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Arkady Bukh

In the following guest post, Arkady Bukh, founding partner of Bukh Law Firm, takes a look at the U.S. Supreme Court’s 2014 decision in Loughrin v. United States (here) and examines how the Court’s holding with respect to the federal bank fraud statute could reach far beyond the realm of bank fraud to reach the securities fraud arena.

 

I would like to thank Arkady 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 readers of this blog. Please contact me directly if you would like to submit a guest post.

 

Arkady’s guest post follows below. The Bukh Law Firm is dedicated solely to criminal defense. You can contact Arkady at Bukh Law Firm, P.C., 14 Wall St, New York NY 10005, (212) 729-1632, https://www.nyccriminallawyer.com

 

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Resolving a Four Way Split

The federal bank fraud statute provides: “Whoever knowingly executes, or attempts to execute, a scheme or artifice – (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned more than 30 years, or both.” 18 U.S.C. § 1344. Continue Reading Guest Post: How the Supreme Court’s Loughrin Decision May Narrow the Scope of Securities Fraud

homedepotIn early 2014, when plaintiffs initiated data breach-related derivative lawsuits against the boards of Target Corp. (here) and Wyndham Worldwide (here), there was some speculation that these cases might be the first of what could become a wave of data-breach related D&O lawsuits. But then the Wyndham Worldwide case was dismissed (refer here) and no new data breach-related D&O lawsuits followed, even though there were several high profile data breaches after that time (including Sony Entertainment, Anthem and Home Depot). Although many predicted that more D&O lawsuits were to come, the suits themselves did not materialize. There were, however, some suggestions that a lawsuit against Home Depot might eventually arrive, as a plaintiff initiated a books and records action in Delaware Chancery Court against the company.

 

The wondering and waiting about whether or not there will be a Home Depot data breach-related D&O lawsuit is now over. A Home Depot data breach-related shareholder’s derivative lawsuit has been filed in the Northern District of Georgia. On September 2, 2015, a plaintiff shareholder filed a redacted complaint in a lawsuit against Home Depot, as nominal defendant, and twelve Home Depot directors and officers, alleging that the defendants breached “their fiduciary duties of loyalty, good faith, and due care by knowingly and in conscious disregard of their duties failing to ensure that Home Depot took reasonable measures to protect its customers’ personal and financial information.” The redacted version of the plaintiff’s complaint can be found here. (Please see below for further explanation about the timing of the filing of the plaintiff’s lawsuit and the redactions to the complaint.) Continue Reading Data Breach-Related Derivative Lawsuit Filed against Home Depot Directors and Officers

lookoutEvery year just after Labor Day, I take a step back and survey the most important current trends and developments in the world of Directors’ and Officers’ liability and D&O insurance. This year’s survey is set out below. Once again, there are a host of things worth watching in the world of D&O. Continue Reading What to Watch Now in the World of D&O

wywoSeptember is here. Labor Day has come and gone. That can mean only one thing – time to put away the surf boards, bungee cords, fencing foils, pogo sticks, nunchuks, hula hoops, light sabers, and unicycles, and get back to work. Yes, it is time to answer all those emails and return all of those phone messages. And most important of all, it is time to catch up on what has been happening in the world of directors’ and officers’ liability and insurance. Here is what happened while you were out. Continue Reading While You Were Out

2015-08-30 12.32.59.aThere are those who prefer to live in warmer climates, where the cold winds of winter never blow. During the last two exceptionally  frigid winters back home in Ohio, I certainly daydreamed about what it might be like to live in a place without ice and snow. But while I can see the appeal of living in a land of eternal summer, there is something about the change of seasons that I know I would miss. When you have spent the summer months in Northern Michigan walking on the shores of a vast body of water like Lake Michigan, you experience the season vividly – and you sense the season drawing to a close as well. The angle of the sun and the shortening days, the changing colors of the tree leaves and dune grass, even the movements and behavior of the animals all signal that the season is coming to an end. Continue Reading Season’s End Serenade

micah skidmore
Micah Skidmore

As I discussed in a recent post, on July 20, 2015, the Seventh Circuit issued its opinion in the Neiman Marcus consumer data breach class action lawsuit. In its opinion (a copy of which can be found here), the appellate court ruled that the district court erred in concluding that the plaintiffs’ fear of future harm from the breach was insufficient to establish standing to pursue their claims. The court held that the impending injuries alleged were sufficient to support Article III standing.

 

In the following guest post, Micah Skidmore of the Haynes and Boone law firm takes a closer look at the decision and discusses some important insurance coverage issues that the court’s ruling about future injuries may present.

