Photo of Kevin LaCroix

Kevin LaCroix

Subscribe to Kevin LaCroix's Posts

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.

Follow:Read more about Kevin LaCroixKevin's Linkedin ProfileKevin's Twitter Profile

It is now well-recognized, as Bloomberg columnist Matt Levine has famously said, that “Everything Everywhere is securities fraud.” Just the same, it does come as a surprise sometimes to see the things that make their way into securities class action lawsuit complaints. In the latest example of this phenomenon at work, a plaintiff shareholder has filed a securities class action lawsuit against the restaurant company Chipotle Mexican Grill, as a result of a social media campaign raising questions about the chain’s meal portions. To combat the social media chatter, the company concentrated on providing generous portions, which cut into the company’s margins – and drew a securities lawsuit. A copy of the November 11, 2024, complaint in the suit can be found here.Continue Reading Social Media Squabble Over Restaurant Portions Begets Securities Suit

When it became public a few weeks ago that the SEC had disbanded its Climate and ESG Task Force, the SEC emphasized that it was not taking its eye off of ESG-related issues. In the latest example of the SEC’s continuing ESG-related monitoring, late last week the ESG announced that it had settled charges against investment adviser Invesco Advisers. The agency alleged that the company had made misleading statements about the percentage of company-wide assets under management that integrated ESG factors in investment decisions. In settling the charges, the company agreed to pay a $17.5 million civil penalty. The SEC’s November 8, 2024, press release about the charges and the settlement can be found here. The SEC’s November 8, 2024, cease-and-desist order in the matter can be found here.Continue Reading SEC Charges Investment Adviser With ESG-Related Misleading Statements

Some of you may have heard: there was a Presidential election in the United States last Tuesday, as a result of which there will be a change in administration next January. This upcoming change almost certainly means a categorical shift in the regulatory environment in Washington, including in particular at the SEC. Many of the SEC’s regulatory initiatives under the Biden administration may be rolled back. In particular, the new administration likely will pull the plug on the SEC’s pending climate change disclosure guidelines. These likely developments at the federal level may mean that, as Cydney Posner noted in a November 7, 2024, post on the Cooley law firm’s PubCo blog (here), State level actions “may, in many ways, take on much larger significance.”

For that reason, it is worth taking a closer look at the ruling last week in the federal court lawsuit in which various business groups led by the U.S. Chamber of Commerce are challenging the California statutes requiring companies “doing business” in the state to make certain climate change-related disclosures. As discussed below, the Court has denied the plaintiffs’ pre-discovery motion for summary judgment on First Amendment grounds. The court’s interesting ruling may provide some indication of the future direction of the litigation, as well as on the likelihood that the California statutes will eventually compel companies to make the mandated disclosures. A copy of the Central District of California’s November 5, 2024, order can be found here.Continue Reading What Now for Climate Change Disclosure Requirements?

Short sellers have a complicated relationship to securities class action litigation, as several prior posts on this site have noted (most recently here). Among the more unusual roles short sellers can play in a securities suit is to serve as lead plaintiff. One recent high-profile case where a short seller acted as lead plaintiff is the suit filed against Overstock, its founder and former CEO, Patrick Byrne, and other executives. The short seller alleged, with some plausibility, that Overstock and Byrne had attempted to mount a “short squeeze” targeted at the short sellers. The district court granted the defendants’ motion to dismiss, and in an interesting October 15, 2024, opinion, the Tenth Circuit affirmed the district court. The appellate court’s opinion has several interesting features, as discussed below.Continue Reading Tenth Circuit Affirms Dismissal of Short Seller’s Securities Suit Against Overstock

In the wake of the SPAC frenzy, which peaked in 2021, investors have filed a significant number of SPAC-related lawsuits, including not only securities class action lawsuits, but also including Delaware direct action breach of fiduciary duty suits. The Delaware actions have so far in at least some cases proven to be successful. More recently, however, the Delaware courts have projected impatience and even fatigue with these kinds of suits, and in at least one recent case, granted the defendants’ motion to dismiss. However, in a more recent case, the Delaware Chancery Court, although noting that the plaintiff’s allegations are “not strong” and “close to the line between an adequate and an inadequate claim,” denied the defendants’ dismissal motion. There are several interesting features to court’s opinion, as discussed below. The Delaware Chancery Court’s October 18, 2024, opinion can be found here.Continue Reading Del. Court Denies Dismissal Motion in SPAC-Related Action

