One of the characteristic securities litigation patterns for many years has been that lawsuit filings tend to come in distinctive waves, in which specific sectors get hit with a series of securities suits or companies engaging in certain types of conduct or business practices attract securities litigation. The lawsuits arising out of the dot-com crash and the options backdating scandal are examples of these kinds of litigation patterns. Over the last several weeks, a different industry sector pattern has emerged. The poultry production industry, which recently has been the target of private antitrust litigation, has now been hit with a string of follow-on securities class action lawsuits as well. These lawsuits represent one of the more distinctive securities litigation filing patterns this year. Continue Reading Poultry Producers Hit with Antitrust Suits, Follow-on Securities Litigation
Investors File U.K. Financial Misrepresentation Claim Against Tesco
A group of 124 institutional investors have joined a claim filed in London’s high court on October 31, 2016 against Tesco seeking damages for the company’s alleged financial misrepresentations. The claim, which seeks over £100 million in alleged damages, was filed on the investors’ behalf by the Stewarts law firm, and is supported by Bentham Europe Limited, an affiliate of Australian group IMF Bentham, a funding litigation firm whose shares are publicly traded on the ASX. Continue Reading Investors File U.K. Financial Misrepresentation Claim Against Tesco
N.Y. Top Court Rules Litigation Finance Transaction Violates Champerty Doctrine
One of the important factors behind the recent rise of third-party litigation financing has been the view in many jurisdictions that litigation finance does not violate ancient prohibitions against “champerty” – that is, the investment by an uninvolved third-party in a lawsuit with the intent of sharing in any recovery. As I discussed in a recent post, the general view is that litigation funding arrangements are not champertous as long as the plaintiff continues to control the litigation.
However, in a recent decision, the New York Court of Appeals (the state’s highest court) held that a financial transaction in which the plaintiff had purchased securities for the purpose of filing suit violated New York’s champerty statute. The Court also ruled that the transaction did not come within the statutory safe harbor for larger financial transactions. The appellate court’s ruling on the champerty issue is interesting, but its discussion of the safe harbor provisions – which likely would protect most conventional litigation finance arrangements – may be the more significant part of the court’s decision. Continue Reading N.Y. Top Court Rules Litigation Finance Transaction Violates Champerty Doctrine
Failed Bank Litigation: Jury Returns $5 Million Verdict Against Failed Bank’s Former Directors
On October 25, 2016, in one of the few failed bank lawsuits remaining from the bank failure litigation wave that followed the global financial crisis, and one of the very few failed bank lawsuits to go all the way to trial, a civil jury returned a verdict of $4.98 million in the Northern District of Georgia against several former directors and officers of the failed Buckhead Community Bank of Buckhead, Georgia. While the jury returned a verdict in favor of the FDIC as receiver of the failed bank on four of the loans at issue in the case, the jury found the defendants not liable for six other loans for which the FDIC sought recovery. Continue Reading Failed Bank Litigation: Jury Returns $5 Million Verdict Against Failed Bank’s Former Directors
Thinking About the Duty to Cooperate
Most liability insurance policies have provisions stating that the insured has a duty to cooperate with the insurer in the investigation and defense of a claim. In most claims situation, this requirement is not an issue. From time to time, however, questions arise whether or not the insured has fulfilled its duty to cooperate. Questions also arise whether or not the insurer’s conduct (or lack thereof) excuses the insured from the duty to cooperate. Two recent decisions from the Eleventh Circuit, one applying Florida law and one applying Georgia law, involved cases in which the insurer contended that it was relieved of its obligations under the relevant policy because the insured had breached its duty to cooperate. In both cases, the appellate court held that the insureds had breached their duties. The cases provide something of a roadmap for insureds to follow in avoiding challenges based on alleged breaches of the duty to cooperate. Continue Reading Thinking About the Duty to Cooperate
PLUS Chapter Event in Los Angeles
On October 20, 2016, I was privileged to be able to moderate the educational session at a PLUS Southern California Chapter workshop event in Los Angeles. The title of the event was “Trump vs. Clinton: The Impact of the 2016 Election on EPLI & Cyber Liability.” The session was both informative and entertaining and I very much enjoyed being a part of it. Continue Reading PLUS Chapter Event in Los Angeles
Guest Post: U.S. Parent Company Enters U.K.-Style Deferred Prosecution Agreement for Bribery
Deferred prosecution agreements have long been a part of the U.S. criminal enforcement environment, but they are relatively new in the United Kingdom. In addition, as the U.K. has begun to adopt the use of deferred prosecution agreements, it has adopted the agreements to its own system and legal requirements. In the following guest post, Francis Kean of Willis Towers Watson takes a look at a recent U.K. deferred prosecution agreement, relating to bribery allegations involving a U.K.-based subsidiary of a U.S. company. Francis notes a number of interesting features of the agreement and discusses its implications. Francis’s article previously appeared on the Willis Towers Watson Wire blog (here). 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article. Continue Reading Guest Post: U.S. Parent Company Enters U.K.-Style Deferred Prosecution Agreement for Bribery
Guest Post: “New India”
No doubt like a number of you, I read Kevin’s blog on his recent travels to India with interest. As a first generation British Indian I was as unfamiliar with India as Kevin was, until the age of 13 when I first visited India with my parents, and I too was overwhelmed with the poverty, the amount of people, the traffic, the colours, the spices, the lack of order (which as a Brit totally unnerved me!), yet amazed how with such craziness India still functioned and things got done. Continue Reading Guest Post: “New India”
D&O Insurance: Is a Software Audit Demand a “Claim”?
A standard D&O insurance policy provision specifies that the term “Claim” means, in part, a “written demand for monetary damages or non-monetary relief.” A recurring question that arises under this language is: what exactly is “non-monetary relief”? In a recent case, an Ohio intermediate appellate court considered the question whether a demand for a software audit from a software industry group alleging unauthorized software copying constituted a written demand for non-monetary relief; the court concluded that it did and that it therefore that the demand represented a claim under the applicable D&O policy. The court also considered the applicability of the policy intellectual property (IP) infringement exclusion. A copy of the Ohio Court of Appeals, Third Appellate District’s October 11, 2016 opinion can be found here. Continue Reading D&O Insurance: Is a Software Audit Demand a “Claim”?
The Yates Memo and Civil Liability for Corporate Directors and Officers
It has now been over a year since the U.S. Department of Justice released the so-called Yates Memo, in which the agency stated its policy focused on individual accountability for corporate wrongdoing. As attorneys from the McDermott, Will & Emery firm noted in an October 11, 2016 post on the Harvard Law School Forum on Corporate Governance and Financial Regulation blog (here), since the Yates Memo went into effect, observers have been watching for “telltale signs of whether the Yates Memo is really changing the way federal enforcement does business.” According to the blog post, two recent False Claims Act settlements that required corporate executives to make substantial monetary contributions to resolve civil enforcement actions filed against them may suggest that the anticipated Yates Memo-related change has arrived. Continue Reading The Yates Memo and Civil Liability for Corporate Directors and Officers