In a ruling that could provide an important boost future consumer data breach class action litigation, the Seventh Circuit has reinstated the Neiman Marcus data breach lawsuit, ruling 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. As Alison Frankel said about the appellate court’s ruling in her July 21, 2015 post on her On the Case blog entitled “The Seventh Circuit Just Made it A Lot Easier to Sue Over Data Breaches” (here), “this is a really consequential decision.” The Seventh Circuit’s July 20, 2015 opinion in the Neiman Marcus case can be found here.
Securities Suit Against Company That Used Stock Promotion Firm Survives Dismissal Motion
As I have previously noted on this blog (most recently here), one of the more distinctive litigation phenomena in recent years has been the rash of securities class action lawsuits involved allegations that the defendant firms’ use of stock promotion firms had resulted in misrepresentations to investors. The difficulty for the plaintiffs in these cases is that under the U.S. Supreme Court’s 2011 Janus Capital Group’s decision (about which refer here), only the “maker” of an allegedly misleading statement can be held liable under Rule 10b-5, and in many of these cases it was the stock promotion firm, not the company itself, that “made” the allegedly misleading statement.
However, in a recent motion to dismiss ruling in one of these stock promotion firm securities class action lawsuit, the plaintiffs’ complaint survived the dismissal motion in part, even though the Court agreed that the company defendants could not be liable for statements “made” by the stock promotion firm. The ruling is interesting in and of itself and also for what it says about theories of liability that apparently survived the U.S. Supreme Court’s Janus ruling.
As discussed below, in a July 13, 2015 ruling, Central District of California Chief Judge George H. King, granted in part and denied in part the defendants’ motions to dismiss the securities class action lawsuit that plaintiff shareholders had filed against CytRx Corporation, certain of its officers, and its offering underwriters. A copy of Judge King’s ruling can be found here. Continue Reading Securities Suit Against Company That Used Stock Promotion Firm Survives Dismissal Motion
NERA Reports on Latest Wage and Hour Lawsuit Settlement Trends
One of the most significant areas of litigation in the employment practices liability arena has been the employee lawsuits seeking damages for employer violations of federal and state wage and hour laws. But while these kinds of lawsuits remain important, many of the trends in the settlements have shifted in the most recent years, according to a recent study from NERA Economic Consulting. The July 14, 2015 report, entitled “Trends in Wage and Hour Settlements: 2015 Update,” can be found here. NERA’s July 14, 2015 press release about the report can be found here. Continue Reading NERA Reports on Latest Wage and Hour Lawsuit Settlement Trends
Is the Dodd-Frank Whistleblower Bounty Program Gaining Momentum?
While the SEC’s Dodd-Frank whistleblower program has drawn significant attention, the fact is that the program has gotten off to a slow start. As of the end of the last fiscal year, the SEC had during the program’s history received a total of 10,193 whistleblower reports, but had made only 14 whistleblower awards. (Indeed, the agency had rejected more award requests – 19 – than awards given.) While the agency’s deliberate pace in making awards seems unchanged, the agency continues to make substantial awards and the aggregate value of the awards is gradually becoming quite considerable.
On July 17, 2015, the SEC announced yet another significant award, a $3 million award to a company insider whose information “helped the SEC crack a complex fraud.” Consistently with the law’s requirements, the agency did not disclose the name of the whistleblower or the company involved. The SEC’s July 17, 2015 press release can be found here. The redacted July 17, 2015 SEC Order determining the whistleblower award can be found here. Continue Reading Is the Dodd-Frank Whistleblower Bounty Program Gaining Momentum?
The Beginning of the End of the Merger Objection Lawsuit Curse?
One of the great curses of the corporate litigation environment in recent years has been the proliferation of merger objection suits, the incidence of which has gotten to the point that now just about every large merger deal draws at least one lawsuit, and sometimes several. However, if recent developments in the Delaware Chancery Court are any indication, the courts are as appalled by this seemingly undifferentiated mass of litigation as are the parties to the transactions. Two recent decisions may suggest that the Delaware courts, at least, are no longer willing simply to accept the standard “disclosure only” settlements that typically resolve these kinds of cases, which in turn may mean that the cases could become less attractive to the plaintiffs’ lawyers that bring these cases. Continue Reading The Beginning of the End of the Merger Objection Lawsuit Curse?
