John Reed Stark

The Capital One data hack has attracted a great deal of attention, not least because of the size and extent of the breach, but also because the hacker apparently managed to steal data from The Cloud. 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, takes a closer look at this aspect of the Capital One data breach and asked whether Amazon, the cloud service provider, can be held liable for the hack? Stark takes a close look at the technology involved and analyzes the potential liability issues between Capital One, on the one hand, and Amazon, on the other. A version of this article originally appeared on Securities Docket. My thanks to 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: Is Amazon Liable for the Capital One Hack?

Class actions are of course well-established in the United States, but class action litigation has never been as well-developed in the UK. Among a number of reasons for this arguably is the lack of an “opt-out” class action procedure in the UK. However, as detailed in an interesting July 2019 memo by Colin Hutton of the CMS law firm entitled “Opt-Out Class Actions in the UK: Are We Entering a New Era in Litigation?” (here), several recent developments suggest that there may be “gradual but significant changes that may well alter the litigation culture in the UK permanently.” Continue Reading Are We Entering a New Class Actions Era in the UK?

Francis Kean

One of the more interesting 21st century corporate disclosure developments has been the increased expectation by legislators and regulators that companies should examine their supply chains in order to determine whether chain participants are engaged in illegal or improper activities, and then report on their examination to investors and to regulators. One U.S. example of these kinds of disclosure developments is the Dodd-Frank Act conflicts minerals disclosure requirements. At the beginning of this year another example of supply chain disclosure requirements went into effect in Australia, with the effectiveness on January 1, 2019 of the Australian law regarding modern slavery. As discussed in the following guest post from Francis Kean, the U.K.’s modern slavery disclosure law his been in effect for four years.  In his guest post, Francis takes a look at the U.K. experience under this law. Francis is Executive Director FINEX Willis Towers Watson. A version of this article was previously published on the Willis Towers Watson website. 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: Modern Slavery Report Recommends Tougher Disclosure Rules for U.K. Companies

In addition to all of the other risks, liabilities and exposures arising from cybersecurity concerns, you can now add the possibility of a whistleblower action for cybersecurity fraud. According to a July 31, 2019 press release from counsel for the whistleblower involved (here), Cisco Systems has agreed to an $8.6 million settlement in what the press release claims is the “first cybersecurity whistleblower case ever successfully litigated under the False Claims Act.” Cisco has agreed to pay the amount to settle allegations that the company knowingly sold vulnerable and defective video surveillance software to federal, state, and local government agencies, exposing the systems to unauthorized access. As discussed below, this development even further expands the range of concerns companies must take into account when assessing their cybersecurity exposures. An August 12, 2019 memo from the Jones Day law firm about the settlement and its implications can be found here. Continue Reading Cybersecurity Whistleblower Claim under the False Claims Act Settled

As I have frequently noted on this site (most recently here), plaintiffs’ lawyers often attempt to fashion a securities lawsuit out of on revelations of corporate activities involving alleged violations of anti-bribery laws. A securities class action lawsuit filed this week represents the latest example of this phenomenon. In this instance, the allegedly improper conduct involved activities of an acquired company that reportedly took place prior to the merger. As discussed below, this latest example of the bribery-related securities lawsuits involves several interesting variations on the pattern of these kinds of follow-on securities suits. Continue Reading Bribery-Related Securities Suit Based on Acquired Company’s Pre-Merger Activities

In the following guest post, Stephen J. Choi, Jessica M. Erikson, and Adam C. Pritchard take a look at the plaintiffs’ attorney fee awards in “mega-settlements” in securities class action lawsuits. The authors ask the question whether the lawyers who lead these cases and negotiate the settlements are appropriately rewarded for their efforts. Choi is the Murray and Kathleen Bring Professor of Law at New York University School of Law. Erickson is Professor of Law & Associate Dean for Faculty Development at University of Richmond School of Law. Pritchard is the Frances and George Skestos Professor of Law at University of Michigan Law School. My thanks to the authors 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: Working Hard or Making Work? Plaintiffs’ Attorneys Fees in Securities Fraud Class Actions

Federal Reserve Building, Washington, D.C.

The Federal Reserve wants bank directors and senior executives  to know that while their D&O insurance policies are “an important risk mitigation tool,” their policies could contain exclusions that could “potentially limit coverage” and leave them without insurance in the event of a claim. In a July 23, 2019 letter (here), the Fed informed banks and other financial institutions of the risks associated with exclusionary provisions in D&O insurance policies and urged board members and senior executives to “understand fully the protections and limitations” that the D&O insurance policies provide. As discussed below, the Fed’s guidance is good advice for directors and senior executives of any organization, not just for banks. An August 3, 2019 post on the Willis Towers Watson blog about the Fed letter can be found here. Continue Reading The Fed Has a Message for Banks about D&O Insurance          

Bill Boeck

In a number of prior posts, I suggested that privacy related issues may be a significant area of potential corporate risk in the months and years ahead. Among the potential sources of risk are the legal requirements of the General Data Protection Regulation (GDPR), the EU’s privacy regulation, which just went into effect in May 2018. Because GDPR is still relatively new, we are still learning what it means in terms of corporate risk. In the following guest post, Bill Boeck takes a look at one interesting and arguably surprising aspects of GDPR’s requirements. Bill is currently Senior Vice President and Insurance and Claims Counsel with the Lockton Companies.  He is Lockton’s global leader for cyber claims and for the development of proprietary cyber wordings and endorsements.  Bill also leads Lockton’s US financial lines claims practice. A version of this article previously was published on the Lockton Cyber Risk Update Blog. I would like to thank Bill for his willingness to allow me to publish his 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 Bill’s article. Continue Reading Guest Post: Using Facebook’s “Like” Button May Violate the GDPR

At a time when litigation involving corporate disclosures regarding cybersecurity, privacy, and human resource practices and other hot topics dominate the discussion, potential corporate exposure arising from environmental liabilities and disclosures does not always receive the attention it deserves. However, as I have previously noted on this blog,  environmental disclosures can and frequently are the subject of D&O litigation, both in the form of securities class action litigation and shareholder derivative litigation. A new securities suit recently filed against 3M is the latest example of corporate and securities litigation arising from environmental disclosure-related issues. As discussed further below, the 3M complaint is also the latest example of event-driven securities litigation as well. Continue Reading Environmental Liability-Related Securities Suit Filed Against 3M

John Reed Stark

The news of the recent massive data breach at Capital One made the front pages of the business sections of newspapers across the country. The hack has drawn attention not just because of the magnitude of the hack, but also because the hackers apparently managed to steal data from The Cloud. The Capital Data breach represents a “wake-up call” for boards of directors, according to the following guest post from John Reed Stark. John is President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement. A version of this article originally appeared on Securities Docket. My thanks to John for allowing me to publish his article 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: What the Capital One Hack Means for Board of Directors