As I have noted on this site, even though it has now been nearly 22 months since the initial coronavirus outbreak in the U.S., coronavirus D&O lawsuits have continued to be filed continuously since the initial outbreak. Coronavirus-related securities suits were in fact a significant securities litigation phenomenon in 2021 as well as in 2020. In an early sign that the coronavirus related litigation could remain a significant securities litigation factor in 2022, late last week plaintiffs’ lawyers filed two new securities lawsuits against a health insurance and services company and against a diagnostic testing company. Both companies had completed IPOs earlier in 2021. A copy of the new securities lawsuit against Bright Health Group can be found here and a copy of the new securities suit against Talis Biomedical Corporation can be found here.
Continue Reading First Coronavirus-Related Securities Suits of 2022 Filed

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

In an opinion written in unusually direct language, a federal district court has denied the motion to dismiss in a coronavirus-related securities class action lawsuit filed against a vaccine development company. However, the motion to dismiss was granted with leave to amend as to the vaccine company’s major outside shareholder. The significant context of the pandemic itself and the swirl of media coverage surrounding it proved to be a significant factor in the court’s denial of the motion to dismiss as to the company defendants. The court’s December 22, 2021 opinion in the Vaxart securities litigation can be found here.
Continue Reading Coronavirus-Related Securities Suit Against Vaccine Company Survives Dismissal Motion

As I monitored the coronavirus-related securities litigation as it has been filed since March 2020, I had observed that the cases generally fell into one of three categories: cases involving companies that had experienced a coronavirus outbreak in their facilities; companies that had claimed that they would be able to profit from the pandemic; and companies whose operations or finances were disrupted by the pandemic. Over the last several weeks, I have observed a new coronavirus-related variant, a fourth category of cases involving companies that had prospered at the outset because of pandemic restrictions, but whose fortunes ebbed as pandemic restrictions eased. Now, two more of these “fourth category” variant cases have been filed, one involving Docusign and one involving Chegg, as detailed below.
Continue Reading Two New Cases of the Latest Coronavirus-Related Securities Suit Variant Filed

Among the significant constraints in the current business and financial environment is the continuing disruption of corporate supply chains. The disruption is a side-effect of the pandemic that has been exacerbated by weather events and other developments. I have been concerned that supply-chain disruption could not only interfere with ongoing business operations but could, for companies experiencing significant setbacks, lead to D&O claims, including securities class action lawsuits. There have in fact been prior securities suits filed this year arising out of supply chain issues.

The latest securities suit to reflect this phenomenon is the securities class action lawsuit filed on December 14, 2021 against bed and mattress manufacturer Sleep Number Corporation, whose supply sources for mattress foam was disrupted by the Texas winter storms earlier this year. This latest lawsuit illustrates how supply chain issues can translate into D&O claims. As discussed below, this new lawsuit raises a number of interesting questions about possible future claims.
Continue Reading Supply Chain Disruption Leads to Securities Suit Against Mattress Manufacturer

As I have noted in prior posts (most recently here), since the outbreak of the coronavirus in the U.S. last March plaintiff shareholders have filed numerous COVID-19-related securities class action lawsuits. Relatively few of these cases have reached the motion to dismiss stage, but the few dismissal motion results so far are decidedly mixed, at best, from the plaintiffs’ perspective. In the latest of these cases to fail to survive the initial pleading hurdle, the court in the COVID-19-related securities suit against biopharma firm Sorrento Therapeutics has granted the defendants’ motion to dismiss, albeit with leave to amend. The court’s November 18, 2021 order can be found here.
Continue Reading COVID-19-Related Securities Suit Against Biophama Company Dismissed

In recent posts (here and here), I have discussed new lawsuits that represent interesting new variants of coronavirus-related securities class action claims; these new kinds of suits involve defendant companies whose fortunes had prospered at the outset of the pandemic but that later saw their financial performance  decline after the initial surge eased. In the latest example of this new variant on the pandemic-related securities litigation theme, a plaintiff shareholder has filed a securities lawsuit against computer networking firm, Citrix Systems. The complaint alleges that the company misled investors about the company’s ability to initial short-term business success as the pandemic evolved. A copy of the plaintiff’s November 19, 2021 complaint can be found here.
Continue Reading Shareholder Files New Pandemic-Related Litigation Variant Suit Against Citrix Systems

With the passage of time, the impact of the pandemic on business and commerce has evolved, both at the level of the economy as a whole and at the company-specific level. Companies that suffered early in the outbreak are now returning to form, while companies that prospered due to pandemic-related conditions are now returning to earth. One company that unquestionably flourished at the outbreak of the pandemic is home exercise equipment company, Peloton Interactive. The company’s share price has recently declined as the company has experienced declining demand for its products and services.   A new COVID-related securities lawsuit has now been filed against the company, based on allegations pertaining to the company’s alleged misrepresentations about the company’s ability to sustain its pandemic-related sales boost. A copy of the November 18, 2021 related securities suit can be found here.
Continue Reading Shareholder Sues Peloton in COVID-Related Securities Suit

Just as the coronavirus pandemic itself continues to disrupt economic and social activity, it also continues to generate COVID-related securities class action litigation. In the latest COVID-related securities suit, the vaccine development firm Novavax has been hit with a securities suit pertaining to delays the company has experienced regarding its coronavirus vaccine candidate. As discussed below, this latest lawsuit shares a number of features with other previously filed coronavirus-related securities suit. The November 12, 2021 complaint in the new Novavax lawsuit can be found here.
Continue Reading Vaccine Development Firm Hit with COVID-Related Securities Suit

An online event firm that experienced a ramp-up in users during the pandemic and that completed an IPO in early in February 2021 has been hit with a securities class action lawsuit after the company disclosed that many of the customers that signed on during the early days of the pandemic did not renew or renewed only at lower service levels. This new lawsuit is the latest of example of the ways that more than a year and half in the pandemic continues to affect businesses and continues to lead to securities class action litigation and other D&O claims. The November 3, 2021 complaint filed against ON24 can be found here.
Continue Reading Online Event Firm Hit with Post-IPO COVID-Related Securities Suit