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

A federal district judge has denied the defendants’ motion to dismiss in a securities class action lawsuit arising out of an electric utility’s eight-year involvement in a domestic bribery scheme. The court’s ruling has several interesting features relating to the securities litigation exposures from domestic corruption. Northern District of Illinois Judge Virginia M. Kendall’s April 21, 2021 opinion in the Exelon Corporation securities suit can be found here. An April 28, 2021 memo about the ruling from the Shearman & Sterling law firm can be found here.
Continue Reading Dismissal Denied in Domestic Corruption-Related Securities Suit

Is the SEC staff about to issue guidelines specifying that the safe harbor for forward looking statements does not apply to SPAC merger transactions? An April 28, 2020 exclusive report on Reuters (here) says that the SEC is considering taking the step. If the agency were to issue guidance restricting the availability of the safe harbor for SPACs, it could significantly restrict SPAC’s use of target company projections in advance of de-SPAC mergers, and even further slow the already cooling SPAC market. The SEC’s possible action is discussed further in an April 29, 2021 post on the Cooley law firms PubCo blog, here.
Continue Reading Are SEC Guidelines on SPAC Projections Ahead?

Regular readers of this blog know that I have been following the developing SPAC-related litigation closely. Readers also know that the cast of defendants in these cases can be extensive, diverse, and in some cases overlapping. For example, the defendants may include former directors and officers of the SPAC; former directors and officers of the acquired company; and current directors and officers of the company formed by the merger. Some of the individuals named may be sued in more than one capacity. These features of the suits will complicate the litigation. These features will also complicate the application of insurance to the defense and settlement of this litigation, as well.

In an April 27, 2021 post on the Freshfields law firm blog entitled “Tower vs. Tower: Implications of SPAC Shareholder Litigation for the D&O Insurance World” (here), Freshfields partner Boris Feldman takes a look at these complications and “what a wave of SPAC shareholder suits may mean for the Directors and Officers Liability Insurance Industry.”
Continue Reading Will SPAC-Related Securities Suits Lead to “Tower vs. Tower” D&O Insurance Coverage Battles?

In the second dismissal motion ruling in one of the many board diversity lawsuits filed in recent months, a magistrate judge has granted the defendants’ dismissal motion in the suit against the board of clothing retailer The Gap. This latest ruling follows the dismissal motion grant last month in the similar lawsuit against Facebook’s board. As discussed below, the court’s dismissal of the case against The Gap’s board was based on the forum selection clause in the company’s bylaws. Northern District of California Magistrate Judge Sallie Kim’s April 27, 2021 ruling in the case can be found here.
Continue Reading Board Diversity Lawsuit Against The Gap Dismissed Based on Forum Clause

The number of SEC and PCAOB accounting and auditing enforcement actions decreased in 2020 relative to 2019, but monetary settlements increased year-over year, according to a recent report from Cornerstone Research. The report, entitled “Accounting and Auditing Enforcement Activity – 2020 Review and Analysis” (here), analyzes the agencies’ publicly disclosed accounting and auditing enforcement actions between 2015 and 2020. Cornerstone Research’s April 27, 2021 press release about the report can be found here.
Continue Reading Accounting and Auditing Enforcement Actions Down in 2020 While Total Settlements Increased

In what is a notable development in the emerging SPAC-related securities class action litigation scene, the parties to a SPAC-related securities suit involving the streaming media company Akazoo company have reached a partial settlement in the aggregate amount of $35 million. The deal is a partial settlement because claims remain pending against other defendants. As discussed below, the settlement has a number of interesting features. It is, in any event, a noteworthy data point for the discussion about SPAC-related litigation exposures.
Continue Reading Akazoo SPAC-Related Litigation Partially Settled for $35 Million

After more than a year of lockdowns, social distancing, and sheer disruptions of life, we are all more than ready to be done with the coronavirus outbreak and to move on. Unfortunately, the virus is not done with us yet. In places like Brazil and India, COVID-19 continues to exact a grim toll. Just as I, like all of the rest of you, had assumed in the early stages of the outbreak that we would be done with the coronavirus by now, I also thought we would be done with coronavirus-related litigation by now as well. However like COVID-19 itself, coronavirus-related litigation continues on despite our expectations. As discussed below, in the past week, two more coronavirus-related securities class action lawsuits were filed, as the pandemic-related litigation phenomenon continues.
Continue Reading COVID-19 Securities Suits Continue to Accumulate

Readers of this blog know that there have been several SPAC-related securities class action lawsuits filed in 2021, with the suits mostly coming in after the de-SPAC transaction has been completed. Even readers who think they get the idea already will want to be sure to take a look at the new SPAC-related lawsuit that came in earlier this week. What makes this one different is that, though the lawsuit names both the SPAC and the SPAC merger target company as defendants, the merger, though announced, has not yet even taken place. And, mind you, this is not your garden variety merger objection lawsuit, it is a full blown 10b-5 class action lawsuit. Interested? Read on.
Continue Reading SPAC and Target Company Hit with Pre-Merger 10b-5 Class Action Suit

John M. Orr

Though we are still early on in the Biden Administration’s tenure, it is already clear that ESG-related issues have emerged as a important point of focus and emphasis for the Administration. In the following guest post, John M. Orr, Directors & Officers Liability Product Leader for Willis Towers Watson,
takes a look at a number of the important implications of the Administration’s ESG focus. A version of this article previously appeared on the Willis Towers Watson website (here). I would like to thank John 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 John’s article.
Continue Reading Guest Post: Changes in ESG-Related D&O Risk in a New US Presidential Administration

In what is, according to the SEC itself, the second-largest whistleblower award in the history of the agency’s whistleblower program, the SEC has awarded two joint whistleblowers a bounty of over $50 million. The agency’s order making the award is heavily redacted, in order to protect the whistleblowers’ identities, so it is hard to tell very much about the circumstances surrounding the award. But the award is the latest in what has been a recent flurry of very large whistleblower awards by the agency. The SEC’s April 15, 2021 press release announcing the award can be found here. The April 15, 2021 award order can be found here.
Continue Reading SEC Awards Second-Largest Ever Whistleblower Bounty