In my recent roundup of the top current stories in the world of D&O, I noted the increasing importance of geopolitical issues as a source of D&O claims risk. Among the factors supporting this trend is the rising relevance of cross-border enforcement initiatives, which in many instances had led to D&O claims. In the latest sign of the importance of cross-border enforcement issues, the SEC has announced the formation of a cross-border task force to “identify and combat cross-border fraud harming U.S. investors.” The SEC’s September 5, 2025, press release about the task force can be found here.  A September 10, 2025, post on TheCorporateCounsel.net blog about the new task force’s formation can be found here.

Continue Reading SEC Forms Task Force to Combat Cross-Border Fraud
Sarah Abrams

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at the new whistleblower program that the DOJ’s antitrust division recently announced in conjunction with the U.S. Postal Service, and considers the D&O liability and insurance implications. I would like to thank Sarah 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.

Continue Reading Guest Post: Going Postal

It is frequently the case that securities class action lawsuits are accompanied by a parallel shareholder derivative lawsuit involving substantially similar allegations. But what happens to the derivative lawsuits when the related securities class action lawsuit is settled? An August 2025 study from Cornerstone Research analyzes the settlements of these parallel derivative lawsuits during the period 2019 through 2024. The Cornerstone Research report can be found here.

Continue Reading Settlement of Parallel Derivative Actions
Sarah Abrams

Through several different regulatory and legislative actions, including through Executive Orders and the passage of the GENIUS ACT, the current administration has created a favorable environment for cryptocurrency. In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, examines the recently adopted legislation and regulatory actions concerning cryptocurrency and considers the D&O insurance underwriting implications. I would like to thank Sarah for allowing me to publish her article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.

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In August, Treasury Secretary Scott Besset confirmed that the United States’ Strategic Bitcoin Reserve (SBR), consists of $15 – $20 billion in coins.  Besset further stated that the Treasury Department is “committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve.” His position on continuing to accumulate Bitcoin aligns with President Trump’s March 2025 Executive Order (EO), which directs the U.S. Treasury to establish the SBR.  In addition to the Crypto EO and creation of the SBR, the first federal cryptocurrency legislation, the GENIUS Act, was signed into law in July. 

Also of note, as of Q2, public companies reportedly purchased around 131,000 Bitcoins. With Bitcoin trading around $115,000–$120,000 and rising, companies holding the asset may currently be boosting the value of their corporate treasuries. Even so, will D&O underwriters of companies acquiring Bitcoin face increased exposure as a result?  

While the Treasury increases SBR Bitcoin holdings and the GENIUS Act may create some cryptocurrency guardrails, the SEC requires companies to reporton Bitcoin ownership. In addition, reports of criminal activity related to cryptocurrencies, including Bitcoin, continue to make headlines. This may leave D&O underwriters and insured companies wondering whether Bitcoin is a good corporate investment or a liability. 

The following discusses Bitcoin and the GENIUS Act briefly, disclosure requirements for Bitcoin ownership in SEC filings, as well as recent crypto-related criminal activity, and potential D&O risk stemming therefrom. 

What is Bitcoin?

Bitcoin (BTC; ₿) is the first decentralized cryptocurrency. It began operating in 2009, and in 2021, El Salvador became the first country to adopt it as legal tender. As D&O Diary Readers may recall, Bitcoin is the native asset of its own blockchain, with each unit of value recorded on its distributed ledger. Its price is determined by supply and demand in open markets, meaning it is not a stablecoin. Bitcoin transactions are secured by cryptographic digital signatures and validated through the network’s proof-of-work consensus, which prevents double-spending, while private keys ensure only owners can authorize transfers.

Notably, Besset has indicated that the Treasury SBR’s current Bitcoin holdings were mostly derived from past seizures of criminal enterprises and that future Bitcoin additions will be confiscated through law enforcement actions. While the Treasury can seize Bitcoin from criminal bad actors, executives and corporate boards may purchase Bitcoin as part of a corporate investment strategy to diversify or hedge against inflation.  

It is important to note that, at this time, the GENIUS Act does not protect corporate Bitcoin holders, since its provisions apply only to stablecoins. While the Act creates federal oversight and consumer protections for payment stablecoins, it does not extend similar safeguards to Bitcoin or other non-pegged digital assets. 

Even so, the GENIUS Act may encourage broader crypto adoption in payments and settlement, indirectly boosting corporate comfort with digital assets (including Bitcoin).

