There were slightly fewer securities class action lawsuits and for fewer total dollars in 2019 compared to 2018, but the median settlement amount was unchanged in 2019 from the year prior, according to the annual securities suit settlement report from Cornerstone Research. The report, which is entitled “Securities Class Action Settlements: 2019 Review and Analysis,” states that the $11.5 million median securities class action settlement in 2019 was 34 percent higher than the 2010-2018 median. The report can be found here. Cornerstone Research’s February 26, 2020 press release about the report can be found here.
Continue Reading Total and Average Securities Settlements Down, Median Settlements Unchanged
2020 PLUS D&O Symposium in New York
On Tuesday and Wednesday this week, The D&O Diary was at the annual PLUS D&O Symposium at the Marriott Marquis in Times Square in New York. It was another successful conference — and indeed given the state of the D&O marketplace, there was certainly a lot to talk about this year.
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Guest Post: 7 Key SEC Developments in 2019
In the following guest post, Jay Knight, Taylor Wirth and Chris Johnson of the Bass, Berry & Sims law firm review the key developments at the Securities and Exchange Commission (SEC) during 2019, and consider what to expect in the months ahead. I would like to thank the authors for allowing me to publish their article as a guest post 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 the authors’ article.
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“Voluntary Parting” Exclusion Precludes Coverage for Social Engineering Fraud Loss
Social engineering fraud, or as it is sometimes called, business instruction fraud, has unfortunately become all too common. In many instances, the defrauded companies’ losses are huge. In a recent insurance coverage dispute, the social engineering fraud loss involved was not as large as some of the others have been. Unfortunately, and notwithstanding the relatively small size of the loss, the court concluded that coverage for the company’s loss was precluded by the “voluntary parting” exclusion in its crime policy. As discussed below, there are still some lessons to be drawn from this case. Eastern District of Virginia Judge John A. Gibney, Jr.’s February 20, 2020 opinion in the case can be found here.
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A Closer Look at Warren Buffett’s Annual Letter to Berkshire Shareholders
Like many others, I look forward to Warren Buffett’s annual letter to Berkshire Hathaway shareholders, and like many others, I read his annual letter closely, looking for any investment insights I can glean as well for Buffett’s now-famous homespun brand of wisdom and humor. Although Buffett latest letter to Berkshire shareholders – which was published Saturday morning – does offer readers a little under each of these headings, I think many reading Buffet’s latest letter might have come away a little disappointed, as I discuss further below. Buffett’s 2019 letter to Berkshire shareholders, published on February 22, 2020, can be found here. (Full disclosure: I own BRK.B shares, although not as many as I wish I did.)
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Monday February 24, 2020 is Spencer Day
The board of the Spencer Educational Foundation has declared Monday, February 24, 2020 as Spencer Day. The Spencer Education Foundation was founded in 1979 to fund the education of tomorrow’s risk management and insurance leaders through scholarships and grants for students risk management, insurance, actuarial science and business. The organization also facilitates internship opportunities, provides on and off campus experiential learning opportunities through grants, and funds development of risk management/insurance curriculum. The purpose of the Spencer Day designation is to showcase Spencer scholarship recipients, the companies who hire them, and the myriad ways that Spencer supports industry education.
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Guest Post: Late Notice: Misinformation, Mistake or Missed Opportunity?
As regular readers know, I have written frequently in the past about late notice issues. In the following guest post, Gregg Glick, Senior Vice President, Private Company/Not-For-Profit Practice Lead at Allied World, and Erin M. Ringbloom, Esq. Vice President, North American Claims Group at Allied World, provide an insurer perspective, both from an underwriter and claims advisor point of view, on the issue of late notice. I would like to thank Gregg and Erin for allowing me 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 Gregg and Erin’s article.
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Directors’ and Officers’ Antitrust Liability Risks and D&O Insurance Concerns
In prior posts on this site (for example, here), I have noted the phenomenon of directors’ and officers’ liability claims arising in the wake of antitrust enforcement actions. These follow-on civil actions arguably represent one part of an increasing trend toward trying to hold individual directors and officers accountable for their companies’ antitrust violations. According to a recent paper, as a result of trends in relevant doctrines and enforcement policies, the risk to directors and officers from these developments is “likely to continue rising in the foreseeable future.” In his February 12, 2020 paper entitled “D&O Liability for Antitrust Violations” (here), University of Arizona Law Professor Barak Orbach details the developments contributing to these trends and reviews the implications for director and officer liability. Professor Orbach’s paper raises a number of interesting considerations, particularly from an insurance perspective, as discussed below.
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ISS Releases 2019 Top 100 Securities Class Action Lawsuit Settlements List
As was the case for the last two reporting years, there were relatively few larger securities class action lawsuit settlements during 2019 compared to prior years. As reported in latest large securities class action lawsuit settlement report from ISS Securities Class Action Services (ISS), there were only two settlements finalized in 2019 large enough to make the list of all time large settlements. However, there are a number of pending tentative securities class action lawsuit settlements that are likely to be finalized in 2020, and thus are likely to lead to an increase in the number of Top 100 settlements during the year. The February 20, 2020 report, entitled “The Top 100 U.S. Class Action Settlements of All Time (as of December 31, 2019)” can be found here.
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Equifax Data Breach-Related Securities Suit Settled for $149 Million
Over the last several years, plaintiffs’ lawyers have filed a number of D&O lawsuits against companies that had been hit with a cybersecurity incident. These suits have largely been unsuccessful, with the exception of the lawsuits filed against Yahoo in the wake of that company’s data breach. While the plaintiffs’ track record in data breach-related D&O lawsuits so far has not been good, a recent development could suggest that that has changed. On February 13, 2020, the parties to the Equifax data breach-related lawsuit filed a stipulation of settlement stating that the case has been settled based on the defendants’ agreement to pay $149 million. The settlement is subject to court approval. This settlement has a number of interesting implications, as discussed below. A copy of the parties’ stipulation of settlement can be found here.
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