Collective investor actions

The directors’ and officers’ liability environment is always changing, but 2021 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2022 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2021, with a focus on the future implications. Please note that on Thursday, January 13, 2022 at 11:00 AM EST, my colleague Marissa Streckfus and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2021. Registration for the webinar can be found here. I hope you will please join us for the webinar.
Continue Reading The Top Ten D&O Stories of 2021

On November 12, 2021, a Chinese court entered a 2.46-billion-yuan ($385.26 million) verdict in a collective investor action against Kangmei Pharmaceuticals, certain of the company’s executives and the company’s outside auditor. The action was the first of its kind in China. The claimants in the case had alleged that the company had engaged in massive accounting fraud by inflating its revenues, profits, and cash. The verdict in the case follows a July 2021 public hearing in the case. A copy of a November 12, 2021 Global Times article about the verdict can be found here. A November 12, 2021 Reuters article about the verdict can be found here.
Continue Reading First-Ever Chinese Collective Investor Action Results in $385 Million Damages Verdict

Arati Varma
Ian Roberts

In the following guest post, Arati Varma and Ian Roberts take a look at the evolving risk of securities class actions in South East Asia. Arati Varma is Head of Financial, Professional, and Casualty Lines, Asia, for QBE, based in Singapore. Ian Roberts is the Managing Partner of Clyde & Co’s Singapore office and leads their regional insurance practice. A version of this article previously was published in the Q3 2020 PLUS Journal. I would like to thank Arati and Ian for allowing me to publish their 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 Arati’s and Ian’s article.
Continue Reading Guest Post: Securities Class Action Risk in South East Asia

As I have noted in prior posts (most recently here), one of the more interesting and noteworthy developments in recent years has been the rise of collective investor actions outside the United States. A recent white paper published by Allianz Global Corporate & Specialty SE in collaboration with the Clyde & Co law firm entitled “Collective Actions and Litigation Funding and the Impact on Securities Claims: A Global Snapshot” takes a detailed look at the spread and development of collective investor actions – including, in at least some jurisdictions, securities class actions – against corporations and their directors and officers and the interrelation between this development and litigation funding. The report also includes a detailed picture of the status of collective actions and litigation funding in 28 different countries. The white paper can be found here.
Continue Reading A “Snapshot” of the Global Rise of Collective Investor Actions

Securities class action litigation has been an important part of the corporate and securities litigation environment in the United States and Canada for many years. What has been interesting in more recent years has been the steady rise of collective investor actions outside North America. As these various claims have accumulated, a number of them have developed into significant settlements, as documented in a recent report. ISS Securities Class Action Services has published an interesting report entitled “The Top 25 Non-North American Settlements: Largest Securities-Related Settlements Outside of North America of All-Time” (here) detailing the largest collective investor action settlements in Europe, Australia, and Asia.
Continue Reading The Top 25 Securities-Related Settlements Outside of North America

One of the most interesting and significant developments in the corporate and securities litigation arena has been the rise of collective investor litigation outside the United States, as I have discussed in prior posts. This rising tide of litigation has not only included increased numbers of legal actions in a number of different jurisdictions but also has included several substantial settlements, including among others the massive settlements in the Fortis case and in the RBS case. In an updated report July 2019 report entitled “Global Securities Litigation Trends: July 2019 Update” (here), the Dechert law firm takes a detailed look at the “sea change” that has taken place in collective investor litigation in recent years, as a result of which, according to the report, we have entered “a new era of global securities litigation.”
Continue Reading More About the Global Rise in Collective Investor Actions

As I have previously noted on this blog (most recently here), one of the most significant recent developments in the D&O claims arena has been the global rise of collective investor actions. One factor in this development in Europe has been the non-binding 2013 Collective Redress Recommendation, in which the European Commission recommended that each of the EU’s 28 member states adopt collective redress mechanisms. Many of the member states have now adopted some form of collective redress but the approaches the various states have taken are not uniform.

In an October 24, 2017 publication entitled “Collective Redress Tourism: Preventing Forum Shopping in the EU” (here), the U.S. Chamber of Commerce Institute for Legal Forum asks whether the diversity of procedures adopted, and in particular the diversity of safeguards the member states have put in place, along with litigants’ relative freedom to choose between jurisdictions, has led to potentially detrimental forum shopping. The publication raises a number of interesting questions, which I discuss below.
Continue Reading Has the Rise of Collective Investor Actions in Europe Led to Forum Shopping?

RBSIn the latest signal of the increasing significance of collective investor actions outside of the U.S., on December 5, 2016, Royal Bank of Scotland agreed to pay £800 million ($1 billion) in a settlement with three of the five investor claimant groups that had sued the bank in the U.K. for alleged misrepresentations in connection with its £12 billion pound fundraising effort just months before the British government bailed out the bank. The case will go forward as to the remaining claimant groups, with whom the bank will now attempt to reach a settlement. If the bank is unable to settle with the remaining claimant groups, the case could proceed to trial in March 2017. The partial settlement is by far the largest collective investor action recovery in the U.K. RBS’s December 5, 2016 SEC filing to which its press release announcing the partial settlement is attached can be found here. A December 5, 2016 Reuters article describing the settlement can be found here.
Continue Reading RBS Reaches $1 Billion Partial Settlement of Credit Crisis-Related Collective Investor Action

Europe-Countries-MapIn numerous recent posts, I have noted the global rise of investor collective actions (refer for example here). These lawsuits, which take a variety of different forms according to the applicable forum laws, have been filed in a number of different countries. Among other regions that have seen a recent rise in this type of litigation is Europe. In an interesting November 16, 2016 publication entitled “Rise of European Shareholder Class Action? (here), AIG Europe takes a look at the recent rise of collective investor actions, noting among other things that these types of actions are “on the rise in Europe” as a result of “a number of converging factors.”
Continue Reading The Rise of Collective Shareholder Actions in Europe

globe2As I have previously noted on this site, the rise of third-party litigation funding is one of the most significant and potentially consequential development in the global litigation arena. But because of differences in countries’ legal systems, the escalation of litigation funding means and will mean different things in different jurisdictions. In an interesting November 10, 2016 Law 360 article entitled “U.S. vs. The Rest: Litigation Funding’s Local Characteristics” (here, subscription required), Noah Wortman of the Goal Group of Companies and Jeremy Marshall of Bentham Europe Ltd. suggest that the rise of litigation funding has had and will continue to have important consequences in the litigation arena, but those consequences differ and will differ due to important differences in the litigation environment in the various countries. The authors’ comments include some interesting insights into litigation funders’ investment goals.
Continue Reading As Litigation Funding Rises Globally, Important Local Differences Affect its Impact