After a bit of last-minute drama, the SEC on Wednesday issued its guidance for public company cybersecurity disclosures. The Commission’s guidance document emphasizes companies’ disclosure obligations under existing law and requirements. The statement also underscores the Commission’s concerns about insider trading prohibitions and the obligation of reporting companies to refrain from making selective disclosures about nonpublic information. As discussed below, the Commission’s Democratic members criticized the statement for not going far enough. The Commission’s February 21, 2018 press release about the cybersecurity disclosure guidance can be found here. The Commission’s statement and guidance on cybersecurity disclosure can be found here. SEC Chair Jay Clayton’s statement about the Commission’s guidance can be found here. Continue Reading SEC Releases Cybersecurity Disclosure Guidance

The U.S. Supreme Court ruled on February 21, 2018 that the Dodd-Frank Act’s anti-retaliation provisions protect only whistleblowers that make a report to the SEC, and do not apply to whistleblowers who report internally. The Court’s ruling, which resolved a circuit split on the question of who was entitled to the Act’s provisions, will significant limit the scope of the anti-retaliation protections. The Court’s February 21, 2018 opinion in Digital Realty Trust, Inc. v. Somers can be found here. Continue Reading U.S. Supreme Court Adopts Narrow View of Who Can Rely on Dodd-Frank Act’s Anti-Retaliation Protections

One of the most distinct phenomena at the peak of the Internet bubble in the late 90s was the way that so many otherwise entirely ordinary companies added “dot com” to their names to try to cash in on the frenzy. It now looks as if some companies are attempting moves from the same playbook amidst the current cryptocurrency mania. Companies with no prior connection either to bitcoin or blockchain are adopting names or strategies as a way to try to ride the current wave, even where the companies have little or no experience with the technologies. Regulators noting these developments have started sounding the alarm bell. And in at least one instance, these kinds of developments have led to securities litigation. Continue Reading Company Capitalizing on Blockchain Mania Draws Securities Suit

In a series of rulings culminating in the January 2016 decision in Trulia (about which refer here), Delaware’s courts have evinced their hostility to the kind of disclosure-only settlement in which merger objection suits are frequently resolved. Since that time, plaintiffs’ lawyers increasingly have filed merger-objection lawsuits outside of Delaware, either in federal court or courts in other states. The question since then has been whether other jurisdictions’ courts would follow Delaware’s courts’ lead in rejecting disclosure-only settlements. Many courts have followed Delaware, but others have followed a different path. In particular, New York, in an intermediate appellate court decision in Gordon v. Verizon (about which refer here), set a lower standard than Delaware’s courts for accepting disclosure-only settlements.

 

However, the apparently more lenient New York standard did not stop New York Supreme Court Judge Shirley Werner Kornreich from rejecting a proposed disclosure-only settlement of a lawsuit challenging Martin Marietta’s 2014 acquisition of Texas Industries. In a scathing February 8, 2018 opinion (here), Judge Kornreich rejected the proposed settlement as “utterly useless to shareholders.” Her opinion shows that even under New York’s seemingly more lax standard, disclosure only settlements could face significant scrutiny and could be rejected where the additional disclosures do not provide benefits to shareholders. Continue Reading New York Court Rejects “Utterly Useless” Disclosure-Only Merger Objection Suit Settlement

In the following guest post, Syed Ahmad, Brittany Davidson, and Andrea DeField of Hunton & Williams LLP take a look at a very interesting New York trial court decision relating to D&O insurers’ duty to advance defense costs. I would like to thank the authors for their willingness to allow me to publish their article as a guest post on my 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 the authors’ guest post. Continue Reading Guest Post: Court Requires Insurers to Advance Insureds’ Defense Costs

This past year was an eventful one in the corporate and securities litigation arena. In the following guest post, Haynes and Boone, LLP Partners Dan Gold, Kit Addleman, Thad Behrens, Emily Westridge Black, Carrie Huff, Tim Newman, David Siegal, and Odean Volker take a look at the important securities litigation developments during 2017. This article was previously published as a Haynes and Boone client alert. I would like to thank the authors for their willingness to publish their memorandum on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this site. Please contact me directly if you are interested in submitting a guest post. Here is the authors’ guest post. Continue Reading Guest Post: 2017 Year in Review — Securities Litigation

Francis Kean

Regular readers of this blog know that class action litigation is an important part of the Australian liability environment. Although comparisons between the Australian class action system and the U.S. system are frequent, there are important differences in class action litigation in the two legal systems, particularly with respect to securities class action litigation. In the following guest post, Francis Kean, Executive Director in Willis Towers Watson’s FINEX Global, takes a look at important differences in claims against issuer companies between the two legal systems and the important implications of these differences for purposes of D&O insurance coverage. This guest post is based on Francis’s original post on the Willis Towers Watson Wire blog. I would like to thank Francis for his willingness 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 Francis’s guest post. Continue Reading Guest Post: How “Pure Entity” Australian Class Actions have Distorted the D&O Market

John Reed Stark

As many readers undoubtedly are aware, the prices for bitcoin has plunged in recent days, from a peak of nearly $20,000 in December to approximately $8,300 more recently, representing a decline of nearly 60%. The prices for other cryptocurrencies have also fallen along the same order of magnitude. This dramatic decline certainly at least raises the question of whether or not the pricing bubble for cryptocurrencies that fueled the recent wave of initial coin offerings (ICOs) has burst – or at least, is about to burst. 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, suggests that the bursting of the ICO bubble may be exactly what the financial marketplace needs for the long haul. I would like to thank John for his willingness to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest for this site’s readers. Please contact me directly if you would like to submit a guest post. Here is John’s guest post. Continue Reading Guest Post: The Benefit of an ICO Bubble Burst

In general, securities litigation filing trends emerge gradually and across long stretches of time. These kinds of long term trends have been the subject of a number of recent reports discussed on this site – including, for example, recent reports from NERA Economic Consulting (about which refer here), Cornerstone Research (here), as well as my own report. Though trends often become apparent only over the course of months and years, sometimes they are apparent in much shorter time frames. As it happens, the securities suit filings on a single day last week managed to neatly encapsulate all of the important current securities litigation filing trends. Continue Reading The Sum of All Securities Litigation Filing Trends

As has been well-documented on this site, 2017 was an extraordinary year for securities class action lawsuit filings, with a record number of new lawsuits filed at a record rate. Among the important contributing factors to the significant volume of securities suit filings during the year was the volume of lawsuits filed against life sciences companies. The significance of the litigation activity against biopharma companies, a subset of the overall life sciences sector, was the subject of a detailed and precise analysis in a guest post earlier this week.

 

There is still the question of the meaning of large volume of litigation involving life sciences companies generally.  According to the latest annual analysis from the Dechert law firm, the number of securities lawsuits filed against life sciences companies in 2017 increased 30% from the previous year, and increased more than 225% from only five years earlier. The law firm’s February 8, 2018 report entitled “Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies: 2017 Edition” can be found here. Continue Reading A Detailed Look at 2017 Securities Litigation Involving Life Sciences Companies