Readers will recall that in my recent wrap-up of top D&O liability and insurance issues of 2022, I included on the list the continuing prevalence of COVID-related securities class action lawsuit filings. Now, even though the coronavirus pandemic is about to enter its fourth year, the COVID-related lawsuits continue to be filed. In the first COVID-related lawsuit filing of 2023, a plaintiff shareholder has filed a securities class action lawsuit against the vaccine development company Invivyd, Inc. (formerly known as Adagio Therapeutics, Inc.). A copy of the January 31, 2023, complaint against the company can be found here.

Continue Reading First COVID-Related Securities Suit Filing of the Year      
Jonathan Meer

In the following guest post, Jonathan Meer answers the question of how the crypto asset meltdown has translated in to D&O claims. Jonathan is a Partner in the Wilson Elser law firm’s New York office. I would like to thank Jonathan for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to the blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Jonathan’s article.

Continue Reading Guest Post: The Midas Curse? How Cryptocurrency Has Impacted Directors and Officers

The D&O Diary was on assignment this past week in the Asia Pacific region, with the first stop in the great country of Australia. It is always great to be in Australia, but the Southern Hemisphere Summer is a particularly good time to be there. After a day or two of clouds and some rain on arrival, the weather turned particularly glorious, as reflected in the pictures below.

Continue Reading Summer Down Under

According to the latest report from Cornerstone Research, the number of securities class action lawsuit filings declined slightly in 2022 relative to 2021, although the number of “core” securities suit filings increased slightly compared to 2021. The report, which is entitled “Securities Class Action Filings: 2022 Year in Review,” and which was published in conjunction with the Stanford Law School Securities Class Action Clearinghouse, notes that the number of new lawsuits involving Section 11 allegations rose 2022, likely due to the surge in IPOs during 2021. A copy of the report can be found here. Cornerstone Research’s February 1, 2023 press release about the report can be found here.

Continue Reading Cornerstone Research: Securities Suit Filings Declined in 2022

On February 8, 2023, the Securities Litigation Committee of the New York City Bar will be hosting a daylong webinar entitled Securities Litigation Enforcement Institute 2023. The webinar will be co-chaired by Greg Markel of the Seyfarth Shaw law firm and Brad Karp of the Paul Weiss law firm. This institute will consist of a number of panels covering important and interesting areas related to developments in securities litigation, derivative litigation, Delaware Law, ESG and importantly the activities of the SEC. I will be participating in a session during the Institute on the topic of Securities Litigation Filing Trends. With me on the panel, which will be moderated by Greg Markel and Brad Karp, will be Sasha Aganin of Cornerstone Research. Information about the webinar, including directions on how to register, can be found here.

Sarah Abrams

In the following guest post, Sarah Abrams, Head of Professional Liability Claims at Bowhead Specialty, takes a look at the challenges that financial trading based on Artificial Intelligence (AI) could mean for D&O, Professional, and Cyber insurers. I would like to thank Sarah for allowing me to publish her 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 Sarah’s article.

Continue Reading Guest Post: AI Financial Trading; A Brave New World for Insurers

For the second time in recent days, a court has held that a D&O insurance policy provision operates to preclude coverage for claims against an insured company and its executives that the consideration to be paid for the acquisition of the insured company is inadequate. The Seventh Circuit in a recent decision held that the “inadequate consideration” exclusion (sometimes referred to as the “bump-up” exclusion) in the applicable D&O insurance precludes coverage for a claim that disclosure in the company’s proxy statement omitted information that could have been used to negotiate a higher price. As discussed below, the policy wording at issue was relevant to the outcome. The Seventh Circuit’s January 23, 2023, opinion in the Komatsu Mining Corp. case can be found here.

Continue Reading “Inadequate Consideration” Exclusion Precludes Coverage for Underpayment of Insured Company’s Acquisition

In a shareholder claim against the former global head of HR at McDonald’s, the Delaware Chancery Court has held that liability for breach of the duty of oversight, which Delaware courts had previously extended only to corporate directors, can also extend to corporate officers, as well. In addition, in a separate part of the opinion that may not gain as much attention as the duty of oversight ruling, the same court also held that a breach of fiduciary duty claim can be alleged against an officer based on sexual harassment allegations. The court’s January 25, 2023 opinion in this case, a copy of which can be found here, is likely to be the subject of scrutiny, commentary, and controversy.

Continue Reading Breach of the Duty of Oversight Liability Extends to Officers as Well as Directors

According to the latest annual report from ISS Securities Class Action Services, there were two securities class action settlements in 2022 that were large enough to make the firm’s list of the Top 100 U.S. Securities Class Action settlements. These two settlements took place in a year in which there were a total of 141 approved monetary securities class action settlements totaling $4.77 billion. The details of the settlements included the two largest during 2022 can be found in the ISS Securities Class Action Services report entitled “The Top 100 U.S. Class Action Settlements of All-Time,” here.

Continue Reading ISS Releases 2022 Top 100 Securities Class Action Lawsuit Settlements List

Largely due to the decline in the numbers of merger objection class action lawsuit filings and a decline in the number of Rule 10b-5 filings, the number of new federal court securities class action lawsuit filings declined in 2022 for the fourth consecutive year, according to the latest annual report from NERA Economic Consulting. The report, entitled “Recent Trends in Securities Class Action Litigation: 2022 Full-Year Review” also shows that aggregate, average, and median securities class action lawsuit settlements increased in 2022 relative to 2021. NERA’s January 24, 2023, press release about the report, with a link to the full report, can be found here.

Continue Reading NERA: Securities Suit Filings Declined in 2022 for the Fourth Consecutive Year