It has been nearly six years since the U.S. Supreme Court’s landmark 2010 decision in Morrison v. National Australia Bank, in which the Court restricted the ability of shareholders of non-U.S. companies who purchased their shares outside the U.S. to file securities fraud lawsuit in U.S. courts under the U.S. securities laws. In the intervening years, many of the issues questions that the Morrison decision presented have been resolved by the lower courts. However, one issue that has continued to percolate is the question of whether under Morrison the U.S. securities laws apply to transactions involving foreign companies’ unsponsored ADRs traded over-the-counter (OTC) in the U.S.
These issues were presented in the class action lawsuit filed in June 2015 in the Central District of California against Toshiba Corporation. The consolidated lawsuit purported to be filed on behalf of a class of investors who purchased unsponsored Toshiba American Depositary Shares (ADS) over-the-counter in the U.S., as well as on behalf of investors who purchased Toshiba shares on the Tokyo stock exchange. In an interesting May 20, 2016 opinion (here), Central District of California Judge Dean Pregerson held under Morrison that the U.S. securities laws do not apply to unsponsored OTC transactions in Toshiba’s ADSs. Judge Pregerson also granted the defendants’ motion to dismiss the claims of the investors who purchased Toshiba shares on the Tokyo stock exchange. Continue Reading Under Morrison, U.S. Securities Laws Don’t Apply to Toshiba’s Unsponsored ADRs Purchased OTC in the U.S.
The D&O Diary was on assignment in Canada last week for meetings and to attend a PLUS Canadian Chapter event in Montréal. It was a short sunlit visit to our Northern neighbor, but it was just long enough for a bit of foreign adventure without even leaving the Eastern Time zone. 
While financial fraud has always been an important enforcement target for the SEC, the agency recently has shown increased attention to financial reporting cases. In the following guest post, Robert F. Carangelo, Paul A. Ferrillo and Andrew Cauchi of the Weil Gotshal law firm take a look at the SEC’s recent focus on financial reporting and the particular issues that have drawn the agency’s scrutiny. I would like to thank Rob, Paul and Andrew for their willingness to publish their article 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 the authors’ guest post. 
Among the decisions that the Supreme Court issued this past Monday was its unanimous ruling in Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning (
In a closely-watched case, the U.S. Supreme Court held that to establish standing to sue, a claimant who alleged that inaccurate information on the Spokeo website about him violated the Fair Credit Reporting Act must show that the supposed FCRA violation caused him “concrete” harm. Defense-side advocates had hoped that the Court would strike down the plaintiffs’ claims in the case and help stem the flow of proliferating “no injury” class action litigation under the FCRA and other federal statutes such as the TCPA and the ADA. However, the Court’s did not strike down the plaintiffs’ claim, but instead remanded the case for the Ninth Circuit to determine whether or not the claimant’s allegations met the “concrete harm” requirements to establish standing. Though the holding is narrow, there is language in the Court’s opinion that may prove helpful for defendants in other cases. A copy of the Court’s May 16, 2016 opinion in Spokeo, Inc. v. Robins can be found 
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I started The D&O Diary with my first blog post on May 10, 2006. Ten years later, I am about to celebrate the blog’s tenth anniversary. It has been a great ten years for me, and to celebrate the milestone, I have posted this special tenth anniversary issue. Following a brief reflection below on ten years of blogging, I have posted three lists: a list of frequently asked questions; a list of my top ten favorite noninsurance-related posts; and a list of my top ten favorite travel post pictures. In addition, to allow everyone to be a part of the celebration– and even more importantly, to ensure that everyone reads this post all the way to the end– I have also included a special Tenth Anniversary offer to readers.