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Kevin LaCroix

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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.

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Earlier this week, the SEC announced that it had filed settled charges against four companies for alleged misleading disclosures concerning cybersecurity incidents at the companies. The charges against the companies arose out of the SEC’s investigation of companies potentially affected by the compromise of SolarWinds’ Orion software. One of the four companies was additionally charged with disclosure controls and procedures violations. Without admitting or denying the SEC’s charges, each company agreed to the entry of a cease-and-desist order against them. The companies agreed to pay civil penalties ranging from $4 million to $990,000. The SEC’s October 22, 2024, press release about the charges against the four companies can be found here.Continue Reading SEC Charges Four Companies for “Downplaying” Cyber Incidents

With the news broke within the last few weeks that months earlier the SEC had quietly disbanded its Climate and ESG task force, the agency took pains to emphasize that the winding up of the Task Force did not mean that the agency was no longer policing ESG-related issues. At least one recent development underscores the fact that the agency is continuing to monitor ESG concerns, particularly “greenwashing”-type concerns. Earlier this week, the agency initiated entered an agreed cease-and-desist order against investment adviser WisdomTree Asset Management, based on alleged misstatements and compliance failures relating to the firm’s execution of its ESG investment strategy. Among other things, the agency alleged that the firm’s funds invested in the investment classes it had said it would avoid.Continue Reading SEC Charges Investment Adviser With Failing to Adhere to Stated ESG Investment Criteria

In the following guest post, Syed S. Ahmad, Geoffrey B. Fehling and Evan J. Warshauer of Hunton Andrews Kurth LLP’s Insurance Coverage Group analyze a New York federal judge’s recent decision to grant an insured’s motion to transfer venue in a coverage matter, highlighting key considerations related to forum selection and related strategy. This article was originally published on October 4, 2024 online with Westlaw Today. Reproduced with permission from Thomson Reuters. Further duplication is prohibited.Continue Reading Guest Post: New York Federal Court Reinforces Importance of Forum Selection for Insurance Disputes

More than once I have had occasion to write about qui tam actions on this site, primarily in connection with the complicated insurance coverage questions the cases can present. Now, in unexpected and provocative ruling, a federal district court judge has held the False Claims Act’s qui tam provisions to be unconstitutional. While just the opinion of a single district court judge, and therefore without precedential effect outside of the federal district in which it was rendered, the ruling nonetheless is groundbreaking and potentially significant. The potential significance of this development is discussed below. A copy of Middle District of Florida Judge Katherine Kimball Mizelle’s September 30, 2024, opinion can be found here.Continue Reading Federal Court Holds False Claim Act’s Qui Tam Provisions Unconstitutional

For the last several years, securities class action lawsuits related to SPACs and de-SPACs have been a significant factor in the overall annual number of securities suit filings. SPAC-related suits remain a significant factor in the number of filings again this year, even though it has now been several years since the peak of the SPAC frenzy. In the latest example, on October 17, 2024, a plaintiff shareholder filed a securities suit against cannabis company WM Technology alleging that both prior to and following its predecessor company’s merger with a SPAC, the company misrepresented a key customer engagement metric. The new lawsuit has some interesting features, as discussed below. A copy of the complaint can be found here.Continue Reading Cannabis Company Hit With SPAC-Related Securities Suits

In what is one of the largest settlements in a breach of the duty of oversight lawsuit, the parties to the Walmart Opioid-Related Shareholder Derivative lawsuit have agreed to settle the case for $123 million. The settlement is also one of the largest-ever derivative lawsuit settlements. As discussed below, the Walmart settlement is the latest in a series of jumbo settlements in opioid-related breach of the duty of oversight claims. The settlement is subject to court approval. A copy of the parties’ October 13, 2024, Stipulation of Settlement can be found here.Continue Reading Walmart Opioid-Related Duty of Oversight Derivative Suit Settled for $123 Million

Among the most distinctive and important securities class action lawsuit filing trends this year has been the influx of new lawsuit based on alleged AI-related misrepresentations. In the latest example, on October 15, 2024, a plaintiff shareholder filed a securities class action lawsuit against China-based AI and robotics company, Xiao-I, in which the shareholder alleged financial reporting issues and also that the company overstated its AI capabilities. A copy of the October complaint against the company can be found here.Continue Reading China-Based Company Hit with AI-Related Securities Suit

Over the last several months, various SEC spokespeople, including SEC Chair Gary Gensler, have issued strong precautionary statements against so-called “AI-washing,” which Microsoft Co-Pilot, an AI-powered tool, defines as a “deceptive marketing tactic where a product or service is promoted by exaggerating or falsely claiming the use of artificial intelligence.” The SEC has even issued an advisory warning investors against exaggerated or fraudulent AI-related claims.  In several prior enforcement actions, the SEC has made it clear that it is prepared to pursue those whom it deems to have engaged in AI-washing.

In the latest example of the SEC’s AI-washing focused enforcement activity, late last week the SEC announced that it had entered settled charges against an investment advisor, its principals, and related entities, alleging that the parties engaged in misrepresentations concerning the firms’ alleged used of AI to perform automated trading in clients’ accounts. The SEC’s October 10, 2024, press release regarding the action against Rimar Capital USA and related entities and individuals can be found here. The SEC’s October 10, 2024, administrative order in the matter can be found here.Continue Reading Investment Advisory Firm Hit with AI-Washing SEC Enforcement Action

Michael W. Peregrine

On Monday, the National Association of Corporate Directors released a Blue Ribbon Commission Report providing substantive guidance for corporate directors on board oversight of artificial intelligence. In the following guest post, Michael W. Peregrine, a partner at the McDermott Will & Emery law firm, reviews the Blue Ribbon Commission report and summarizes…