For the second straight year, securities class action lawsuit filings reached record levels in 2017, according to the January 30, 2018 report from Cornerstone Research. According to the report, entitled “Securities Class Action Filings: 2017 Year in Review” (here), securities suit filings during the year reached “unprecedented levels” and companies on U.S. exchanges were more likely to be the subject of a securities suit than in any previous year. Cornerstone Research’s January 30, 2018 press release about the report can be found here. My own analysis of the 2017 securities class action lawsuit filings can be found here.
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Guest Post: Beware ICO Lawyers: As Regulatory Gatekeepers, You’re the Next SEC Target
Many readers may have noted SEC Jay Clayton’s January 22, 2018 speech about his agency’s scrutiny of cryptocurrencies, as well as the January 24, 2018 opinion piece Clayton wrote in the Wall Street Journal along with his counterpart from the CFTC, J. Christopher Giancarlo. In both statements, Clayton made in clear that the SEC intends to hold gatekeepers to account for their activities in connection with ICOs and cryptocurrencies. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at the SEC’s cryptocurrency related focus on gatekeeper liability. I would like to thank John for his willingness 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 John’s guest post.
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NERA: 2017 Securities Suits Filed at “Record Pace”
According to a January 29, 2018 report from NERA Economic Consulting, there was “an explosion” of U.S. federal court securities class action litigation filing in 2017, as new securities suits were filed at a “record pace.” The report, entitled “Record Trends in Securities Class Action Litigation: 2017 Full-Year Review,” can be found here. NERA’s January 27, 2018 press release regarding the report can be found here. My analysis of the 2017 securities class action lawsuit filings can be found here.
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As Predicted, Another Cryptocurrency-Related Securities Suit
In the recent Advisen quarterly claims webinar, when asked to make a claim prediction for 2018, I said that I thought we would see more cryptocurrency-related regulatory action, enforcement action, and litigation this year. Some might say I was not really going out on a limb with this prediction. After all, earlier this week, Jay Clayton, the Chair of the SEC, and J. Christopher Giancarlo, the head of the CFTC, took to the editorial pages of the Wall Street Journal to make the point that their respective agencies are closely monitoring cryptocurrency activities and that the agencies will take action when warranted. That same day, the CFTC announced its third fraud enforcement action in a week.
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Second Circuit: Professional Services Exclusion Precludes D&O Coverage for NASDAQ’s Facebook IPO Claims
A recurring D&O insurance issue is the question of whether or not coverage for a particular claim is precluded under the relevant policy’s professional services exclusion. A recent decision by the Second Circuit addressed questions concerning the applicability of a professional services exclusion in a D&O insurance coverage dispute arising out of the mistake-plagued Facebook IPO. In a January 22, 2018 opinion (here), the appellate court affirmed the district court’s ruling that coverage for the settlement of Facebook IPO investors’ claims against NASDAQ was precluded by the NASDAQ’s D&O insurance policy’s professional services exclusion. The opinion includes some interesting discussion of considerations relevant to the exclusion’s applicability.
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Guest Post: Second Circuit Holds Defendants’ Fraud-on-the-Market Presumption Rebuttal Need Not Be Conclusive
In the following guest post, attorneys from the Paul Weiss law firm take a look at the Second Circuit’s January 12, 2018 decision in Arkansas Teacher Retirement System v. Goldman Sachs Group, Inc. (here), in which the appellate court vacated the district court’s certification of a shareholder class in the securities class action lawsuit arising out of the investment company’s involvement in the creation and marketing of the infamous “built-to-fail” Abacus CDO. A version of this article previously appeared as a Paul Weiss law firm client memo. I would like to thank the authors for their willingness 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’ guest post.
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Reflections on GE’s Massive Run-Off Insurance-Related Charge
In his recent one-volume history of American capitalism, “Americana,” author Bhu Srivnivasan recounts the rise of many of the country’s large corporations in the late 19th century, including the long-standing U.S. industry stalwart, General Electric. GE was formed when Wall Street bankers engineered the merger of two fledgling electrical services providers, including the company formed by Thomas Edison, Edison Electric. The company has since grown to become a massive conglomerate and something of a mainstay of the U.S. commercial economy, in many ways a bellwether for the country’s economic health and a representative example of the country’s industrial might. More recently the company has gone through some high-profile struggles, drawing questions for the company’s management – and as discussed below, attracting securities class action litigation as well.
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New Tax Bill Bans Tax Deductibility of Confidential Sexual Misconduct Claims Settlements
At the start of the New Year, it has been interesting finding out more about the massive tax legislation that Congress enacted in December. It has been interesting to see the various impacts that the legislation is having on a variety of companies. It has also been interesting to learn more of the details about what Congress actually enacted. For example, here’s a detail about the tax bill that I didn’t previously know about – apparently the tax legislation includes a provision specifying that employers can no longer include as a deduction on their tax returns amounts the employers pay in settlement and defense of sexual misconduct claims, if the settlement is subject to a nondisclosure agreement.
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Guest Post: From Corwin to Dell: Implications for Investors and Corporate Acquirers
As discussed in a guest post on this site last week (here), on December 14, 2018 the Delaware Supreme Court published its opinion in Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd. (here). In the following guest post, Mark Lebovitch, Christopher J. Orrico and Alla Zayenchik of the Bernstein Litowitz Berger & Grossman LLP law firm provide their contrasting perspective on Dell and other recent Delaware decisions and of these decisions’ implications for investors and acquirers. I would like to thank the authors for their willingness to allow me to publish their article. 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.
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The Latest on Third-Party Litigation Financing
As I have previously noted (most recently here), third-party litigation financing is an increasingly important part of the litigation scene in the U.S. and around the world. In a series of articles in December, Law 360 took a comprehensive overview of litigation funding in the U.S. As discussed below, the Law 360 series provides an interesting perspective on an increasingly important part of the U.S. litigation environment.
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