Public company D&O insurance provides coverage for “Securities Claims.” But whose securities must be involved in a claim in order for coverage to be triggered? Must the claim involve the securities of the corporate policyholder itself? Or can coverage be triggered by a claim involving mortgage-backed securities the corporate policyholder issued as part of its financial operations? Continue Reading D&O Insurance: Whose “Securities” Must a Claim Involve to Trigger Securities Claim Coverage?
Does the FDIC Target Only Failed Bank Directors and Officers That Have D&O Insurance?
Following the recent bank failure wave, the FDIC filed liability actions against the former directors and offices of many of the failed banks, as detailed here. But the FDIC did not sue the former executives of every failed bank. Why did the FDIC sue the executives of some failed banks but not others? Was it because the failed banks the agency targeted had engaged in qualitatively different conduct? Or was it merely because the ones the FDIC sued had D&O insurance in force from which the agency could extract a monetary recovery? Continue Reading Does the FDIC Target Only Failed Bank Directors and Officers That Have D&O Insurance?
There’s a Reason You Are Suddenly Hearing About the TCPA Everywhere You Go
On the panel in which I participated during last week’s PLUS D&O Symposium, one of the important topics we discussed was the question of coverage under a D&O insurance policy for claims under the Telephone Consumer Protection Act, a topic about which I have previously written on this blog. That a once-obscure statute like the TCPA has become an important topic of conversation is no accident. The fact is that the number of TCPA actions filed has absolutely exploded, as detailed in a recent study published by the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce. Continue Reading There’s a Reason You Are Suddenly Hearing About the TCPA Everywhere You Go
Spanish Class Action is the Latest Collective Investor Action Filed Outside U.S.
The filing of securities class action lawsuits is, of course, well-established in the United States, and in recent years has become a regular phenomenon in Australia and Canada as well. In the wake of various recent scandals, numerous group or mass investor actions, if not full-blown class actions, have been filed or will be filed in a number of other countries, including the U.K. (for example, in connection with the Tesco accounting scandal), Germany (in connection with the VW emissions scandal), Japan (in connection with the Toshiba scandal), Italy (in connection with the Saipem scandal), and possibly Brazil (in connection with various companies’ involvement in the Petrobras scandal).
Now it appears that investors in the troubled Spanish banking company Bankia have initiated a class action lawsuit against the company. According to news reports (here), counsel for 660 individual investors has filed an action in a Madrid court seeking to have the individuals compensated for their investment losses in connection with the company’s 2011 stock flotation. The investors collectively seek recovery of 6.3 million euros (about $7 million). Continue Reading Spanish Class Action is the Latest Collective Investor Action Filed Outside U.S.
Two German Cities in Winter
The D&O Diary is on assignment in Germany this week, with the first stop for a meeting and a short visit in the Free and Hanseatic City of Hamburg – “Free,” as a free Imperial city under the Holy Roman Empire, and “Hanseatic” for the Hanseatic League, the Northern European trading confederation in the late Middle Ages. Though Hamburg is 60 miles inland from the North Sea on the Elbe River, it is a seaport – the second largest in Europe, in fact. It remains a separate city-state within the present German federation. At 1.7 million people, it is also the second-largest city in Germany. Continue Reading Two German Cities in Winter
Delaware Chancellor Rejects Disclosure-Only Settlement, Signals What’s Next for Merger Objection Suits
In a January 22, 2016 Delaware Court of Chancery decision that likely will prove to be significant because of the light it sheds on the future of disclosure-only settlements in merger objection lawsuits in Delaware, Chancellor Andre Bouchard rejected the proposed settlement in the litigation arising out of Zillow’s acquisition of Trulia, saying that because the “none of the supplemental disclosures were material or even helpful to Trulia’s stockholder,” the proposed settlement “does not afford them meaningful consideration to warrant providing a claim release.”
