An Australian Federal Court class action lawsuit alleging that the Australian Federal Government failed to disclose to investors the climate change risks associated with the government’s sovereign bonds has survived in part an attempt by the government to have the action dismissed. In an October 8, 2021 Judgment (here), a Federal Court of Australia Judge “declined to strike-out” the applicant’s claim based on allegations of misleading or deceptive conduct, while agreeing with the government to “strike-out” others of the applicant’s claims, as discussed below. The court’s rulings in this case arguably represent something of a milestone in the development of climate change-related litigation. Continue Reading Australian Bond Climate Change-Related Disclosure Class Action to Proceed

Jeffrey Lubitz

In the following guest post, Jeffrey Lubitz, Executive Director of ISS Securities Class Action Services, reflects on the 20th anniversary of the Enron scandal and considers the meaning of Enron for institutional investors. A version of this article was also published on the ISS Securities Class Action Services website. I would like to thank Jeff for allowing me to publish his article as a guest post 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 Jeff’s article. Continue Reading Guest Post: 20 Years Later: Why the Enron Scandal Still Matters to Investors

In the latest SPAC-related securities class action lawsuit filing, a plaintiff shareholder has filed a securities class action suit against electric vehicle company Lightning eMotors and certain of its directors and officers, after the company disappointed investors in its first post-SPAC-merger financial release. As discussed below, the Lightning eMotors SPAC-merger transaction was already the subject of a separate, prior Delaware Chancery Court action. A copy of the new federal court securities class action lawsuit complaint can be found here. Continue Reading Electric Vehicle Company Hit with Post-SPAC-Merger Securities Suit

The standard view of the Biden Administration SEC under the leadership of Gary Gensler is that the agency will take a more active enforcement approach than was the case during the prior administration. Two developments in the past few days certainly support this standard view. First, in a speech last week, new SEC Enforcement Division Director Gurbir Grewal indicated that the agency will be requiring admissions of wrongdoing in some enforcement settlements. Second, in a statement the next day, SEC Chair Gensler announced that the agency would revitalize the rulemaking process with respect to rules regarding clawbacks of erroneously awarded compensation. As discussed below, these moves evidence a more aggressive approach to the enforcement of the securities laws. The text of Grewal’s October 13, 2021 speech can be found here. Gensler’s October 14, 2021 statement about the compensation clawback rules can be found here. Continue Reading SEC Moves on Admissions and Compensation Clawbacks Underscore Tougher Enforcement Approach

As readers will recall, in August, the U.S. Chamber of Commerce Institute for Legal Reform (ILR) issued a paper entitled “Courting Confusion: Federal Securities Class Actions Don’t Belong in State Courts,” in which the ILR called for Congress to require that all ’33 Act claims must be brought in federal court and authorize the removal to federal court of ’33 Act liability actions filed in state court, as discussed here. Earlier this month, I recorded an ILR podcast with Andrew Pincus, a partner at the Mayer Brown law firm and the author of the ILR paper, in which Andy and I discuss the Cyan problem; the concerns surrounding federal court securities litigation in state courts; and possible avenues for reform. The podcast, posted on the ILR website on October 12, 2021, can be found here.

Larry Fine

As I noted in a recent post, there recently has been an increase in excessive fee litigation against plan fiduciaries. In the following guest post, Larry Fine takes a look at recent developments in excessive fee litigation, and the implications for the fiduciary liability insurance industry. Larry is the Management Liability Coverage Leader at Willis Towers Watson. I would like to thank Larry for allowing me to publish his article as a guest post 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 Larry’s article. Continue Reading Guest Post: Excessive Fees, Excessive Fiduciary Litigation: A Balanced Look

Rachel Soich

As I have noted in prior posts on this site, cybersecurity issues can lead to D&O claims. In the following guest post, Rachel Soich, FCAS, MAAA. Consulting Actuary at Milliman, considers steps that companies can take to avoid cyber-related D&O costs. A prior version of this article previously was published in Milliman Insight. I would like to thank Rachel 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Rachel’s article. Continue Reading Guest Post: Three Ways to Avoid Cyber-Related D&O Costs

In one of the largest shareholder derivative lawsuit settlements ever, involving a very unusual derivative claim under Cayman Island law prosecuted in a U.S. court on behalf of a China-based Cayman Islands company, the parties to the Renren derivative litigation have agreed to settle the case for at least $300 million. The settlement is subject to a “true up” process that could increase the ultimate amount of the settlement payments. The settlement is also subject to court approval. The parties’ October 7, 2021 settlement stipulation can be found here. Renren’s October 8, 2021 press release about the settlement can be found here. An October 8, 2021 press release from the lead plaintiff’s counsel about the settlement can be found here. Continue Reading N.Y. Derivative Suit Against China-Based Cayman Islands Company Settles for $300 Million

For a time in the late 18th century, a group of men met weekly in a London pub for dinner and conversation. In and of itself, this may seem unremarkable. What is remarkable is that the group included among its members some of the most extraordinary individuals of the age – or indeed, of any age. The group included Samuel Johnson, James Boswell, Edmund Burke, Edward Gibbon, and Adam Smith; arguably, the greatest British critic, biographer, political philosopher, historian, and economist of all time. Others in the group included others equally famous at the time, including the painter Joshua Reynolds, the playwrights Richard Sheridan and Oliver Goldsmith, and David Garrick, the greatest actor of the century. The group called itself The Literary Club, but it came to be known simply as The Club. Harvard University Literature Professor Leo Damrosch tells the group’s fascinating story in his excellent and entertaining book, The Club: Johnson, Boswell, and the Friends Who Shaped an Age. Continue Reading Sunday Arts: The Club

Last month, when the Delaware Court of Chancery sustained the breach of the duty of oversight claim against the Boeing board, some observers suggested we could see an increase in board oversight breach lawsuits. We may yet see more breach of the duty of oversight claims, but another more recent Delaware Chancery Court decision in the Marriott data breach shareholder derivative suit suggests claimants still face an uphill battle in asserting these kinds of claims. On October 5, 2021, Delaware Vice Chancellor Lori Will granted the defendants’ motion to dismiss in the case, in part on grounds related to the plaintiff’s breach of the duty of oversight claims. As discussed below, the ruling could have particular significance with respect to the prospects for claims of breach of the duty of oversight relating to cybersecurity issues. A copy of Vice Chancellor Will’s opinion can be found here. Continue Reading Cybersecurity-Related Oversight Duty Breach Claim Against Marriott Board Dismissed