Maurice Pesso
Greg Steinberg

As I have frequently noted on this blog (for example, here), problems involving relatedness between claims present recurring coverage issues under D&O insurance policies. In the following guest post, Maurice Pesso and Greg M. Steinberg of the White and Williams LLP law firm take a look at a recent decision out of the Northern District of Illinois applying New York law to a D&O insurance dispute involving related claims issues. I would like to thank Maurice and Greg for their willingness to allow me to publish their 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 Maurice and Greg’s guest post. Continue Reading Guest Post: Another Court Applies New York’s “Sufficient Factual Nexus” Test to Related Claims

Along with all of the other risks arising from companies’ increasing dependence on electronics communications and data storage technology has come not only the risks of a data breach caused by a hacker, but also the risk of a company’s transfer of funds by one of its employees who has been duped into believing the transfer was legitimate and authorized. These kinds of losses, which have been called “payment instruction fraud” or “social engineering fraud,” raise of a host of potential issues under traditional insurance policies, owing to the voluntary nature of the funds transfer made by a person authorized to access the company’s computer system. A recent decision by the Ninth Circuit illustrates the kinds of coverage problems that can arise from these circumstances. The Ninth Circuit’s unpublished April 17, 2018 opinion in Aqua Star (USA) Corp. v. Travelers Casualty & Surety Company of America can be found here. The Wiley Rein’s law firm’s April 19, 2018 post about the Ninth Circuit decision can be found here. Continue Reading Ninth Circuit: No Crime Policy Coverage for Social Engineering Fraud Losses

Santa María la Real de La Almudena cathedral, viewed from the Parque De La Montaña in Madrid

The final stop on The D&O Diary’s European assignment last week was a brief sojourn in Madrid, Spain’s capital city. More than 3 million people live in the sprawling city, but the city’s elegant central district is quite compact. Under any conditions, the city’s many boulevards and neighborhoods invite exploration on foot. But with the summer-like sunshine and warmth that prevailed throughout our visit, we were happy to ramble around the city, taking in the sights and enjoying the city’s many charms. Continue Reading Scenes of Madrid

One of the trendy concepts in certain circles in recent years has been the idea of litigation management bylaws – that is, the adoption by company of bylaw provisions that help manage the company’s litigation risks. For example, one bylaw provision that has been widely adopted by publicly traded companies is a forum selection provision specifying a particular jurisdiction as the preferred forum for litigating shareholder disputes.

 

Another one of the proposed litigation management bylaws that has proven more controversial is the idea of a mandatory arbitration clause, requiring shareholder claimants to submit claims – including even claims under the federal securities laws – to arbitration. This idea, which has been percolating for years, received a significant boost in a statement from SEC Commissioner Michael Piwowar. In a recent letter to a member of Congress, SEC Chair Jay Clayton weighed in with his views on the topic, suggesting that the idea is not a particular priority for him. But aspects of his communication and of the current state of debate on the issue suggest that the idea is probably not going to just go away. Continue Reading Mandatory Arbitration of Shareholder Claims: What’s the Latest?

Torre de Belém

The D&O Diary’s European assignment continued last week with a stopover in Lisbon, Portugal’s hilly capital city, known to the locals as Lisboa. It is located on the north side of the Rio Tejo (known as the Tagus River in English). The city itself has about 550,000 residents, but the city’s sprawling metropolitan area has about 2.7 million residents. Lisbon may not have the allure of some other European capitals, but it has an abundance of history and charm; a diversity of interesting neighborhoods to explore; and an abundance of great food, as reflected in the pictures below. Continue Reading A Visit to Lisbon

Trinitee Green

D&O insurance issues can be particularly difficult in the bankruptcy context. A number of issues can arise in the bankruptcy context that are not usually involved in ordinary claims circumstances. In the following guest post, Trinitee Green of the Bryan Cave Leighton Paisner law firm reviews and analyzes a particularly complicated set of circumstances that occurred post-confirmation in a bankruptcy proceeding. I would like to thank Trinitee 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Trinitee’s article. Continue Reading Guest  Post: Plaintiffs Can Keep Their D&O Claims But They Cannot Touch The Insurance Proceeds

In a development in an enforcement action that is the first of its kind, the SEC has levied a $35 million penalty against Altaba, Inc. as successor in interest to Yahoo, for Yahoo’s two-year delay in reporting the massive data breach the company experienced in December 2014. Altaba, which neither admitted nor denied any wrongdoing, agreed to pay the penalty as part of the settled resolution of SEC cease-and-desist proceedings. The penalty follows the SEC’s recent release of cybersecurity disclosure guidance for reporting companies and clearly indicates that the agency is increasingly focused on companies’ cybersecurity disclosure practices. The SEC’s April 24, 2018 press release about the penalty can be found here. The SEC’s April 24, 2018 order in the cease-and-desist proceedings can be found here. Continue Reading First-Ever SEC Data Breach Disclosure Enforcement Penalty Imposed

As I noted at the time, on March 20, 2018, the U.S. Supreme Court issued its unanimous decision in Cyan, Inc. v. Beaver County Employees Retirement Fund, holding that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. In the following guest post, Doug Greene, Jessie Gabriel, Marco Molina, and Brian Song of the Baker & Hostetler law firm take a comprehensive look at the decision, including its context and significance. As the authors note, the decision has important implications for companies and their D&O insurers, as well as for claims going forward. I would like to thank 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: The State of Securities Litigation After Cyan

A view of The City from Charing Cross Bridge. The dome of St. Paul’s is on the left, the Cheese Grater is in the center, and the Walkie Talkie is on the right.

The D&O Diary is on assignment in Europe this week, with a first stop for meetings and events in London. In between, l had time for some touring around the city. I have visited London many times before, but just the same, I made a commitment to myself that I wouldn’t do anything that I have done before. As the pictures below show, I was largely successful. Continue Reading Images of London

Mark Sutton
Karen Boto

Among other things, the media clamor about claims of sexual misconduct involving high profile politicians and business executives has in some instances led to D&O claims, as I recently noted. In the following guest post, Mark Sutton and Karen Boto of the Clyde & Co. law firm take a look at this phenomenon, with particular attention to the specific circumstances at two prominent U.K. charities. I would like to thank Mark and Karen 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 Mark and Karen’s guest post. Continue Reading Guest Post: Sexual Misconduct Claims: How Charitable is Your D&O Policy?