One of the more interesting developments in recent years has been the global rise of collective procedural mechanisms for aggrieved investors to seek redress from corporate parties for disclosure misrepresentations or omissions. In that vein, the recent revision of the securities laws of the People’s Republic of China are particularly interesting.

 

As discussed in a recent memo from AIG, presented in conjunction with the Shanghai-based JunHe law firm, the revised Chinese securities laws include among many other changes new provisions allowing for collective investor actions. According to the AIG memo, entitled “Securities Class Actions under the New Securities Law in China” (here), the revised law introduces “western-style class actions to China.” Continue Reading Chinese Securities Law Revision Introduces “Western-Style Securities Class Actions”

The opioid crisis is not anything new; it has been around for years. Indeed, more than three years ago I posted an item noting the outbreak at the time of a rash of opioid-related securities class action lawsuits. But while the opioid crisis has been around for years, plaintiff shareholders continue to file opioid-related securities suits. On January 20, 2021, a plaintiff shareholder filed a securities class action lawsuit against Walmart in the District of Delaware based on the U.S. Department of Justice’s December 2020 lawsuit against the company alleging a role in the opioid epidemic. A copy of the securities class action lawsuit complaint can be found here. Continue Reading Walmart Hit with Opioid-Related Securities Class Action Lawsuit

In the latest sign that coronavirus-related securities class action lawsuit filings will continue into the New Year, on January 20, 2021, a plaintiff shareholder filed a COVID-19-related securities suit against the Chinese Internet social media company Lizhi, Inc. The lawsuit relates to the coronavirus outbreak now more than a year ago in China, and to the company’s January 2020 U.S. IPO. A copy of the plaintiff’s complaint can be found here. Continue Reading Chinese Social Media Company Hit with Coronavirus-Related Securities Suit

One of the more noteworthy recent developments in corporate and securities litigation has been the resurgence of Delaware law “duty of oversight” claims, as I noted in my recent annual round-up of D&O liability issues. Delaware courts have sustained several of these kinds of “Caremark duty” claims, which until recently were distinctly disfavored – which raises the questions of why these claims are now proving viable, and whether the renewed risk of duty of oversight claims is here to stay? In a December 2020 paper entitled “A New Caremark Era: Causes and Consequences” (here), Professor Roy Shapira of IDC Herzliya Radzyner Law School identifies what he believes to be the causes of the recent revival of duty of oversights, and presents his view that the changes are here to stay. Professor Shapira’s views are summarized in a January 18, 2021 post (here) on the Harvard Law School Forum on Corporate Governance. Continue Reading A “New Era” of Caremark Claims?

Driven largely by several mega-settlements (that is, settlements of $100 million or greater), the aggregate value of global securities class action settlements in 2020 totaled 61% more than in 2019, according to a new report. The report, entitled “2020 Securities Related Settlements Exceed $5.8 Billion,” and published in a January 18, 2021 post on the Harvard Law School Forum on Corporate Governance, was written by Jeff Lubitz of ISS Securities Class Action Services. The report can be found here. Continue Reading Aggregate Securities Class Action Settlements Grew Substantially in 2020

In what is the first coronavirus-related securities class action lawsuit filed in 2021, and in what is also as far as I know the first coronavirus-related securities suit filed following the filing of an SEC enforcement action against the same company, a plaintiff shareholder has filed an action against diagnostic testing company Decision Diagnostics Corp., relating to the company’s claims during the period March to June 2020 that it had developed a finger-prick test that could detect COVID-19 in less than one minute. A copy of the plaintiff’s complaint can be found here. Continue Reading Diagnostic Testing Company Hit with First Coronavirus-Related Securities Suit of 2021

Suresh Ellawala

As many readers may have noted at the time, in December the SEC filed an enforcement action against Ripple Labs and two of its executives in connection with what the SEC described as the company’s unregistered offering of securities, relating to the company’s sale of digital asset units between 2013 and the time of the filing of the enforcement complaint. In the following guest post, Suresh Ellawala takes a closer look at the issues that the SEC’s enforcement action presents. Suresh is Head of Commercial Financial Lines at Price Forbes & Partners. I would like to thank Suresh 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 Suresh’s article. Continue Reading Guest Post: The Ripple Effect – Are Cryptocurrency Tokens Securities, and Why Does it Matter?

Nessim Mezrahi
Stephen Sigrist

In the following guest post, Nessim Mezrahi and Stephen Sigrist discuss their analysis of Rule 10b-5 private securities fraud litigation in 2019 and 2020 against U.S. Issuers, and the impact of recent guidance by the 2nd and 7th Circuits on Halliburton II stock price impact defenses at the class certification stage.  Mezrahi is cofounder and CEO and Sigrist is a data scientist at SAR.  SAR’s January 8, 2021 press release discussing a more detailed 4Q 2020 securities class action analysis can be found here. A version of this article previously was published on Law360. I would like to thank Nessim and Stephen 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 submit a guest post. Here is the authors’ article. Continue Reading Guest Post: Halliburton II Price Impact Defenses Can Limit Severity on Deficient Exchange Act Claims

Paul A. Ferrillo

As I noted in a prior post, the recent state-sponsored cyber incident carried out through an attack on SolarWinds has a number of important implications. As noted in the following guest post from Paul Ferrillo, the incident could also have important implications for the cyber insurance marketplace. Paul is a partner in the McDermott, Will & Emery law firm. I would like to thank Paul for allowing me to publish this 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 Paul’s article. Continue Reading Guest Post: SolarWinds – Einstein Failed Us, and the Cyber Insurance Markets will Feel the Squeeze