Bill Boeck

Ransomware attacks are on the increase, putting the target organizations in the uncomfortable position of having to decide whether or not to pay the demanded ransom. As if that were not tough enough, an October 1, 2020 advisory statement by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) warns that companies paying ransoms under these circumstances may risk violating OFAC regulations and could be subject to penalties. In the following guest post, Bill Boeck takes a look at the OFAC advisory and its implications.  Bill is Lockton’s Global Cyber Product and Claims leader and U.S. Financial Lines Claims Practice Leader. A version of this article previously was published as a Lockton client alert. I would like to thank Bill 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 Bill’s article. Continue Reading Guest Post: OFAC Warns Against Paying Cyber Ransoms to Sanctioned Entities

I know from conversations with D&O insurance professionals outside the United States that they find it somewhere between astounding and incomprehensible that a company whose unsponsored level 1 ADRs trade over-the-counter in the U.S. can be subject to a U.S. securities lawsuit – but, as discussed in prior posts (here and here), that is what the Ninth Circuit and District Court held in the Toshiba securities lawsuit. However, a recent ruling in a securities suit involving global mining company Glencore plc suggests a means by which non-U.S. companies with unsponsored Level I ADRs in the U.S. nevertheless may still be able to avoid litigation in the U.S. In a July 31, 2020 ruling, District of New Jersey Judge Susan Wigenton granted the company’s motion to dismiss ADR investors’ securities suit against the company on forum non conveniens grounds. Continue Reading Unsponsored ADR Investors’ Securities Suit Dismissed on Forum Non Conveniens Grounds

John Reed Stark

Along with all of the other anxieties about the upcoming Presidential election, there is the concern that someone, somewhere will use some type of cyberattack to interfere with the electoral process. If that were to happen, the immediate question will “Who did it?” In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, underscores the difficulties associated with identifying the actors behind any cyberattack and cautions against jumping to conclusions about who might have been involved. A version of this article previously was published on Cybersecurity Docket. I would like to thank John 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 John’s article. Continue Reading Guest Post: Attribution on Election Cyber-Attacks: Don’t Rush to Judgment

In 2018, California passed a law mandating gender diversity on the boards of directors of companies headquartered in California. The legislation known as SB 826 served as the model for the separate board racial diversity legislation that California Governor Gavin Newsom signed into law at the end of September. The California Partners Project, a group co-founded by California First Lady Jennifer Siebel Newsom, recently published its first progress report on the growth in women’s representation on corporate boards for publicly traded companies headquartered in California since the enactment of SB 826. As the report shows, there has been a significant increase in the number of women on the boards of California headquartered companies. A copy of the report can be found here. An October 15, 2020 post on the Cooley law firm’s PubCo blog about the report can be found here. Continue Reading Progress Report on California Public Company Board Gender Diversity Requirements

Two of the biggest corporate scandals this year involved German payments company Wirecard AG and Chinese retail coffee company Luckin Coffee. These two companies have one other thing in common beyond their recent involvement in high profile accounting scandals – it turns out that both companies’ auditor was Ernst & Young, as was the case with several other companies involved in recent scandals. As discussed in an October 17, 2020 Wall Street Journal article entitled “String of Companies That Imploded Have Something in Common: Ernst & Young Audited Them” (here), a number of EY audit clients have faced financial issues in recent months, raising questions whether there is something about EY’s audit approach that contributed to the problems or allowed the problems to happen. Continue Reading Financial Scandals Involve Ernst & Young Audit Clients

Richard M. Leisner

After many decades of law practice, legal veteran Richard M. Leisner, a Senior Member in the Trenam law firm in Tampa, found that increasingly he has been called upon to be a sounding board and resource on proposed corporate transactions. In the following guest post, which is the second installment in a three-part series, Richie recounts a number of “open door encounters” – that is, occasions when colleagues came to his office to discuss pending matters. There are a number of important lessons from the tales described below. A version of this article previously was published in Trenam Law News & Insights, available at www.trenam.com. I would like to thank Richie 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 Richie’s article. Continue Reading Guest Post: Corporate Governance Tales from (Virtual) Open Door Encounters – Part 2

As part of a continuing series of recordings, I have been participating in sessions the Professional Liability Underwriting Society (PLUS) has organized discussing the potential D&O liability and insurance issues arising out of the coronavirus outbreak and the related economic disruption. In each session in the series I have been joined by my good friends Carl Metzger of the Goodwin Procter law firm and Rob Yellen of Willis Towers Watson. We recorded an updated session last week, the fifth in the series. The latest session is short (about 30 minutes), informal, and conversational. In the recording, we discuss what we are currently seeing in the D&O insurance marketplace and what we are telling our clients about it, and also project ahead for what might we may see as a result of the pandemic’s lengthening duration and continued spread. The recording can be found in an October 12, 2020 post on the PLUS Blog, here.

2020 has been called “the year of the SPAC.” (2020 has been called a lot of other things as well, but for purposes of this blog post, I am going to focus on the SPAC-related issues.) The reason for the fanfare about Special Purpose Acquisition Companies (SPACs) is that there has been a wave of SPAC offerings this year, raising tens of billions of dollars of capital. While the rush to conduct SPAC offerings has at times started to feel like a stampede, there are in fact questions being raised about at least some SPAC transactions. As discussed below, there has been a series of recent lawsuits involving SPACs, and regulators have made it clear that they are concerned about some features of some SPAC transactions. These recent developments suggest that some trouble could be brewing in SPAC-Land. Continue Reading Rain on the SPAC Parade?

As I have noted in prior posts, one of the follow-on effects of the recent racial justice movement has been increased scrutiny of racial diversity within corporate management, and in particular on corporate boards. The boards of several publicly traded companies have been hit with shareholder derivative lawsuits alleging that the directors breached their fiduciary duties by failing to include African-American individuals on the boards, while at the same time the companies were touting their diversity and inclusion efforts.

 

In addition to the recent litigation, efforts to advance board racial diversity have included legislation. Earlier this year, the California legislature passed a bill mandating the inclusion on boards of California headquartered companies of representatives of “underrepresented communities.” On September 30, 2020, California Governor Gavin Newsom signed the bill into law. As discussed below, even though the law has only been in place for a few days, a lawsuit challenging the bill has already been filed. Continue Reading California Board of Directors Diversity Bill Signed Into Law, Challenged by Lawsuit

In the latest COVID-19-related securities class action lawsuit filing, the cruise ship company Royal Caribbean Cruises has been hit with a securities suit alleging that the as the viral disease spread earlier this year the company attempted to soft-pedal its statements about the outbreak’s impact on its operations and bookings, as well as about the safety threat that the outbreak represented for ship crews. As discussed further below, the new lawsuit against Royal Caribbean reflects several of the key trends in the coronavirus-related lawsuits. A copy of the new complaint against Royal Caribbean can be found here. Continue Reading Royal Caribbean Hit with COVID-19-Related Securities Suit