Advisen Report: Declining Corporate and Securities Litigation Filings Continued in Second Quarter, But Most Recent Quarterly Trend May be Upward
The recent annual trend toward declining numbers of corporate and securities lawsuit filings continued in the first half and second quarter of 2015, although second quarter activity did increase slightly compared to the prior quarter, according to a report from the insurance industry information firm, Advisen. If the increase in the second quarter numbers compared to the first were to continue for the remainder of the year, the number of new corporate and securities lawsuits during the year could see an annual increase for the first time in four years. The July 15, 2015 Advisen report, entitled “D&O Claims Trends: Q2 2015” can be found here. Continue Reading Advisen Report: Declining Corporate and Securities Litigation Filings Continued in Second Quarter, But Most Recent Quarterly Trend May be Upward
A Visit to Prague
The D&O Diary finished up its recent European sojourn with a weekend visit to Prague. After a four-hour train ride northeastward from Munich through forests, farm fields, and low mountains, and a final stretch through the Vltava River valley (the river is known as the Moldau in German), we reached Prague, or Praha as the city is known to the natives. The Czech Republic’s capital and largest city is a bustling river metropolis with a rich cultural heritage and a vibrant night life. Continue Reading A Visit to Prague
Munich in Summer
The D&O Diary is on assignment in Europe this week, with the first stop in the southern German city of Munich, to attend Munich Re’s Global Casualty Claims Conference. This trip represented my first ever visit to Europe during the summer months. My prior visits have all taken place during other months of the year. Here’s what I discovered about visiting Europe in July; it is a lot more comfortable walking a city in the summer warmth than in colder months, and, even more importantly, a summer visit allows for very late evenings sitting at outdoor cafes and beer gardens in the warm and comfortable twilight that does not turn to darkness until well past 10:00 pm. Continue Reading Munich in Summer
The Phones are Alive (With the Sound of Music)
By now most of you, like me, have had Apple Music downloaded on your iPhone, with the latest iOS update. Pretty presumptuous of Apple to just stick it on our phones, don’t you think? Personally I would have preferred to have been asked first. Turns out, Apple not only wants us to buy its phones, but they also want us to pay for streaming music content as well. Just to sample Apple Music during the three-month trial period, you have to select and agree to a payment plan (either individual for $9.99 a month or family for $12.99) that kicks in after the trial period ends.
I don’t know about the rest of you, but I am not willing to pay $120 a year to listen to streaming music. (Okay, okay, $119.88.) Fortunately, we don’t have to pay anything. There are a number of good free options available. The purpose of this post is to share my notes on the free music streaming sites and, I hope, to encourage others to share their own notes with me and others as well. Continue Reading The Phones are Alive (With the Sound of Music)
U.S. IPO Activity Remains at Heightened Levels in Year’s First Half
Although the IPO pace is off from last year’s sizzling levels, the number of companies completing IPOs on U.S. exchanges remains at heightened levels. In addition, the number of completed IPOs picked up as the year progressed, suggesting that IPO activity in the U.S. in the year’s second half will also be lively.
U.S. IPO activity in 2014 was at the highest levels in more than a decade, when there were a total of 275 U.S. IPOs (as discussed here). According to Renaissance Capital (here), through the first six months of 2015, there have been a total of 104 completed IPOs, which is well below the 147 completed in the first half of 2014 (representing a decline of 29%). However, other than when compared with 2014, the number of U.S. IPOs completed in the first half of 2015 is the first half total since 2004.
The pace of completed IPOs has picked up as 2015 has progressed. The number of U.S. IPOs completed in June 2015 was the highest monthly total since July 2014, and the number of IPOs completed during the week ending on June 25, 2015 was the highest weekly total since October 2014, as discussed here. Moreover, the market for IPOs appears to be quite healthy as we head into the year’s second half. Seres Therapeutics, which debuted during the week ending June 25, 2015 soared 186% on its first day of trading, the highest post-IPO pop since January 2014. Continue Reading U.S. IPO Activity Remains at Heightened Levels in Year’s First Half