The GENIUS Act

The GENIUS Act is the first federal cryptocurrency legislation enacted in the U.S. The Act establishes a legal framework for the issuance, sale, and redemption of stablecoins — digital assets pegged to a sovereign currency.  The Act further provides regulatory clarity for businesses and financial institutions using stablecoins in payments and financial infrastructure.  Under the law, stablecoin holders have the right to redeem tokens at face value. Because Bitcoin is non-pegged and its value is based on supply and demand, this type of redemption by companies holding Bitcoin as an investment may not be available if its value plummets.  

SEC Filings

Thus, corporations investing in Bitcoin may be required to file 10K and 10Qs with the SEC that report the risk tied to Bitcoin’s price volatility.  It is also important to note that, under U.S. GAAP, Bitcoin is treated as an intangible asset with an indefinite life (not cash, not a financial instrument). As of January 1, 2025, a new FASB standard (ASU 2023-08) requires certain crypto assets, including Bitcoin, to be measured at fair value, with unrealized gains or losses recognized in net income each reporting period.  Accordingly, there may be executive and regulatory exposure stemming from corporate reports on Bitcoin ownership and value in public filings. 

And, as a result, Bitcoin ownership may come under shareholder scrutiny, especially if its value craters. Bitcoin was valued as low as $76,000 in April of this year; however, its current market value is now up 58%. While that is a strong return, corporate treasuries that include crypto may be less versatile when liquidity is needed if Bitcoin’s value dips again.  Therefore, there may be increased shareholder demands on corporate boards when Bitcoin is disclosed as an investment strategy. 

Shareholders may also be concerned by rising reports of crypto-related cybercrime and physical attacks on large holders and their families.

Crypto Crime 

As of mid-August, U.S. officials have sanctioned more than a half-dozen crypto exchanges around the world for allegedly serving cybercriminals.  This includes Russian cryptocurrency exchange, Garantex, which, according to the Treasury Department, custodied and laundered large sums of crypto, including millions of dollars derived from Russia-linked ransomware attacks. U.S. and European law enforcement agencies have repeatedly accused the platform of being used by cybercriminals as well as gangs and designated terrorist groups.

The Garantex platform allegedly allowed people to circumvent sanctions on Russian banks by bringing rubles to the company’s offices in Moscow and St. Petersburg and getting cryptocurrency in return, which could then be exchanged for other fiat currencies.  Bitcoin was not necessarily identified as a cryptocurrency exchanged on the Garantex platform, however, the association with government-identified criminal actors may impair Bitcoin’s reputation.  

Another concerning trend tied to cryptocurrency is that theft of cryptocurrency increased in 2025, with total crypto losses, including Bitcoin, reaching nearly $2.8 billion in the first half of this year.  One disturbing development is the rise of so-called “wrench attacks”. In a wrench attack, criminals use physical violence or coercion against individuals to access their crypto holdings.  Two recent incidents, both in France, involved the daughter and grandson of a prominent cryptocurrency CEO who were attacked in broad daylight in Paris and the father of a crypto entrepreneur being abducted and held for ransom.  

While companies holding Bitcoin may have Kidnap and Ransom insurance, increasing the risk of kidnapping or violence against an executive with access to corporate Bitcoin private keys may also call into question a board and executive team’s duty of care and oversight. 

Conclusion

As Bitcoin’s popularity as a holding, both by the U.S. treasury and by companies, increases, D&O underwriters may want to consider whether existing coverage is sufficient for the follow-on risks.  Will the crypto coin’s volatility call into question executive financial management decisions?  And, will ties to criminal activity degrade shareholder sentiment when companies disclose Bitcoin acquisitions?  Time will tell, but in the meantime, D&O insurers may want to be aware of which companies’ treasuries now include Bitcoin.

The views expressed in this article are exclusively those of the author, and all of the content in this article has been created solely in the author’s individual capacity. This site is not affiliated with the author’s company, colleagues, or clients. The information contained in this article is provided for informational purposes only  and should not be construed as legal advice on any subject matter.

Jack Keilty


In the following guest post, Jack Keilty, Head of Management Liability, New Dawn Risk, examines the growing problem of social engineering fraud, and considers the problems losses from this type of fraud can present from an insurance standpoint. I would like to thank Jack 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Jack’s article.

Continue Reading Guest Post: The Social Engineering Fraud-Shaped Hole in Insurance Cover
Sarah Abrams

In the following guest post, Sarah Abrams takes a look at a recent settlement of a securities class action lawsuit in which the plaintiffs alleged that the defendant company had failed to disclose its use in its haircare products of certain banned chemicals, and then considers whether the current Make America Health Again initiatives could expose companies to future claims that they allegedly failed to disclose their continued use of banned chemicals. I would like to thank Sarah 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.