A Dutch court has entered a significant ruling in one of the long-running efforts by Petrobras investors to recover damages following the company’s bribery scandal. The Petrobras U.S. securities class action lawsuit settled in 2018 for $3 billion. Investors who purchased their Petrobras shares outside the U.S. were not part of that settlement, and these investors have pursued claims elsewhere, including in the Netherlands, where an action filed by a Foundation acting on behalf of a group of investors is pending. In a ruling last week, the District Court of Rotterdam rejected the Foundation’s claims under Brazilian and Argentinian law. The Court also ruled on bondholders’ claims under Luxembourg and Dutch law, as discussed below. The court’s judgment is subject to appeal. Petrobras’s October 30, 2024, filing with the SEC on Form 6-K describing the court’s judgment can be found here.Continue Reading Court Rules on Petrobras Investors’ Claims in Dutch Collective Action

Long-time readers know that the significant amount of SPAC activity in past years led to a surge in SPAC-related litigation. Some of this litigation has taken the form of traditional securities class action lawsuits. However, among the more noteworthy developments in the rise of SPAC-related litigation has been the emergence of a separate type of suit, the Delaware direct action breach of fiduciary class action lawsuit, sometimes referred to a MultiPlan claim in reference to the first suit of the type to be filed. As detailed below, these kinds of lawsuits have gone through a relatively swift evolution. Many of the these kinds of cases remain pending, have not yet reached the settlement stage. However, the GeneDX lawsuit, which is one of these kinds of cases, recently settled for $21 million, subject to court approval. There are a number of interesting aspects of this settlement, as discussed below. The parties settlement stipulation in the case can be found here.Continue Reading Delaware SPAC-Related Direct Action Breach of Fiduciary Duty Suit Settles for $21 Million

Many private company D&O insurance policies have a so-called antitrust exclusions that precludes coverage for claims alleging violations of the antitrust laws. However, these exclusions are written broadly and often seek to preclude a wide range of kinds of claims, beyond just claims alleging violations of the antitrust laws. A recent case from the Eastern…

Chinese e-commerce company Alibaba, whose American Depository Shares (ADS) trade on the NYSE, has agreed to settle a long-running securities class action lawsuit in which the company was alleged to have misrepresented its exclusivity practices and certain aspects of the planned but withdrawn IPO of its financial affiliate, Ant Group. The company has agreed to pay $433.5 million to settle the lawsuit. The settlement is subject to court approval. As discussed below, this settlement has several interesting features.Continue Reading Alibaba Settles Securities Suit Over Exclusivity Practices and Ant Group’s Scuttled IPO for $433.5 Million

Standard D&O insurance policies typically include an exclusion precluding coverage for claims brought by one insured against another insured. This exclusion also typically has a carve-back to the exclusion preserving coverage claims brought by bankruptcy officials, such as a trustee or received. One recurring question is whether or not a claim brought against an insured person by the company acting as debtor-in-possession is precluded by the exclusion, or whether the bankruptcy carve-back preserves coverage for the claim.

In an interesting October 3, 2024, decision, a bankruptcy court judge presiding over the Chapter 11 bankruptcy of Walker County Hospital Corporation, and applying Texas law, held that a claim by the Hospital acting as debtor-in-possession against the Hospital’s former CEO fell within the bankruptcy carve-back, and therefore that the insured vs. insured exclusion did not preclude coverage. The court’s analysis of this recurring question is interesting, as discussed below. A copy of the bankruptcy court’s October 3, 2024, opinion can be found here.Continue Reading Insured vs. Insured Exclusion Does Not Bar Coverage for Debtor-in-Possession’s Suit Against Former CEO