In the following guest post, Francis Kean takes a look at the November 15, 2019 U.K. High Court of Justice (Chancery Division) judgment in the long-running HBOS acquisition-related lawsuits brought by a large group of shareholders against Lloyds Banking Group and its directors. As Francis discussed below, the judgment has significant implications for these kinds of actions under U.K. law. Francis is Executive Director FINEX Willis Towers Watson. I would like to thank Francis 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 Francis’s article. Continue Reading Guest Post: Pyrrhic Victory For Shareholders in Epic Credit Crunch Claim against Directors
On November 21, 2019, when a plaintiff shareholder filed a securities class action lawsuit against Aurora Cannabis, Inc. and certain of its directors and officers, the company became the latest U.S.-listed Canadian cannabis company to be hit with a U.S. securities class action lawsuit. The lawsuit against Aurora came just one day after a different claimant launched a separate U.S. securities lawsuit against another Canadian-based and U.S.-listed cannabis company, Canopy Growth. These two companies join a growing list of cannabis-related firms that have been hit with securities suits this year. As discussed below, these cannabis-related company lawsuits are one of several factors contributed to the continued elevated level of securities class action lawsuit filings in the U.S. 
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According to the latest annual report from the SEC’s Office of the Whistleblower, the number of whistleblower reports and the total value of whistleblower awards continued at elevated levels during fiscal 2019 (which ended September 30, 2019). Though the reports and awards remained high during the fiscal year, both were down relative to the prior fiscal year. And while the aggregate award values and even several individual awards during the fiscal year are impressive, the small number of awards relative to the vast numbers of whistleblower reports is noteworthy and striking, as is discussed further below. The Office of the Whistleblower’s November 15, 2019 report can be found 
As observers have discussed the kinds of problems that the U.S. Supreme Court’s Cyan decision can create, specific concerns have included the possibility of parallel state and federal court litigation, and even the possibility of parallel litigation in multiple states. In the course of the discussion of these issues, these litigation risks might have seemed merely theoretical. However, a series of lawsuits filed against a recent IPO company show that these kinds of multiple and parallel litigation risks are far from merely theoretical. The raft of jurisdictionally complicated litigation the company now faces shows the extent of the problems that Cyan creates. The company’s situation also underscores the dramatic need for Congress to address revise the securities laws in order to prevent these kinds of situations. 
One of the more challenging issues businesses must confront as wrongdoers have turned Internet tools into criminal devices has been the rising threat of payment instruction fraud, or, as it is sometimes called, social engineering fraud. Along with these crimes have come vexing questions of insurance coverage for the ensuing losses. Courts have struggled to determine whether or not payment instruction fraud losses are covered under Crime policies. A recent case in the Southern District of New York raises the question whether a payment instruction fraud loss is covered not under a Crime policy but rather under insurance policy containing both E&O and Cyber coverages. 
The SEC’s Enforcement Division had another active enforcement year in fiscal 2019, which ended September 30, 2019, that resulted in substantial recoveries. According to the Division’s latest annual report, the agency pursued more enforcement actions in fiscal 2019, including more standalone actions, than in the past several years. The agency’s enforcement action monetary recoveries, including both penalties and disgorgement, also were at the highest level in years. As the report points out, the agency maintained this level of activity and recoveries despite a number of factors – what the report describes as “significant headwinds” — that constrained the agency’s efforts and recoveries. The Enforcement Division’s November 6, 2019 annual report can be found 
The D&O Diary’s European itinerary continued with a quick weekend stop in Paris. The weather forecast projected rain for pretty much the entire weekend. And it did in fact rain Sunday morning. But the rest of the weekend was dry and more or less sunny.