On June 5, 2017, in an opinion written by Justice Sonia Sotomayor for a unanimous court, the U.S. Supreme Court held that the five-year statute of limitations applies to claims for disgorgement imposed as a sanction for violation the federal securities laws. The Court rejected the SEC’s argument that the statute of limitations was not applicable to claims for disgorgement. The decision provides greater certainty about the scope of potential liability for parties facing SEC liability. The decision is also important in light of the other securities law statute of limitations case that remains pending on the Court’s docket. The U.S. Supreme Court’s June 5, 2017 opinion can be found here. Continue Reading Supreme Court Holds Disgorgement Claims Subject to Five-Year Statute of Limitations
Tallinn, Estonia
The D&O Diary completed its European assignment with a final stop late last week in Tallinn, Estonia’s capital city. With a population of around 440,000, Tallinn is relatively compact. In fact, the population of the entire country of Estonia (with a total land area roughly equal to that of the states of Vermont and New Hampshire, combined) is only about 1.2 million, making it one of the smaller countries in the EU. Though Tallinn is relatively small, it is full of charm and history. Continue Reading Tallinn, Estonia
Finlandia
The D&O Diary’s current European assignment continued this past weekend with a visit to Finland’s capital city, Helsinki. With a urban area population of about 1.4 million, Helsinki is a little larger than Oslo, and at about 61 degrees northern latitude, it is a bit further north as well – which means that the sun sets even later this time of year in Helsinki than in Oslo. Also, Helsinki was a bit cooler than Oslo, as much as ten to fifteen degrees cooler each day. Continue Reading Finlandia
Guest Post: Matching Business Models and Processes with Cybercrime Insurance Programs
In the current world, cyber security is critical for every organization. Cyber insurance is an important part of every organization’s cybersecurity program. In the following guest post, a Senior Associate in D’Amato & Lynch, LLP’s Fidelity Bond Practice Group, examines how business can best match their cyber insurance to their cyber security needs. I would like to thank David for his willingness to allow me to publish his article as a guest post. 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 David’s guest post. Continue Reading Guest Post: Matching Business Models and Processes with Cybercrime Insurance Programs
May in Norway
The D&O Diary is on assignment in Europe this week, with a first stop in Oslo, Norway’s capital city, located at the northern end of Oslofjord (as shown in the accompanying picture). Oslo is a city in transformation; its urban area population has grown by over one-third since 2000, to over 1 million. At times during our visit, the city seems like a gigantic construction site. Its location at about 60 degrees northern latitude means that in late May, the sun rises just after 4 am, and the sun doesn’t set until nearly 10:30. The evening twilight lingered until well after midnight. Continue Reading May in Norway
Guest Post: SEC Enforcement Data: Midyear Review
In the following guest post, Tammy Yuen and Ted Carleton of the Skarzynski Black law firm review and analyze the May 9, 2017 Cornerstone Research report entitled “SEC Enforcement Activity: Public Companies and Subsidiaries, Midyear FY 2017 Update” (here), which details the SEC’s enforcement activity during the first half of the current fiscal year. I would like to thank Tammy and Ted 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Tammy and Ted’s guest post. Continue Reading Guest Post: SEC Enforcement Data: Midyear Review
Is Deal Litigation in Delaware Done?
As documented on this site (for example, here and here) and elsewhere, deal litigation has been shifting from Delaware Chancery Court to courts in other states and to federal courts. This shift is largely the result of two Delaware court decisions, the Delaware Supreme Court’s 2015 decision in Corwin v. KKR Financial Holdings LLC (here) and the Delaware Chancery Court’s January 2016 court decision in the In re Trulia Shareholder litigation (here). Though these court decisions are relatively recent, they are already having measurable impact on the amount of litigation in Delaware. Indeed, as detailed in a May 19, 2017 Law 360 article entitled “Delaware Plaintiffs’ Attorneys Fear Exodus of Chancery Deal Suits” (here, subscription required), the effect from these two cases has been sufficiently substantial that plaintiffs’ lawyers active in Delaware are now concerned that the future of deal litigation in Delaware is under threat. Continue Reading Is Deal Litigation in Delaware Done?
Why Are There Fewer Public Companies and How Worried Should We Be About it?
There are fewer public companies in the U.S. than there were in the nineties. Understanding the reason for the decline in the number of public companies is important to understanding whether or not the decline is a cause for concern, as well for thinking about what if anything policymakers should about it. In an interesting May 2017 paper entitled “Looking Behind the Declining Number of Public Companies: An Analysis of U.S. Capital Markets” (here), EY takes a detailed look at the drop in the number of companies listed on U.S. exchanges and examines the causes. The paper’s analysis has a number of important implications for policymakers, for investors, and for all market observers. A version of the EY paper appeared in a May 18, 2017 post on the Harvard Law School Forum of Corporate Governance and Financial Regulation blog (here). Continue Reading Why Are There Fewer Public Companies and How Worried Should We Be About it?
D&O Insurance is Important for Private Companies, Too
Executives at companies whose securities are publicly traded typically don’t need to be persuaded that their company needs D&O insurance. They understand that the exposures public companies face make D&O insurance indispensable. However, the view of some private company managers may be different, particularly for officials at companies whose shares are very closely held. These company officials may believe their company has little risk of getting hit with a D&O lawsuit and as a result conclude that they don’t need D&O insurance. However, the reality is that D&O insurance is an indispensable part of every company’s risk management arsenal, whether or not a company’s shares are listed. Continue Reading D&O Insurance is Important for Private Companies, Too
Commentary on “Winning the Securities Class Action War”
Over the last several days, Doug Greene of the Lane Powell law firm has been running a series of articles on his D&O Discourse blog asking the question “Who is Winning the Class Action War?” In the aggregate, the multi-part series provides an interesting commentary on the current state of securities class action litigation in the United States. The articles in the series are thought-provoking and provocative — apparently deliberately so — and I commend them to readers for the perspective they provide on the current state of play in securities litigation, from the outlook of an experienced defense-side securities class action litigator.
Based on my own varied experiences, I have my own perspective on some of the topics Greene discusses in his articles, which I have set out below. I want to emphasize at the outset that I am neither entirely disagreeing with nor entirely agreeing with Greene’s analysis and conclusions. I offer my thoughts here for whatever they may be worth, as part of the dialogue that Greene’s articles undoubtedly will provoke. Continue Reading Commentary on “Winning the Securities Class Action War”