In the wake of the U.S. Supreme Court’s March 24, 2015 opinion in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (here), there was a great deal of speculation about what the decision’s practical impact would be and how the case would be applied in the lower courts. On March 4, 2016, the Second Circuit issued an important opinion in Tongue v. Sanofi (here) interpreting and applying Omnicare. In the following guest post, the Paul Weiss law firm take a look at the Sanofi decision and discuss Second Circuit’s narrow interpretation and application of Omnicare, and the Second Circuit’s holding that issuers need not disclose information merely because it cuts against their opinions or projections. I would like to thank the attorneys from Paul Weiss for their willingness to publish their article as a guest post on this site. I welcome guest post submissions 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 Paul Weiss attorneys’ guest post.
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Massive $1.3 Billion Settlement of Fortis Investor Actions Under Dutch Collective Settlement Procedures
In what is by far the largest investor settlement ever under the Dutch collective settlement procedures, several shareholder foundations have reached an agreement to settle the Fortis shareholder claims for a total of €1.204 billion ($1.3 billion). The shareholder foundations’ settlement with Ageas, as Fortis is now known, relates to Fortis’s ill-fated October 2007 participation in the ABN AMRO acquisition just before the global financial crisis. Under a parallel settlement, €290 million ($313 million) of the shareholder settlement will be funded by Fortis’s D&O insurers. The shareholder settlement is subject to the approval of the Amsterdam Court of Appeals. This massive settlement undoubtedly will boost current initiatives by the shareholders of other companies – such as VW, Tesco, and Petrobras – to use the Dutch collective settlement procedures to secure collective investor relief.
A copy of Ageas’s March 14, 2016 press release about the shareholder settlement can be found here. Ageas’s March 14, 2016 press release about the insurance settlement can be found here. The website that Ageas has established for shareholders regarding the settlement can be found here.
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A Tale of Two Cities (Illustrated Edition)
The D&O Diary was on assignment in London last week for meetings, a conference, and a reception. The itinerary allowed for some time abroad in the city, and included a weekend stopover in Paris. The main event for the London visit was the annual C5 D&O Liability conference, in which I participated as a panelist. In the picture below, I am standing with my good friends and fellow panelists, Nilam Sharma, of Nilam Sharma Limited; Stephen Reilly of Beale & Company; and Chris Warrior of Hiscox.
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Guest Post: Fidelity Bonds and Cybercrime Policies: 2015 Year in Review
This past year was a very eventful one in the world of fidelity bond, commercial crime, and cybercrime coverages. In the following guest post, David Bergenfeld of the D’Amato & Lynch law firm’s Fidelity Bond Practice Group, and Laura Lang, Esq., take a look at the important developments during 2015 regarding these coverages. I would like to thank David and Laura for their willingness to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors of topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is David and Laura’s guest post.
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Reps and Warranties Insurance: When Do You Need It – and What About the Claims?
Insurance to protect against breaches of the representations and warranties provisions of mergers and acquisitions purchase agreements is an increasingly important part of many M&A transactions. Among other things, reps and warranties insurance can help facilitate the transaction by reducing the amount of the purchase price that must be set aside to provide the buyer with indemnification protection against breaches of the representations and warranties. As detailed in a March 2, 2016 Law 360 article entitled “A Buyer’s Guide to Reps and Warranties Insurance” (here, subscription required) by Wayne Bradley and Jonathan Picard of the Dentons law firm, there are certain situations in which representations and warranties insurance may be particularly appropriate. And as detailed in a recent study from a leading insurer, claims activity suggests that a significant number of transaction do run into trouble after the deal has closed, underscoring the need for this type of insurance.
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Guest Post: Apple Versus The FBI: Some Common Sense Reflections from “Cool Hand Luke”
Many of us have been following the continuing battle between Apple and the U.S. government on whether the government can required the company to unlock the iPhone of the San Bernardino terrorist, Syed Rizwan Farook, with a combination of confusion and concern. 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, sorts out the issues involved in the battle between Apple and the government, in light of all the circumstances, including the February 29, 2016 opinion by Eastern District of New York Judge James Orenstein in the separate Apple iPhone unlocking case. A version of this article originally appeared on CybersecurityDocket.com. I would like to thank John for his willingness 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 guest post.
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Field Notes on Recent Corporate Suit Filing Trends
As part of our beat here at The D&O Diary
, we regularly monitor new lawsuit filings and try to identify trends and patterns. Over the years, we have noted and commented on this blog about many of the trends and patterns we have identified. More than once we have noted the incidence of director and officer liability litigation arising out of environmental issues. We have also noted that D&O litigation often follows after the announcement of FCPA investigations. As discussed below, there has been a flurry of recent filings involving environmental issues. I have also noted below an interesting variant on the FCPA follow-on civil lawsuit pattern.
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Guest Post: Year in Review: Securities Litigation
This past year was an eventful one in the corporate and securities litigation arena, with the U.S. Supreme Court’s decision in the Omnicare case, important rulings in the lower courts applying the Supreme Court’s Halliburton II decision, and a host of other important decision on critical securities law issues. In the following memorandum from the Haynes and Boone law firm, attorneys from the firm’s Securities and Shareholder Litigation group take a look at the important securities litigation developments during 2015. I would like to thank the firm and the group for their willingness to publish their memorandum on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this site. Please contact me directly if you are interested in submitting a guest post. Here is the Haynes and Boone firm’s memorandum.
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Each year our Year in Review comments on significant securities-related decisions by the Supreme Court, federal appellate courts and district courts, notes key developments in SEC enforcement, and summarizes significant rulings in state law fiduciary litigation against directors and officers of public companies.
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A Closer Look at Buffett’s Annual Letter to Berkshire Shareholders
A highly anticipated event in the financial world each year is the release of legendary investor and Berkshire Hathaway Chairman Warren Buffett’s annual letter to the company’s shareholders. Market watchers and other observers value Buffett’s annual letter for its valuable insights about the financial marketplace, as well as for Buffett’s homespun humor and his wise insights about the economy and the world. In this year’s letter (here), which the company released on Saturday morning, Buffett had quite a bit to say about the current prospects of the American economy. Many of Buffett’s remarks about the U.S. economy were expressly intended to counter the relentlessly negative tone of the current U.S. Presidential election campaign. The letter also contains an interesting commentary about both the beneficial and disruptive effects resulting from gains in productivity; the commentary includes a cautionary note about the need to assist those disadvantaged by the rapid changes that often accompany technical innovations. The letter also contains a rather sobering assessment of the risks the world currently faces. (Full disclosure: I own BRK.B shares, though not nearly as many as I wish I did.)
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Securities Suit Frequency Means Challenging D&O Insurance Market for Life Sciences Companies
In 2015, as was the case for several years prior, companies in the life sciences sector experienced a disproportionately greater number of securities class action lawsuits than companies in other industries. As I detailed in my analysis of 2015 securities class action lawsuit filings (here), 39 of the 191 securities class action lawsuits filed in 2015 involved companies in the life sciences sector, representing about one in five of all securities suit filings during the year. No other sector experienced anywhere near this number of securities class action lawsuit flings. For example, the sector with the second-most number of filings, software companies, had eleven filings during 2015, representing about 6% of securities suit filings during the year.
There are a number of reasons why there are more securities suit filings involving life sciences companies, as discussed below. The frequency and severity of lawsuits against companies in the life sciences sector have important D&O Insurance implications as well, as also discussed below.
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