According to the latest annual report from ISS Securities Class Action Services, there were four securities class action settlements in 2020 that were large enough to make the firm’s list of the Top 100 U.S. Securities Class Action settlements. These four settlements took place in a year in which there were a total of 99 approved monetary securities class action settlements totaling $3.26 billion The details of the settlements included the four largest can be found in the ISS SCAS report entitled “The Top 100 U.S. Class Action Settlements of All-Time,” here. Continue Reading ISS Releases 2020 Top 100 Securities Class Action Lawsuit Settlements List

Regular readers know that I have been tracking new securities class action lawsuits filed related to SPACs and SPAC transactions. In the latest of these suits — a securities class action lawsuit filed against a company that was acquired by a SPAC in September 2020 — a plaintiff shareholder has filed a securities suit against the company relating to post-transaction board actions taken against senior company officials. The complaint in the securities class action lawsuit filed on March 2, 2021 against Velodyne Lydar, Inc. can be found here. Also, please note the further discussion below relating to yet another recent SPAC-related securities lawsuit, as well. Continue Reading Electric Car Technology Company Hit with Post-deSPAC Securities Lawsuit

President Biden’s nominee to head the SEC, Gary Gensler, faced a grilling today before the U.S Senate banking committee as his nomination  proceeds through Congress. Although the outcome of his nomination technically remains uncertain, his eventual confirmation seems likely. With that possibility in mind, it seems timely to look ahead at some of the issues the agency may address and initiatives the agency may advance under the new administration.  As it is, because of some initiatives that already underway, it is possible to project where we might be headed, at least to a certain extent. Continue Reading What’s Ahead at the SEC?

In the following guest post, Tristan Hall, Andrew Milne, and Emma Boulding of the CMS Cameron McKenna Nabarro Olswang LLP law firm take a look at the new UK Pension Schemes Act, and in particular review the Act’s liability provisions and D&O insurance implications. I would like to thank the authors for allowing me to publish their 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 publish a guest post. Here is the authors’ article. Continue Reading Guest Post: New Pensions Risks for UK Directors

As I noted in a recent post (here), a recurring public company D&O insurance coverage issue is whether a claim in which a company is involved qualifies as a “Securities Claim.” This question matters because D&O insurance provides coverage for the corporate entity (as opposed to the insured directors and officers) only for “Securities Claims” as that term is defined in the policy. In a recent decision, a Delaware Superior Court judge concluded that a bankruptcy trustee’s fraudulent transfer claim against Verizon Communications and related entities came within the applicable D&O insurance policy definition of “Securities Claim.” The coverage dispute illustrates the intricate issues that can arise in determining whether a claim qualifies as a “Securities Claim.” A copy of the Court’s February 23, 2021 Opinion can be found here. Continue Reading D&O Insurance: Bankruptcy Trustee’s Fraudulent Transfer Claim is a “Securities Claim”

Regular readers know that I have been documenting on this blog the recent rise in securities class action lawsuit filings relating to SPAC entities and transactions (most recently here). Along the way, I have suggested that given the sheer amount of SPAC IPO activity during 2020 and 2021, the volume of this type of litigation is likely to increase. The latest evidence supporting this possibility is the securities class action lawsuit filed on February 24, 2021 against MultiPlan Corporation, a health services company that in October 2020 merged into a SPAC. As discussed below, this latest lawsuit has several features that could be recur in future SPAC-related securities lawsuits. A copy of the February 24, 2021 complaint against MultiPlan and other defendants can be found here. Continue Reading Insurance Services Firm, SPAC Sponsor, and SPAC Execs Hit with Post-deSPAC Securities Suit

Coverage for the corporate entity under public company D&O insurance policies is limited to claims that constitute “Securities Claims” as that term is defined in the policy. A coverage dispute between Calamos Asset Management and its D&O insurer involved the question of whether an underlying breach of fiduciary duty claims alleged in connection with the company’s take-private tender offer meet the policy’s “Securities Claim” definition.

 

In a February 19, 2021 opinion (here), District of Delaware Judge Maryellen Noreika, applying Delaware law, ruled that the breach of fiduciary duty claims do not fall with the policy’s definition of “Securities Claim” and granted summary judgment for the insurer, largely in reliance on the Delaware Supreme Court’s 2019 decision in the Verizon case, notwithstanding the fact that the definition of the term “Securities Claim” in the Calamos dispute express referred to the “common law,” while the definition in the Verizon dispute did not. Continue Reading Breach of Fiduciary Duty Claim Not a “Securities Claim” Under D&O Policy

One of the recurring D&O insurance issues is whether an insurer seeking to deny coverage for a claim based on the insured’s late provision of notice must show that the late notice prejudiced the insurer. In the following guest post, Peter Selvin, the chair of the Insurance Coverage and Recovery Department at Ervin Cohen & Jessup LLP, takes a look at a recent federal district court ruling that supports policyholder’s arguments that the notice-prejudice rule applies under certain circumstances. A version of this article previously was published in the LA Daily Journal. I would like to thank Peter for allowing me 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 Peter’s article. Continue Reading Guest Post: New Decision on Late Notice

Most D&O insurance policies specify that the insurer’s advance written consent is required for claim settlement, such consent not to be unreasonably withheld. A frequent insurance coverage battleground issue is whether an insurer’s decision to withhold consent is or is not unreasonable. In the long-running insurance coverage dispute between for-profit education firm Apollo Education Group and its D&O insurer, Apollo contends that the insurer’s refusal to consent to Apollo’s $13.125 settlement of an options backdating-related securities suit was unreasonable. The coverage dispute eventually made its way to the Ninth Circuit, which certified a question of law to the Arizona Supreme Court on the question of the standard of law to be applied to the consent to settlement provision.

 

In an interesting February 17, 2021 split decision that could have important implications, the Arizona Court held that the objective reasonableness of the insurer’s decision to withhold consent is to be assessed from the perspective of the insurer, not that of the insured. A copy of the Arizona Supreme Court’s opinion can be found here. Continue Reading Arizona Sup. Ct.: Reasonableness of Insurer’s Refusal to Consent to Settle Determined from Insurer’s Perspective

In the latest SPAC-related securities class action lawsuit, a plaintiff shareholder has filed a securities class action lawsuit against a post-SPAC-acquisition biopharma company in which the plaintiff claims that the risk of the company’s post-merger clinical trial setback should have been unearthed in the pre-merger due diligence process. As discussed below, this lawsuit may prefigure some of the likely patterns for future SPAC-related securities litigation. Continue Reading Post-SPAC Acquired Biopharma Firm Hit with Securities Suit