As I have often noted (for example, here), a company’s announcement that it is the subject of an FCPA-related investigation frequently leads to the filing of a follow-on civil lawsuit in which investor claimants allege either that the company’s senior officials have violated their oversight duties or that the company’s public disclosure statements were insufficient in some way relating to the alleged misconduct. As I have also noted, these kinds of follow-on lawsuits, while frequently filed, often are unsuccessful.
Both of these aspects of the follow-on civil lawsuit track record are relevant in connection with the wave of litigation that has followed in the wake of the massive anti-bribery investigation in Brazil. Many of the companies caught up in the continuing anti-corruption investigation in Brazil have been hit with follow-on securities suits in the U.S. While there have been noteworthy exceptions, many of these cases have been unsuccessful. Most recently, the defendants’ motion to dismiss was granted in the anti-bribery investigation-related securities class action lawsuit that had been filed against the Brazilian airplane manufacturer Embraer. Southern District of New York Richard M. Berman’s March 30, 2018 opinion granting the motion to dismiss can be found here. The decision is interesting and it highlights many of the challenges claimants face in pursuing these kinds of claims.
Continue Reading Frequently-Filed FCPA Follow-On Securities Suits Face Formidable Obstacles