In the latest example of a post de-SPAC transaction electric vehicle company getting hit with a securities class action lawsuit, a plaintiff shareholder has filed a securities suit against Canoo, Inc. as well as against the former directors and officers of the SPAC into which Canoo merged in December 2020. The new lawsuit is one of many securities suits that have been filed against companies in the electric vehicle industry. The underlying circumstances may illustrate some of the pitfalls involved when a fledgling private firm becomes a publicly traded company. The plaintiff’s April 2, 2021 complaint can be found here. Continue Reading Another Post-SPAC Merger Electric Vehicle Company Securities Suit
In the latest edition of the law firm’s annual report, Sidley Austin takes a detailed look at important securities litigation developments in 2020 relating to life sciences companies. The report includes not only a review of life sciences companies’ securities litigation class action filings trends but also examines life sciences companies’ track record in the courts, on motions to dismiss in the district courts and on appeal. The law firm’s report, entitled “Securities Class Actions in the Life Sciences Sector: 2020 Annual Survey” can be found here. The law firm’s two-page report summary can be found here. Continue Reading A Detailed Look at 2020 Securities Litigation Against Life Sciences Companies
One of the perennial D&O insurance issues is the question of coverage for costs incurred by the corporate organization in connection with responding to an SEC investigation – what is often referred to as entity investigative cost coverage. These coverage questions are so fraught because of the sheer magnitude of the expense that entities often incur when they find themselves subject to an SEC investigation. In the latest example of this recurring insurance coverage issue, a federal district court has held that the costs the auto rental firm Hertz Global Holdings incurred in connection with an SEC investigation are not covered under its applicable D&O insurance program. The court’s decision illustrates many of the recurring aspects of this frequent insurance coverage issue. Southern District of New York Judge Alison J. Nathan’s March 30, 2021 opinion in the case can be found here. Continue Reading Formal SEC Investigation not a “Securities Claim” Under D&O Insurance Policy
On Wednesday, March 31, 2021, I will be participating in a PLUS webinar entitled “New Risks of Claims Against Directors from COVID-19, Cyber Attacks, and The Growing Support for ESG and Diversity and Inclusion.” The webinar will be hosted by Greg Markel of the Seyfarth Shaw law firm. The panel will include Paul Lavelle, of Zurich North America; Reed Kleinle, of Chubb; and Gina Ferrari of Seyfarth Shaw. The webinar is free, will begin at 2 pm EDT, and will last one hour. To register, please refer here. Please note that the registration deadline is Tuesday, March 30, 2021.
Anyone reading the business pages know that SPAC IPO activity continues to surge; indeed, we have not yet even officially completed 2021’s first quarter, yet the number of SPAC IPOs completed and the amount of funding raised have both already exceeded the totals for the full year 2020. As I have already noted in prior posts on this site, all of this SPAC activity has already attracted some legal action. At the end of the last week, there were further signs that the legal activity could be about to pick up. As discussed below, news reports circulated late last week that the SEC has sent informal inquiries to Wall Street banks concerning SPACs, and, as also discussed below, a plaintiff shareholder has initiated a class action lawsuit against the directors and officers of a SPAC, among others, in Delaware Chancery Court presenting some alternative liability theories. Continue Reading Is SPAC-Related Legal Action About to Heat Up?
The pandemic’s disruption has had divergent effects on different population segments. In the following guest post Sarah Abrams, Esq., Director, Management Liability Markel, takes a look at the implication of this divergent population impact upon organizations’ diversity and inclusion efforts. The viewpoints expressed in the article are the authors alone and that not that of Markel. 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article. Continue Reading Guest Post: Achieving Organizational Diversity in the Wake of the Pandemic
In its latest annual study, ISS Securities Class Action Services reports that in 2020 the Robbins Geller law firm secured the highest dollar value in securities class action lawsuit settlements during the year, and also was involved in the highest number of separate settlements. The report, which includes both U.S. and Canadian settlements, ranks the top 50 plaintiffs law firms by total dollar value recoveries and the Top Ten plaintiffs law firms ranked by number of settlements achieved. The March 23, 2021 ISS SCAS report, which is entitled “The Top 50 of 2020,” can be found here. Continue Reading ISS SCAS Report Ranks Top 50 Plaintiff’s Securities Law Firms by 2020 Settlement Values
As I have documented on this site, over the last few months plaintiffs’ lawyers have filed a series of lawsuits against the directors of companies that allegedly lack African American representatives on their corporate boards. Many of these lawsuits, particularly at the outset of this litigation filing trend, were filed by the same law firm. Among the first of these lawsuits was a shareholder derivative lawsuit filed in July 2020 against the board of the social media company, Facebook. In an order dated March 19, 2021 (here), Northern District of California Magistrate Judge Laurel Beeler granted the defendants’ motion to dismiss the plaintiff’s complaint. The dismissal was without prejudice with respect to the plaintiff’s proxy misrepresentation claims under Section 14(a). As discussed below, the court’s ruling could have important implications for the other pending (and prospective future) board diversity lawsuits. Continue Reading Facebook Board Diversity Lawsuit Dismissal Motion Granted
One of the more noteworthy and interesting observations emerge the 2020 year end securities class action lawsuit filing review was the finding that, while the overall number of lawsuit filings declined in 2020 relative to 2019, the number of lawsuits filed against non-U.S. U.S.-listed companies actually increased during the year. In the following guest post, Joseph Burke and John Cheffers, take a closer look at the securities lawsuit filings against non-U.S. companies and suggest some possible causes for the amount of litigation. Joe is the Senior Economist and Data Scientist at Watchdog Research, Inc. and John is Director of Research and legal counsel for Watchdog Research. This summary article is also available on Watchdog Research’s website and the full report is available on request. I would like to thank Joe and John 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 Joe and John’s article. Continue Reading Guest Post: Foreign Restatements and Securities Class Action Suits
In a pattern that is becoming familiar, Lordstown Motors, an electric vehicle company that recently merged into a publicly traded SPAC and that was the subject of an even more recent short seller report, has been hit with a securities class action lawsuit. The defendants named include only executives of the vehicle company and do not include any former officers of the SPAC. A copy of the March 18, 2021 complaint can be found here. Continue Reading Another Short Seller-Targeted Post-DeSPAC Electric Vehicle Company Hit with a Securities Suit