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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, securities class action lawsuits were filed against the recently failed U.S. banks, Silicon Valley Bank and Signature Bank. The turmoil that surrounded those banks’ failure sent ripples into the global banking industry; one of the institutions particularly affected by the ensuing turbulence was the European banking giant, Credit Suisse. After a series of events at the bank earlier this week (described below), the company’s share price tanked, the Swiss banking regulator extended the bank a financial lifeline – and the bank was hit with a securities class action lawsuit, the third this week involving a bank caught up in the sudden wave of banking industry disorder. The new lawsuit filed on March 16, 2023, against Credit Suisse can be found here.Continue Reading Now It’s Credit Suisse’s Turn: Swiss Bank Hit with Securities Suit

On March 9, 2023, the SEC announced that it had settled charges that data management software company Blackbaud, Inc. had settled charges that the company’s cybersecurity disclosure policies and procedures violated the agency’s public company disclosure reporting requirements and that the company had made misleading disclosures about a 2020 ransomware attack that impacted more that 13,000 of its customers. The company, which neither admitted or denied the charges, agreed to a cease-and-desist order and to pay a $3 million penalty. The action, which follows a similar proceeding involving cybersecurity disclosures and procedures, highlights the agency’s focus on cybersecurity-related disclosures.Continue Reading SEC Charges Company Over Disclosures Concerning Ransomware Attack

By Monday morning of this week, two banks had failed in quick sequence, including the very high-profile collapse last week of Silicon Valley Bank (SVB) and the closure over the weekend of Signature Bank. SVB got hit with a securities class action lawsuit yesterday, so what had to happen next? Why, a securities suit against Signature Bank, of course. On Tuesday morning, the same plaintiffs’ law firm that sued SVB on Monday filed a separate securities class action lawsuit against Signature Bank and three of its executives. How much further any of this goes from here is the question on everyone’s minds. A copy of the Signature Bank complaint can be found here.Continue Reading SVB Got Sued, So, What Next? A Suit Against Signature Bank, Of Course

In my post yesterday discussing the implications of Silicon Valley Bank’s failure, I discussed the likelihood that D&O claims could arise in the wake of the failure. It has not taken long for this possibility to materialize. In morning (west coast time) on Monday, March 13, 2023, a plaintiff shareholder filed a securities class action lawsuit against SVB’s parent holding company and two of its executives. As discussed below, this lawsuit is likely just the first of what undoubtedly will be many D&O lawsuits against the company and its executives. A copy of the new complaint can be found here.Continue Reading Well, That Didn’t Take Long: SVB’s Holdco and Execs Hit with Securities Suit

In a development that has an all-too-familiar feel, on Friday March 10, 2023, banking regulators closed California-based Silicon Valley Bank (SVB), in what is the second-largest banking failure in U.S. history. The closure of the country’s 16th largest bank has sent shivers through the financial sector, raising questions about other lending institutions. For those of us in the D&O insurance industry, the bank’s closure also raises unpleasant memories about past failed bank D&O claims. As discussed below, the sequence of events at SVB shows how rising interest rates represent a significant threat that could contribute to a combination of circumstances that might well lead to D&O claims. A copy of the FDIC’s March 10, 2023, press release announcing the bank’s closure and the agency’s appointment as the bank’s receiver can be found here.Continue Reading What Does the Failure of Silicon Valley Bank Mean?

As I have noted in prior posts (most recently here), many of the SPACs that completed IPOs during the SPAC frenzy in 2020 and 2021 are nearing the end of their two-year search period. Many of these SPACs have not identified suitable merger partners and the SPACs are liquidating. One question I have been asking as these SPACs liquidate is whether there might be litigation. One the one hand, in the liquidation, the investors get their money back. On the other hand, in our litigious society litigation is always possible when plans don’t work out. In the latest example of how litigation might arise in the SPAC liquidation context, investors in SPAC which has announced its plan to liquidate have brought an action against the SPAC, its directors and officers, and the SPAC sponsor, in a fight about how assets the SPAC holds beyond the IPO trust funds are to be distributed.Continue Reading Liquidating SPAC Hit With Investor Suit Over Planned Asset Distribution

The total number of securities class action lawsuit settlements reached the highest level in 15 years in 2022, and median, average, and aggregate settlement amounts also rose significantly in 2022 compared to the year prior, according a recently published annual report from Cornerstone Research. The report, entitled “Securities Class Action Settlements: 2022 Review and Analysis,” analyzes the 105 securities class action lawsuit settlements finalized in 2022 and compares them statistically with prior years’ settlements. The report can be found here. Cornerstone Research’s March 8, 2023, press release about the report can be found here.Continue Reading Cornerstone Research: Securities Suit Settlements at High Levels in 2022

In the latest development in the Delaware courts’ evolving elucidation of the standards surrounding claims for breach of the duty of oversight – sometimes referred to as Caremark claims — a Delaware Court has held that the board of McDonald’s cannot be held liable for an alleged oversight duty breach in connection with the alleged scandals at the company involving sexual harassment allegations. This ruling in the directors’ favor follows closely after the same court’s recent ruling in the same case that the plaintiffs had stated a claim against an officer defendant for breach of the duty of oversight. The court’s recent rulings in the case provide extensive additional insights with respect to what must be alleged to establish a Caremark claim. Vice Chancellor Laster’s March 1, 2023, opinion in the case, dismissing the claims against the McDonald’s directors, can be found here.Continue Reading Breach of Duty of Oversight Claims Against McDonald’s Directors Dismissed

Sarah Abrams

All of us in advisory roles in the professional liability insurance space are constantly trying to identify emerging risks and trends that could affect the liability environment. Among the many forces and factors that could affect the risk landscape is demographic change. In the following guest post, Sarah Abrams, Head of Professional Liability Claims at Bowhead Specialty, takes a look at the demographic changes that lie ahead and discusses what the changes could mean for the risk environment for investment advisors. A version of this article previously was published on the PLUS Blog. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: Baby Boomers’ Impact on Financial Lines Insurers of Investment Advisers

You can hardly turn on any of your various devices these days without encountering yet another hyperventilating article or program about ChatGPT or, more generally, about artificial intelligence (AI) chat bots. Time magazine recently ran a cover story about ChatGPT and the AI chat bot race. As if that were not enough to signal that ChatGPT has arrived as the social phenomenon du jour, the Wall Street Journal recently ran a long self-consciously serious op-ed column in which Henry Kissinger and two other public intellectuals called ChatGPT “a new technology [that] bids to transform the human cognitive process.” Wow! OK, then.

Despite these and many other recent signs and signals of impending doom, I was fully prepared to ignore ChatGPT and carry on with my life – that is, until one of my colleagues recently asked me whether, given that advent of ChatGPT, my days as a blogger are about to come to an end? The question, in its simplest form, is whether I am about to be replaced by a machine. If you listen to the current ChatGPT hype, it may be a question that all of us need to be asking ourselves.Continue Reading Are We All About to be Replaced by AI Chat Bots?