It has been over ten years since the U.S. Supreme Court issued its landmark decision in Morrison v National Australia Bank – yet the lower courts continue to struggle with its application in specific situations. Morrison clarified that the U.S. securities laws apply to securities transactions on U.S. securities exchanges and to domestic transactions in other securities. It is Morrison’s second prong, relating to domestic transactions in other securities, that continues to vex the courts.

 

In a recent decision, the Second Circuit affirmed a district court’s dismissal of a securities lawsuit on the grounds that the underlying securities transaction, even if domestic, was so “predominantly foreign” as to be “impermissibly extraterritorial.” As discussed below, the Second Circuit’s decision underscores an ongoing question of how far beyond Morrison’s “domestic transaction” question courts should go in determining whether U.S. securities laws apply to a transaction. The Second Circuit’s January 25, 2021 decision in Cavello Bay Reinsurance Ltd v. Stein can be found here. Continue Reading Second Circuit Affirms Dismissal of Securities Suit Involving “Predominantly Foreign” Transaction

Long-time readers know that I have a particular interest in the SEC whistleblower program. I have been interested in it since it was first put into effect now almost ten years ago. One reason I was interested in it from the very outset is that I thought that a pattern might emerge in which whistleblowers submitted their reports to the SEC, the SEC launched an investigation or enforcement action, and then company shareholders filed related securities class action lawsuits based on the circumstances revealed in the whistleblower’s report.

 

By and large, the third step in this anticipated pattern has not emerged. As far as I am aware, there have not been private securities suits filed after SEC whistleblower reports triggered SEC investigation or enforcement actions – until now, that is. On January 28, 2021, a plaintiff shareholder filed a securities class action against Exxon Mobil relating to news reports that the SEC has launched an investigation of the company based on whistleblower reports questioning the company’s asset valuations of its Permian basin oil fields. A copy of the plaintiff’s complaint can be found here. Continue Reading Securities Suit Filed Against Exxon Mobil Based on SEC Whistleblower Allegations

In a recently recorded PLUS podcast, Willis Tower Watson’s Rob Yellen and I examine the potential impact of the new Presidential administration on the world of corporate directors’ and officers’ liability. Rob and I are joined in the podcast by John Fielding, who is Chubb’s Senior Vice President and General Counsel, Global Government and Industry Affairs. John’s comments provide a Washington insider’s look at what we might expect from the new administration and what to watch as the next few weeks and months unfold. The podcast can be found as a link in a January 29, 2021 post on the PLUS Blog, here. This podcast is the first in what is planned to be a three-part PLUS podcast series.

Federal court securities class action litigation filings against life sciences companies declined slightly in 2020 relative to 2019 but remained above long-term historical levels, and remained a significant portion of overall securities class action lawsuit filings during the year, according to a new report from the Dechert law firm. The January 28, 2021 report, entitled “Dechert Survey: Developments in Securities Fraud Class Actions Against Life Sciences Companies 2020 Edition,” can be found here. Continue Reading Securities Litigation Against Life Sciences Companies Remained Elevated in 2020

In what is the third coronavirus-related securities class action lawsuit filed so far in 2021, a plaintiff shareholder has filed a securities class action lawsuit against the U.K.-based biopharma firm AstraZeneca plc relating to the setbacks the company encountered late last year in connection with the company’s efforts to develop a COVID-19 vaccine. The complaint also relies heavily on the way that the company communicated to investors and the general public concerning anomalies in the vaccine’s interim clinical trial results. A copy of the January 26, 2021 complaint against the company can be found here. Continue Reading AstraZeneca Hit with Securities Suit Over COVID-19 Vaccine Development Setbacks

As I have noted on this site as the cases have accumulated (most recently here), since March 2020 plaintiffs’ lawyers’ have filed over two dozen coronavirus-related securities class action lawsuits. But even as the plaintiffs’ lawyers appeared eager to pursue these types of claims, the question has remained about how these lawsuits will fare. Now, in first dismissal motion ruling in a coronavirus-related securities suit, the court has granted the defendants’ motion to dismiss, in the coronavirus-related securities suit filed last July against Velocity Financial. A copy of Central District of California Judge Gary Klausner’s January 25, 2021 order can be found here. Continue Reading First Dismissal of Coronavirus-Related Securities Class Action Lawsuit

Federal court securities class action lawsuit filings declined 22% in 2020 compared to 2019, but the 2020 filings were still above the long-term historical average annual numbers of filings, according to NERA Economic Consulting’s annual securities litigation report. The 2020 securities suit filing drop-off reflected a decline in the number of federal court merger objection class action lawsuits filed during the year, offset in part by the number of coronavirus-related securities suits. NERA’s January 25, 2021 report can be found here. Continue Reading NERA: 2020 Securities Suit Filings Down vs. 2019, But Above Long-Term Levels

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