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Kevin LaCroix

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Kevin M. LaCroix is an attorney and Executive Vice President, RT ProExec, a division of RT Specialty. RT ProExec is an insurance intermediary focused exclusively on management liability issues.

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Federal Reserve Building, Washington, D.C.

The Federal Reserve wants bank directors and senior executives  to know that while their D&O insurance policies are “an important risk mitigation tool,” their policies could contain exclusions that could “potentially limit coverage” and leave them without insurance in the event of a claim. In a July 23, 2019 letter (here), the Fed informed banks and other financial institutions of the risks associated with exclusionary provisions in D&O insurance policies and urged board members and senior executives to “understand fully the protections and limitations” that the D&O insurance policies provide. As discussed below, the Fed’s guidance is good advice for directors and senior executives of any organization, not just for banks. An August 3, 2019 post on the Willis Towers Watson blog about the Fed letter can be found here.
Continue Reading The Fed Has a Message for Banks about D&O Insurance          

Bill Boeck

In a number of prior posts, I suggested that privacy related issues may be a significant area of potential corporate risk in the months and years ahead. Among the potential sources of risk are the legal requirements of the General Data Protection Regulation (GDPR), the EU’s privacy regulation, which just went into effect in May 2018. Because GDPR is still relatively new, we are still learning what it means in terms of corporate risk. In the following guest post, Bill Boeck takes a look at one interesting and arguably surprising aspects of GDPR’s requirements. Bill is currently Senior Vice President and Insurance and Claims Counsel with the Lockton Companies.  He is Lockton’s global leader for cyber claims and for the development of proprietary cyber wordings and endorsements.  Bill also leads Lockton’s US financial lines claims practice. A version of this article previously was published on the Lockton Cyber Risk Update Blog. I would like to thank Bill for his willingness to allow me to publish his article 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 Bill’s article.
Continue Reading Guest Post: Using Facebook’s “Like” Button May Violate the GDPR

At a time when litigation involving corporate disclosures regarding cybersecurity, privacy, and human resource practices and other hot topics dominate the discussion, potential corporate exposure arising from environmental liabilities and disclosures does not always receive the attention it deserves. However, as I have previously noted on this blog,  environmental disclosures can and frequently are the subject of D&O litigation, both in the form of securities class action litigation and shareholder derivative litigation. A new securities suit recently filed against 3M is the latest example of corporate and securities litigation arising from environmental disclosure-related issues. As discussed further below, the 3M complaint is also the latest example of event-driven securities litigation as well.
Continue Reading Environmental Liability-Related Securities Suit Filed Against 3M

John Reed Stark

The news of the recent massive data breach at Capital One made the front pages of the business sections of newspapers across the country. The hack has drawn attention not just because of the magnitude of the hack, but also because the hackers apparently managed to steal data from The Cloud. The Capital Data breach represents a “wake-up call” for boards of directors, according to the following guest post from John Reed Stark. John is President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement. A version of this article originally appeared on Securities Docket. My thanks to John for allowing me to publish his article 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 John’s article.
Continue Reading Guest Post: What the Capital One Hack Means for Board of Directors

Under the Delaware Chancery Court decision in the Caremark case, directors can be liable for failures in their oversight duties – that is, their duties to monitor the company and its functions. Lawsuits alleging a violation of the duty of oversight are notoriously challenging for plaintiffs. However, in the recent Marchand v. Barnhill case, the Delaware Supreme Court reversed the Chancery Court’s dismissal of a Caremark liability case and allowed the case to proceed against the board of an ice cream manufacturer that experienced a deadly listeria outbreak. Caremark liability cases remain difficult to plead and prove, but the Marchand decision nevertheless has important implications for director liability for breaches of their duty of oversight.
Continue Reading Recent Delaware Caremark Duty Decision Underscores Board Cyber and Privacy Liability Risks

As the number of shareholder appraisal lawsuits increased a few years ago, a recurring question has been whether or not a company’s D&O insurance covers the company’s costs incurred in defending an appraisal action. In a recent decision, a Delaware Superior Court judge rejected a number of the recurring coverage defenses on which insurers rely in disputing coverage for appraisal action costs and expenses. The Court’s opinion in the Solera Holdings case contains several very interesting rulings, some of which could be relevant even outside of the appraisal action context. A copy of the Delaware Superior Court’s July 31, 2019 opinion can be found here.
Continue Reading D&O Insurance: Del. Court Rejects Insurers’ Appraisal Action Coverage Defenses

Nessim Mezrahi

In numerous prior posts on this site (for example, here), I have written about the problems caused by the U.S. Supreme Court’s March 2018 decision in Cyan, Inc. v. Beaver County Employees Retirement Fund. In the following guest post, Nessim Mezrahi, cofounder and CEO of SAR, a securities class action data analytics and software company, issues a call for reform to address the “confusion” that Cyan has caused. A version of this article previously appeared on Law 360. I would like to thank Nessim for allowing me to publish his article 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 publish a guest post. Here is Nessim’s article.
Continue Reading Guest Post: Time To Resolve Post-Cyan Securities Class Action Confusion

Plaintiffs filed federal court securities class action lawsuits at  “near-record levels” during the first six months of 2019, according to a new report from Cornerstone Research. The July 31, 2019 report, entitled “Securities Class Action Filings: 2019 Midyear Assessment,” notes that the elevated filing levels continued in the year’s first half despite reduced numbers of merger objection lawsuit filings. In addition to the number of federal court filings, there were a significant number of state court securities suit filings, bringing overall filing levels close to all-time highs. The new report can be found here. Cornerstone Research’s July 31, 2019 press release about the report can be found here. My own analysis of the first half filings can be found here.
Continue Reading Federal Court Securities Suit Filings at Near Record Pace in Year’s First Half

Syed Ahmad
Andrea DeField

Regular readers of this blog know that a recurring D&O insurance coverage issue is a question of whether or not the D&O policy provides coverage for various types of regulatory and prosecutorial investigations. In the following guest post, Syed Ahmad and Andrea DeField  take a look at a recent Delaware Superior Court decision in which the court held that the D&O policy at issue provides coverage for costs incurred in responding to a civil investigative demand (CID). Syed is a partner and Andrea is an associate at the Hunton Andrews Kurth LLP law firm. I would like to thank Syed and Andrea for allowing me to publish their article 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 Syed and Andrea’s article.
Continue Reading Guest Post: Delaware Court Weighs In on the CID Coverage Debate

The directors of companies have roles, responsibilities and potential liabilities. But who can be held liable as a director? That was the question that the Third Circuit recently answered in an interesting ruling in which the appellate court determined that board observers could not be held liable as directors or director equivalents under Section 11 for alleged registration misstatement misrepresentations. The decision raises some interesting considerations when it comes to directors and their roles. The Third Circuit’s July 23, 2019 decision can be found here.
Continue Reading Board Observers Not Subject to Section 11 Director Liability