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For a while a few years ago, litigation reform bylaws were all the rage – including forum selection bylaws, fee shifting bylaws, even mandatory arbitration bylaws. More recently, discussion of the topic quieted down, in part because the Delaware legislature enacted legislation allowing Delaware corporations to adopt forum selection bylaws while also prohibiting fee-shifting bylaws. However, the topic of litigation reform bylaws may be back on the docket again. In a speech earlier this week, SEC Commissioner Michael Piwowar invited companies heading toward an IPO to adopt arbitration provisions in their corporate bylaws. Continue Reading Up Next: Mandatory Securities Claim Arbitration Provisions?

It may come as little surprise that litigation has emerged in the wake of the tragic Grenfell Tower fire in London last month. Some may find it surprising, however, that among the lawsuits arising from the London building fire is a securities class action suit filed in the United States. The lawsuit is just the latest example of the follow-on securities suit, a phenomenon that, as discussed below, is one of several factors that helps explain the current elevated pace of securities class action lawsuit filings in the U.S. Continue Reading Turning Events into Securities Suits

John Stark Reed

Readers undoubtedly are aware of the recent outbreak of ransomware incidents and the problems they present. The threat of ransomware attacks poses a host of issues, among the most significant of which is whether or not ransomware victims should go ahead and make the demanded ransomware payment as the quickest way to try to recover captured systems. In the following blog post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a comprehensive look that problems involved with making payments in response to a ransomware attack. A version of this article originally appeared on CybersecurityDocket.

 

I would like to thank John for his willingness to publish his article on my 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 an article. Here is John’s guest post. Continue Reading Guest Post: Ransomware Payment: Legality, Logistics, Mitigation, and Insurance

If a D&O insurance policy exclusion precludes coverage for loss arising out of the performance of professional services, does the exclusion preclude coverage for all insureds or just the insureds who performed the services? In a July 5, 2017 opinion (here), the Eleventh Circuit, applying Florida law in a case related to the Rothstein law firm Ponzi scheme scandal, held that a bank’s D&O insurance policy’s professional services exclusion’s preclusive effect applied jointly and therefore precluded coverage for all insureds, not just for the individuals delivering the services. The decision raises some interesting issues, as discussed below. Continue Reading Professional Services Exclusion Precludes Coverage for All Insureds, Not Just Those Performing Services

Since the U.S. Supreme Court’s June 2010 decision in Morrison v. National Australia Bank, the lower courts have wrestled with the issue of whether or not the transactions at issue in a particular securities suit were sufficiently “domestic” to bring them under the U.S. securities laws. These inquiries mostly have taken place at the motion to dismiss phase. However, as demonstrated in the Second Circuit’s July 7, 2017 decision in the Petrobras securities case, the “domestic” transactions inquiry is relevant at the class certification stage as well. The appellate court held that in determining whether or not Petrobras noteholders’ claims can proceed on a class-wide basis, the district court must, in light of the federal class action procedure’s “predominance” requirement, determine whether or not common questions outweigh individual questions of transactional domesticity. The appellate court’s ruling, which can be found here, could complicate class certification in cases involving non-U.S. companies whose securities do not trade on U.S. exchanges.   Continue Reading Morrison Issues Cloud Class Certification in Petrobras Securities Litigation

Peter Gillon
Eric Gold

In the following guest post, Peter Gillon and Eric Gold of the Pillsbury Winthrop Shaw Pittman law firm take a look at one of important drop down features of Side A DIC insurance coverage, the coverage that is triggered when an underlying carrier denies coverage. I would like to thank Peter and Eric for their willingness to allow 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Peter and Eric’s guest post. Continue Reading Guest Post: The D&O Cramdown: Triggering Side A DIC Coverage When an Underlying D&O Carrier Declines Coverage

In an interesting June 23, 2017 opinion in a case raising a host of claims made date, notice of potential claims, and notice of claims issues, Western District of Tennessee Judge Sheryl Lipman, applying Tennessee law, held that a purported notice to insurers of a potential claim was insufficient to provide notice of an actual claim, therefore concluding that the defendant insurers did not have to reimburse the policyholder for its $212.5 million FHA loan violation settlement with the DOJ. The opinion provides interesting insights into the meaning of the policy term “Claim,” as well as into what is required in order to provide sufficient notice of claim. Continue Reading Purported Notice of Potential Claim Held Insufficient to Provide Notice of Actual Claim

Largely as a result of the continuing upsurge in the number of federal court merger objection lawsuits, securities class action lawsuits were filed at historic levels during the first half of 2017 and well above last year’s elevated pace. Though the number of filings in this year’s second quarter were slightly  lower than in the first quarter, the total number of filings in the first six months of the year overall were on pace for the highest annual number of securities class action lawsuits since 2001. Continue Reading First Half 2017 Securities Suit Filings Continue at Exceptional Levels

sup ct 4In the flurry of opinions and orders on Monday on the final day of the U.S. Supreme Court’s term, and amid the hubbub over the Court’s action on the Trump administration travel ban order, you might well have overlooked the fact that on Monday the Court also agreed to take up the question of whether or not the Dodd-Frank Act’s anti-retaliation provisions apply to and protect individuals who did not make a whistleblower report to the SEC. The lower courts have struggled with the question of whether or not the anti-retaliation protections extend to individuals who file internal reports within their own companies. A split on the issue has developed and now the U.S. Supreme Court will have the opportunity to address the question in the case of Digital Realty Trust v. Somers. The Court’s June 26, 2017 order granting Digital Realty Trust’s petition for a writ of certiorari can be found here. Continue Reading Supreme Court to Review Whether Dodd-Frank Anti-Retaliation Provisions Protect Internal Whistleblowers