In reaching these conclusions, Bouchard reviewed the dynamics that have led to the “proliferation of disclosure settlements” and the problems these kinds of settlements present. Bouchard also offered his perspective on the ways that remedial disclosure assertions in deal litigation could optimally be litigated. At a minimum, Bouchard’s opinion represents a warning to the plaintiffs’ bar that to the extent they continue to pursue disclosure settlements, they can “expect that the Court will be increasingly vigilant in scrutinizing the ‘give’ and the ‘get’ of such settlements to ensure that they are genuinely fair and reasonable to the absent class members.” Chancellor Bouchard’s January 22, 2016 opinion in the Trulia case can be found here. Continue Reading Delaware Chancellor Rejects Disclosure-Only Settlement, Signals What’s Next for Merger Objection Suits
The Game of Names
Long-time readers know that I am a huge fan of European soccer. When I have the time, there is just about nothing else that I would rather do than watch a match in one of the top leagues. Part of the reason I enjoy it so much is that the games just flow. The clock starts and play continues, without timeouts or interruptions. Quite a contrast to American football, in which eleven minutes of action are crammed into three hours of watch time. I also like the European clubs’ rivalries, their fans’ enthusiasm, and the sudden bursts of sheer athletic brilliance that frequently result in goals.
And I also like the players’ names. I know that the players are not chosen for their names, but for some reason the game attracts so many players with names that are distinctive, musical, or audacious. It starts with players like Robert Snodgrass, the Scot who now plays for Hull City in the English Championship League, and Lee Cattermole, who plays for Sunderland in the Premier League. These players’ are among those whose names I find that I can’t hear without involuntarily repeating them. Here’s what I sound like watching either of these player’s teams play: “Snodgrass!” “Cattermole!” Continue Reading The Game of Names
Why the Supreme Court’s Recent Class Action Decision is Important and What May Be Coming Next
After the Supreme Court issued its decision last week in Campbell-Ewald Co. v. Gomez (here), in at least some quarters the story about the decision spread under the heading that the Court had issued an important Telephone Consumer Protection Act ruling. The case in which the Court issued its decision does indeed involve a TCPA damages claim. However, the Court’s analysis did not address the plaintiff’s TCPA claim as such. The Court’s ruling – which addressed the issue of whether or not an unaccepted offer of judgment moots a class action plaintiff’s claim – is nevertheless important.
As discussed below, the Court’s ruling in the Campbell-Ewald case sets the stage for further litigation on the question of whether, by taking a different approach than the defendant did here, class action defendants might yet be able to moot a class action suit by “picking off” the named plaintiff’s claim. The Court’s decision in the Campbell-Ewald case may also prefigure the Court’s consideration of standing issues in the Spokeo case, another case that raises basic justiciability issues and that remains pending on the Court’s docket for this term. Continue Reading Why the Supreme Court’s Recent Class Action Decision is Important and What May Be Coming Next
Cornerstone Research: U.S.-Listed Companies’ Securities Suit Susceptibility at Record High Levels in 2015
Not only were securities class action lawsuit filings in 2015 at their highest levels since 2008, but the likelihood that a U.S.-listed company would get hit with a securities suit was at the highest level at any time since the PSLRA was enacted, according to the latest annual report from Cornerstone Research. Cornerstone Research’s report, issued in conjunction with the Stanford Law School Securities Class Action Clearinghouse and entitled “Securities Class Action Filings: 2015 Year in Review,” can be found here. Cornerstone Research’s January 26, 2016 press release about the report can be found here. My own analysis of the 2015 securities class action lawsuit filings can be found here. Continue Reading Cornerstone Research: U.S.-Listed Companies’ Securities Suit Susceptibility at Record High Levels in 2015
NERA Report: 2015 Securities Class Action Filings at Highest Level Since 2008
Securities class action lawsuit filings in 2015 were at their highest level since 2008, according to the latest annual report from NERA Economic Consulting. The report also states that not only as the number of lawsuits filed increased in 2015, but the rate of lawsuit filings relative to the number of publicly traded companies has also increased compared to historic levels as well. The report entitled “Recent Trends in Securities Class Action Litigation: 2015 Full-Year Review,” can be found here. NERA’s January 25, 2016 press release describing the report can be found here. My own analysis of the 2015 securities class action filings can be found here. Continue Reading NERA Report: 2015 Securities Class Action Filings at Highest Level Since 2008