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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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I am sure that when most people think about the kind of organization that might engage in an Initial Coin Offering (ICO), they typically are thinking of a start-up venture — an enterprise trying to get off the ground. But there have been some high-profile cases of well-established companies trying to jump on board the cryptocurrency bandwagon. For example, Kodak, the iconic film and photographic equipment company that has fallen on hard times in recent years, announced a plan earlier this year to launch KodakCoin, a photography-focused cryptocurrency that is supposed to help photographers manage their collections by creating permanent, immutable records of ownership. (Kodak’s later postponed the planned launch.)

The online retailer Overstock.com is another established company that late last year announced plans for a cryptocurrency offering. Overstock’s cryptocurrency plans were derailed earlier this month after its planned offering drew SEC scrutiny. Now, the company has been hit with a securities class action lawsuit relating to its miscarried cryptocurrency initiative, as discussed below. Though much of what happened to Overstock is company- specific, the sequence of events and the overall circumstances may have some important lessons as the cryptocurrency phenomenon evolves.   
Continue Reading We Need to Talk About ICOs, Cryptocurrency, and Blockchain

Noelle Reed
Austin Winniford
Caroline Van Zile

As I noted at the time, in December 2017, the U.S. Supreme Court granted cert in China Agritech Inc. v. Resh to take up the question of whether the prior filing of a class action lawsuit tolls statutes of limitation to permit previously absent class members to bring a subsequent class action outside the applicable limitations period. Oral argument in the case took place on Monday, October 26, 2018. In the following guest post, Noelle Reed, Austin Winniford,  and Caroline Van Zile of the Skadden Arps law firm provide their analysis of the oral argument. 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. Here is the authors’ guest post.

****************************************Continue Reading Guest Post: Supreme Court Weighs Whether To Extend American Pipe Tolling

In prior posts (for example here), I noted that a series of Delaware court decisions culminating in the Court of Chancery’s January 2016 opinion in the Trulia case signaled the state’s courts’ hostility to disclosure-only settlements in merger objection lawsuit, which in turn has encouraged merger objectors to file their lawsuits in other jurisdictions. The Trulia line of cases is in fact only one of several recent judicial developments in Delaware that constrain shareholder claimants. So is stockholder litigation in trouble in Delaware? In a March 22, 2018 post on the Delaware Business Litigation Report (here), Edward McNally of the Morris James law firm take a look at this question, discussing where things stand while Delaware’s courts look to find the proper balance.
Continue Reading Is Shareholder Litigation in Delaware in Trouble?

The extraordinary levels of securities litigation filings during 2017 have been the subject of numerous commentaries, including on this blog. In a March 19, 2018 post on The CLS Blue Sky Blog, Columbia Law School Professor John Coffee adds his observations to the discussion about the 2017 securities suit filings. In his article, entitled “Securities Litigation in 2017: It Was the Best of Times, It Was the Worst of Times” (here), Coffee’s commentary about last year’s securities suit filings is consistent with prior reports and analyses. One specific aspect of his commentary – relating to the phenomenon of event-driven securities litigation – is particularly noteworthy, as discussed below.
Continue Reading Scrutinizing Event-Driven Securities Litigation  

Boris Feldman
Ignacio Salceda

As I discussed in a post last week, on March 20, 2018 the U.S. Supreme Court unanimously held in Cyan, Inc. v. Beaver County Employees Retirement Fund that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) did not eliminate state courts’ concurrent jurisdiction to hear liability lawsuits alleging only violations of the Securities Act of 1933. In the following guest post, Boris Feldman and Ignacio Salceda of the Wilson Sonsini law firm review the court’s decision and consider what may be next for claimants and for companies. A version of this article previously was published on Law 360. I would like to thank Boris and Ignacio for their willingness to allow 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 Boris’s and Ignacio’s article.
Continue Reading Guest Post: After Cyan — Some Prognostications

As I have frequently noted, a recurring and vexing D&O insurance issue is the question of relatedness between different claims. Another frequent D&O insurance coverage issue is the question of the applicability of a special event or prior litigation exclusion. A recent Southern District of Indiana decision, applying Indiana law, addressed both of these issues in the course of determining that a Special Event Exclusion in Emmis Communications Corp.’s D&O insurance policy did not preclude coverage for the defense costs the company incurred in defending a shareholder suit relating to the company’s preferred stock. The decision is very fact specific, but because of the range of issues involved, the opinion is interesting and it also underscores the critical importance of the precise wording used in exclusionary clauses. The March 21, 2018 opinion can be found here.
Continue Reading D&O Insurance: Special Event Exclusion Does Not Preclude Subsequent Litigation Coverage

Amidst the flurry of Supreme Court decisions, new lawsuits, and other activity in the last few days, I have not yet had the chance to comment on a particularly important development earlier this week. That is, on March 19, 2018, the SEC announced the two largest whistleblower bounty awards in the history of its whistleblower bounty program. The value of the two awards to three whistleblowers, whose reports led to a $415 settlement with Merrill Lynch, totaled roughly $83 million. These awards are significant, and not just because of their size, as discussed below. The SEC’s March 19, 2018 press release about the awards can be found here, and the SEC’s heavily redacted March 19, 2018 Order Determining Whistleblower Award Claims can be found here.
Continue Reading A Lot is Going On Now, But Don’t Overlook the SEC’s Whistleblower Awards Earlier This Week

For some time, observers (including me) have been discussing the extent to which the rising numbers of corporate data breaches would translate into to D&O litigation. There of course have been some data breach-related D&O lawsuits;  indeed, plaintiffs’ lawyers have recently for the first time managed to secure some success with these kinds of suits – as discussed here, Yahoo recently settled a data breach related securities class action lawsuit for $80 million. In light of the Yahoo settlement, the possibility for further data breach-related D&O litigation seems likely. But as I was reading the complaint in a securities class action lawsuit filed earlier this week against Facebook, I began to think that a related but slightly different data security-related concern might actually present an even more significant risk of future D&O claims.
Continue Reading Do Privacy Issues Represent the Next Big D&O Liability Exposure?

In a unanimous March 20, 2018 opinion written by Justice Elena Kagan, the U.S. Supreme Court held that state courts retain concurrent jurisdiction over class action lawsuits alleging only violations of the Securities Act of 1933’s liability provisions and that these state court class action lawsuits are not removable to federal court. The court’s holding resolves a lower court split in the authorities on question of whether or not the Securities Litigation Uniform Standards Act of 1998 (SLUSA) eliminated concurrent state court jurisdiction for these ’33 Act class action lawsuits or made the state court ’33 Act lawsuits removable to federal court.

As discussed below, Court’s ruling is likely to result in an increase in ’33 Act claims in state court, a development that could have unwelcome consequences for corporate defendants and their insurers. The Supreme Court’s March 20, 2018 decision in Cyan, Inc. v. Beaver County Employees Retirement Fund can be found here.
Continue Reading U.S. Supreme Court: Notwithstanding SLUSA, State Courts Retain Concurrent Jurisdiction for ’33 Act Claims

Frankfurt am Main

The D&O Diary was on assignment in Germany last week for meetings and to attend a conference. The excursion was a bit of a return tour, as I have previously visited all of the stops on the itinerary. My wife accompanied me this time, and for her each stop represented a first encounter. With the help of the excellent German train system, we managed to visit a number of German cities in a very brief period, and to see a little of the countryside, as well.
Continue Reading Scenes of Germany