 

I would like to thank Micah for his willingness to publish his article on my 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 Micah’s guest post.

 

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The recent Neiman Marcus decision from the Seventh Circuit has lowered the bar for plaintiffs suing in the wake of a data breach.  In addition to actual injury, future “impending” injuries substantiated by an “objective,” “substantial risk of harm” and actual costs incurred to prevent or mitigate “imminent” harm are sufficient to support Article III standing.  While the Neiman Marcus decision may provide some clarity regarding standards of pleading and liability (at least for plaintiffs), for those defendants reliant on network security/privacy liability insurance to protect against data breach claims, the opinion prompts an urgent question: does my policy cover liability for future injuries and preventive measures? Continue Reading Guest Post: Coverage for Future Injuries: Is Your Cyber Policy Up To The Neiman Marcus Challenge?

cyberspaceMany observers, including even this blog, have speculated whether the rising wave of data breaches and cyber security attacks will result in litigation against the directors and officers of the affected companies. Indeed, in 2014, there were two sets of lawsuits filed against the boards of companies that had experienced high-profile data breaches, Target Corp. (refer here) and Wyndham Worldwide (refer here). But the Wyndham lawsuit was dismissed in late 2014, and since that time there really have been no additional significant cyber security related D&O lawsuits filed, even though there have been a number of high profile data breaches in interim (including, for example, Home Depot, Anthem and Sony Entertainment). However, as discussed below, there have been  a couple of recent developments suggesting that the plaintiffs’ lawyers are working along the edges of this issue, and, at a minimum, looking for ways to develop D&O claims out of data breach incidents. Continue Reading When Data Hacks Lead to D&O Lawsuits, Actual and Threatened

doleA frequent theme these days in the world of corporate and securities litigation is the complaint about merger objection litigation – how virtually every deal announced attracts at least one lawsuit, and how all too often the cases are resolved on the basis of a disclosure-only settlement and the payment of the plaintiffs’ attorneys’ fees, an arrangement that produce no benefit for anyone except the lawyers. However, a recent Delaware Chancery court post-trial opinion provides a sharp reminder that some merger transactions can include some real problems. Continue Reading A Closer Look at the Massive $148 Million Damages Award Against Dole’ s CEO and General Counsel

gunsofaLast August, in conjunction with the centennial of the start of World War I, I re-read Barbara Tuchman’s classic account of the war’s first days, The Guns of August. Tuchman is a great writer and she tells the story of the war’s first weeks well. One thing she captures particularly well is the way that poor military planning based on fatally flawed assumptions brought on catastrophes that affected all of the combatants.

 

Unfortunately, Tuchman’s book has some flaws and some critical omissions. Tuchman is a great story-teller, but all too often her desire to tell the story interferes with her account. There are too many sentences like this one, relating to Belgium’s war minister: “Baron de Broqueville, Premier and concurrently War Minister, entered the room as the work concluded, a tall, dark gentleman of elegant grooming whose resolute air was enhanced by an energetic black mustache and expressive black eyes.” Maybe it is just me, but when a war looms, the minister’s grooming, moustache and eyes are hardly relevant. Even if his mustache was — as improbable as it seems – “energetic.”

 

And whether or not you like the way she tells the tale, the problem is that her rendition is hollow at its core. Although Tuchman dutifully recites Bismarck’s famous quip that “some damn foolish thing in the Balkans”  will start the next war,  and although she dutifully if tersely recounts how the assassinations of the heir presumptive to the Austro-Hungarian throne, Franz Ferdinand, and his wife, Sophie, triggered the war, she does not explain why the events in the Balkans threatened war so portentously, as Bismarck predicted, or even why the assassination of an Austrian Archduke would provoke a war that drew all of the major powers into what became at the time the most destructive war that the world had ever seen. Indeed, though she does a great job detailing the flaws of the various combatants’ war plans, she does little to explain why they were preparing for war in the first place and why all of the major powers viewed war as inevitable.

 

So, after finishing Tuchman’s book, I set out on what has proven to be a year of reading to try to gain a better understanding of what happened and why. Continue Reading The Great War: A Book List

paperstackRepresentations and warranties insurance has been around for years, but it is becoming an increasingly important part of M&A transactions, according to an August 24, 2015 Law 360 article (here). According to the article, more buyers are “embracing representations and warranties insurance” in order to “stand out in crowded auctions,” particularly where the seller is a private equity firm. The insurance product is “increasingly deemed a prerequisite toward sealing middle-market deals.” Continue Reading Reps and Warranties Insurance: Increasingly Indispensable Part of M&A Deals