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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.

Although some cybersecurity incident-related securities lawsuits have proven to be successful for plaintiffs (refer, for example, here), many of these lawsuits have not gotten very far. The latest data breach-related securities lawsuit to hit the skids is suit filed last year against Zendesk. As discussed below, on November 9, 2020, Northern District of California Judge Charles Breyer granted the defendants’ motion to dismiss in the Zendesk lawsuit. A copy of Judge Breyer’s order can be found here.
Continue Reading Zendesk Data Breach-Related Securities Lawsuit Dismissed

Now that the Presidential election has been called for Joe Biden, it is time to start asking what a Biden Presidency may mean, including in particular what SEC enforcement and regulatory activity might look like under a Biden Administration. As discussed below, the likelihood is that we will see a more active SEC enforcement division and a shift back toward a more active regulatory approach.
Continue Reading What Does the Biden Victory Mean for the SEC?

If you have not yet seen SEC Commissioner Allison Herren Lee’s speech delivered last week to the PLI’s annual Institute on Securities Litigation, you should take a few minutes and read what she had to say. In her November 5, 2020 speech, which can be found here, Lee warns that climate change represents a “systemic risk” to markets, the financial system, and our economy. After noting that climate change presents an even greater risk of “grave human and economic costs” than we experienced in the pandemic — and urging that we should learn the lessons that the pandemic presents — she calls for a coordinated effort to create uniform climate change reporting and disclosure standards to ensure that investors and markets are better informed about the risks that climate change represents.
Continue Reading Climate Change as a “Systemic Risk”: Markets, Regulation, and Disclosure

In recent months, IPO activity has reached levels “not seen since the dot-com era,” according to a recent report on the IPO market. On November 3, 2020, the IPO Tracker reported that October was the busiest month for IPOs in 20 years. As discussed below, all this IPO activity may foretell the possibility of increased IPO-related securities litigation ahead.

According to the IPO Tracker, there were 85 IPOs completed in October 2020, which is “the busiest single month for IPOs in 20 years” – surpassing even September 2020’s totals, which had been the busiest month in that period.  The October surge brings the 2020 YTD total through year’s first ten months to 351 completed offerings, which surpasses “every yearly total since 2000.”
Continue Reading Does Increased IPO Activity Foreshadow Increased IPO-Related Securities Litigation Ahead?

Readers of this blog well know that in recent years there has been unprecedented levels of securities class action litigation activity, and that even in the midst of the current global health crisis plaintiffs’ lawyers have filed what one law firm has characterized as a “wave” of COVID-19-related securities litigation. The heightened pace of securities filings over the last several years has already triggered calls for another round of securities litigation reform. Now, organizations representing business interests have filed a petition with the SEC seeking to have the agency implement a number of reforms to protect businesses from “unjustified COVID-19 lawsuits.”
Continue Reading Petition to SEC Seeks Protection for Companies from Pandemic-Related Securities Suits

Fines and other recoveries in SEC enforcement action hit record levels during the agency’s fiscal year ended September 30, 2020, even as pandemic-related work closures dampened the number of enforcement actions the agency was able to file, according to the SEC Enforcement Division’s annual report released Monday. The SEC scored a record total of $4.6 billion in recoveries, largely as a result of big fines and disgorgements in a few large matters, while the 405 new standalone enforcement actions the agency filed was the lowest number in six years. The Enforcement Division’s annual report can be found here. The agency’s November 2, 2020 press release about the report can be found here.
Continue Reading Despite COVID-19 Disruptions, SEC Recoveries at Record Levels in FY 2020

Since the coronavirus outbreak emerged earlier this year, I have been tracking the COVID-19-related securities class action lawsuits and writing about each of the cases as they have come in. In an October 28, 2020 memo entitled “COVID-19: Lessons from the Second Wave of Securities Fraud Lawsuits” (here), the WilmerHale law firm takes a deeper look at the coronavirus-related securities litigation, with particular focus on the securities suits filed in the May to September 2020 time frame. Along the way, the memo identifies a number of securities lawsuits filed during that period as coronavirus-related that I had not included in my COVID-19 litigation tally. As discussed below, the memo makes several interesting points about the coronavirus-related securities suits. I also discuss below whether or not I agree that the additional cases that the law firm identified in the memo belong on the list of coronavirus-related cases.
Continue Reading Tallying and Analyzing COVID-19-Related Securities Suits

It was only this past June when the SEC made what was at the time the largest ever whistleblower award — $50 million – to a single individual. As it has turned out, that record stood for only a short time, as on October 22, 2020, the SEC shattered the prior record, paying out a whopping whistleblower bounty of $114 million to a single individual. The SEC’s award order is heavily redacted to protect the identity of the whistleblower so relatively is known about the circumstances surrounding the award, but even so the sheer size of the award makes a serious statement. The SEC’s October 22, 2020 award order can be found here. The SEC’s October 22, 20202 press release about the award can be found here.
Continue Reading SEC Awards Largest-Ever Whistleblower Bounty of $114 Million

Due to the financial fallout from the COVID-19 pandemic, the number of U.S. bankruptcy filings by companies with over $100 million in assets was 84 percent higher during the first three quarters of 2020 compared to the same period last year, according to a new report from Cornerstone Research. The report, entitled “Trends in Large Corporate Bankruptcy and Financial Distress: 2005-Q3 2020” (here), shows that the increase in the number of bankruptcies was particularly pronounced for “mega bankruptcies” (involving companies with over $1 billion in reported assets). However, the report also suggests that the number of bankruptcy filings by companies with over $100 million in assets may have peaked in July. Cornerstone Research’s October 28, 2020 press release about the report can be found here.
Continue Reading Cornerstone Research: Business Bankruptcies Up Significantly in Year’s First Nine Months