Continue Reading Guest Post: If Looks Could Kill

Since the outset of President Trump’s efforts to conduct trade policy through an active use of tariffs, I have been concerned about the possibility of tariff-related corporate and securities litigation. Inevitably, I have been concerned, investors will say that companies tried to soft-pedal the likely impact of tariffs on the companies’ financial results. But while I have worried about the prospects for this type of litigation, I have not been able to provide an example of what I was concerned about – that is, until now. Late last week, a plaintiff shareholder filed a securities class action against industrial materials company Dow, Inc., alleging that the company made misleading statements about the impact the Trump tariffs would have on the company. A copy of the new complaint against Dow can be found here.

Background

Dow is an industrial materials company located in Michigan. According to the complaint, the company has historically touted its “industry-leading dividend.” The complaint alleges that during the class period, the company made statements reassuring that a number of adverse factors, including the impact of the Trump tariffs, would not affect the company’s financial results nor would it affect the company’s dividend.

For example, the complaint alleges that during the class period, the company said in various statement that it “was well positioned to weather macroeconomic and tariff-related headwinds while maintaining sufficient levels of financial flexibility to support the Company’s lucrative dividend.” The company also allegedly referred to its “industry-leading flexibility to navigate global trade dynamics.”

On July 24, 2025, the company when the company released its 2Q25 earnings, it announced disappointing financial results. In a call with analysts, the company’s CEO blamed the poor results on “the lower-for-longer earnings environment that our industry is facing, amplified by recent trade and tariff uncertainties.” The company also announced that same day that it was lowering its dividend. According to the complaint, the company’s share price declined nearly 18% on the news.

The Lawsuit

On August 29, 2025, a plaintiff shareholder filed a securities class action lawsuit in the Eastern District of Michigan against Dow and certain of its executives. The complaint purports to be filed on behalf of a class of investors who purchased the company’s securities between January 30, 2025, and July 23, 2025.

The complaint alleges that during the class period the defendants failed to disclose that “(i) Dow’s ability to mitigate macroeconomic and tariff-related headwinds, as well as to maintain the financial flexibility needed to support its lucrative dividend, was overstated; (ii) the true scope and severity of the foregoing headwinds’ negative impacts on Dow’s business and financial condition was understated, particularly with respect to competitive and pricing pressures, softening global sales and demand for the Company’s products, and an oversupply of products in the Company’s global markets; and (iii) as a result, Defendants’ public statements were materially false and misleading at all relevant times.”

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The plaintiffs seek to recover damages on behalf of the plaintiff class.

Discussion

As far as I know, this lawsuit is the first securities suit to be filed related to the Trump tariffs. I suspect strongly it will not be the last. I think there will be more to follow, perhaps many more.

My concern is that when companies announce disappointing results, with the disappointment in whole or in part due to the adverse global trade conditions resulting from the impact of the tariffs, plaintiffs’ lawyers armed with hindsight will comb through prior company statements looking for optimistic comments about the company’s ability to weather the tariffs. The kinds of statements the plaintiffs’ lawyers will be looking for will touch on the company’s supply chain resilience, or its ability to source materials from lower-tariff countries, or its ability to have its suppliers or customers absorb the tariff-related costs. One particularly complicating factor has been the Trump administration’s variable and changing approach to tariffs, with increase tariffs or trade deals arising unpredictably.

The unpredictability may prove to be particularly challenging to many companies, and not just to the extent it increases the uncertainty of future results. Many companies may find the unpredictability challenging to planning and setting strategy. Some companies may find it expedient to refrain from strategic investments, in light of the uncertainty, which could in and of itself weigh on financial results. All of these conditions could be exacerbated to the extent rising prices contribute to lower consumer sentiment, as well as to lowered business expenditure. Companies reporting disappointing financial results in the months ahead may face heightened scrutiny for their prior statements about their ability to weather the global trade disarray.

The possibility of future tariff-related securities suits and other corporate litigation is definitely something to watch for in the months ahead.

Every year after Labor Day, I take a step back to survey the most important current trends and developments in the world of Directors’ and Officers’ liability and insurance. This year’s review is set out below. As the following discussion shows, this is a particularly interesting time in the world of D&O.

Continue Reading What to Watch Now in the World of D&O
Sarah Abrams

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at President Trump’s recent Executive Order designed to expand the investment options available in 401(k) and other defined-contribution retirement plans, and considers the Order’s potential implications for ERISA liability and insurance. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post contributions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.

Continue Reading Guest Post: Will I Ever Retire?