcement and regulatory activity might look like under a Biden Administration. As discussed below, the likelihood is that we will see a more active SEC enforcement division and a shift back toward a more active regulatory approach.
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Climate Change as a “Systemic Risk”: Markets, Regulation, and Disclosure
If you have not yet seen SEC Commissioner Allison Herren Lee’s speech delivered last week to the PLI’s annual Institute on Securities Litigation, you should take a few minutes and read what she had to say. In her November 5, 2020 speech, which can be found here, Lee warns that climate change represents a “systemic risk” to markets, the financial system, and our economy. After noting that climate change presents an even greater risk of “grave human and economic costs” than we experienced in the pandemic — and urging that we should learn the lessons that the pandemic presents — she calls for a coordinated effort to create uniform climate change reporting and disclosure standards to ensure that investors and markets are better informed about the risks that climate change represents.
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Does Increased IPO Activity Foreshadow Increased IPO-Related Securities Litigation Ahead?
In recent months, IPO activity has reached levels “not seen since the dot-com era,” according to a recent report on the IPO market. On November 3, 2020, the IPO Tracker reported that October was the busiest month for IPOs in 20 years. As discussed below, all this IPO activity may foretell the possibility of increased IPO-related securities litigation ahead.
According to the IPO Tracker, there were 85 IPOs completed in October 2020, which is “the busiest single month for IPOs in 20 years” – surpassing even September 2020’s totals, which had been the busiest month in that period. The October surge brings the 2020 YTD total through year’s first ten months to 351 completed offerings, which surpasses “every yearly total since 2000.”
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Petition to SEC Seeks Protection for Companies from Pandemic-Related Securities Suits
Readers of this blog well know that in recent years there has been unprecedented levels of securities class action litigation activity, and that even in the midst of the current global health crisis plaintiffs’ lawyers have filed what one law firm has characterized as a “wave” of COVID-19-related securities litigation. The heightened pace of securities filings over the last several years has already triggered calls for another round of securities litigation reform. Now, organizations representing business interests have filed a petition with the SEC seeking to have the agency implement a number of reforms to protect businesses from “unjustified COVID-19 lawsuits.”
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Despite COVID-19 Disruptions, SEC Recoveries at Record Levels in FY 2020
Fines and other recoveries in SEC enforcement action hit record levels during the agency’s fiscal year ended September 30, 2020, even as pandemic-related work closures dampened the number of enforcement actions the agency was able to file, according to the SEC Enforcement Division’s annual report released Monday. The SEC scored a record total of $4.6 billion in recoveries, largely as a result of big fines and disgorgements in a few large matters, while the 405 new standalone enforcement actions the agency filed was the lowest number in six years. The Enforcement Division’s annual report can be found here. The agency’s November 2, 2020 press release about the report can be found here.
Continue Reading Despite COVID-19 Disruptions, SEC Recoveries at Record Levels in FY 2020
Tallying and Analyzing COVID-19-Related Securities Suits
Since the coronavirus outbreak emerged earlier this year, I have been tracking the COVID-19-related securities class action lawsuits and writing about each of the cases as they have come in. In an October 28, 2020 memo entitled “COVID-19: Lessons from the Second Wave of Securities Fraud Lawsuits” (here), the WilmerHale law firm takes a deeper look at the coronavirus-related securities litigation, with particular focus on the securities suits filed in the May to September 2020 time frame. Along the way, the memo identifies a number of securities lawsuits filed during that period as coronavirus-related that I had not included in my COVID-19 litigation tally. As discussed below, the memo makes several interesting points about the coronavirus-related securities suits. I also discuss below whether or not I agree that the additional cases that the law firm identified in the memo belong on the list of coronavirus-related cases.
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