follow-on civil litigation

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In prior posts, I have noted the phenomenon of securities class action lawsuit filings following in the wake of antitrust enforcement actions (most recently here). A new securities lawsuit filed just before year-end presents an interesting new variation on this sequence. The new lawsuit, filed against both Capri Holdings Limited and Tapestry, Inc., two high-fashion firms, and certain of their executives, relates back to an enforcement action the FTC filed against the firms to block their plans to merge. As discussed below, the lawsuit involves several interesting features. A copy of the plaintiff’s December 23, 2024, complaint can be found here.Continue Reading Securities Suit Follows After Antitrust Ruling Bars Firms’ Merger Plans

As I have previously noted on this site (for example, here), a long-standing and frequently recurring litigation pattern has been the filing of a corporate or securities lawsuit in the wake of an antitrust enforcement action. In the latest example of this pattern, the card payment processing company Visa has been hit with a securities class action lawsuit after the DOJ launched an antitrust enforcement action against the company in September. There are several interesting features to this new lawsuit, as discussed below. The November 20, 2024, complaint against Visa can be found here.Continue Reading Antitrust Enforcement Action Against VISA Leads to Follow-On Securities Suit

All eyes have recently been focused on the U.S. Department of Justice’s announcement of its new corporate whistleblower awards program. The DOJ’s program potentially could have a significant impact on future corporate crime prosecutions, but meanwhile the Securities Exchange Commission’s whistleblower program has been up and running for years and indeed just passed the thirteenth…

On September 28, 2023, the SEC announced that it had filed charges against and entered into a settlement agreement with the Illinois electric utility Commonwealth Edison (ComEd) and its corporate parent Exelon Corporation in connection with an alleged scheme to influence the then-speaker of the Illinois House of Representatives, Michael Madigan. The SEC separately filed a complaint against ComEd’s former CEO in connection with the same allegations. In an October 12, 2023 post on the Cooley law firm’s PubCo blog (here) Cydney Posner wrote about the SEC enforcement actions and raised the interesting question of whether Political Corruption is Securities Fraud? It is a question well worth asking. However, as I discuss below, there is a long-standing connection between corruption and bribery allegations and securities class action lawsuits and other types of claims.Continue Reading Can Corrupt Political Activities Support Securities Fraud Allegations?

Long-time readers know that a litigation phenomenon on which I have frequently commented is the filing of securities class action lawsuits in the wake of antitrust enforcement actions. These follow-on civil actions represent something of a translation of an antitrust matter into a securities lawsuit. In the latest example of this phenomenon, a plaintiff shareholder has filed a securities suit against the concert company Live Nation following news reports of an imminent U.S. Department of Justice antitrust lawsuit against the company and its ticketing service Ticketmaster relating to allegations that the concert company pressures clients to use the ticketing service. The new lawsuit raises a number of interesting issues, as discussed below. A copy of the August 4, 2023 complaint can be found here.Continue Reading Antitrust Enforcement Leads to Follow-On Securities Suit Against Live Nation

One trend I have noted on this site in recent years is the proclivity of plaintiffs’ lawyers to file securities class action lawsuits or shareholder derivative lawsuits in the wake of antitrust regulatory or enforcement actions. These kinds of lawsuits tend to cluster in specific industries as antitrust enforcement authorities concentrate on alleged anticompetitive behavior in those sectors. One industry that recently was the focus of both regulatory action and securities litigation is the poultry production industry.

As discussed here, beginning in 2016 companies in this industry that found themselves the subject of antitrust enforcement actions were hit with follow on securities litigation. In connection with one of those suits involving poultry producer Pilgrim’s Pride the court recently granted the defendants’ motion to dismiss. Both the lawsuit and the court’s ruling are significant given the current Presidential administration’s ramped-up antitrust enforcement approach and the possibility for resulting follow-on D&O claims. The Court’s March 8, 2022 order in the Pilgrim’s Pride case can be found here.
Continue Reading Antitrust Enforcement Follow-On Securities Suit Against Pilgrim’s Pride Dismissed

As reflected in their January 18, 2022 stipulation of settlement, the parties to the consolidated Teva Pharmaceutical Industries securities class action litigation have reached an agreement to settle the case for a payment of $420 million. The settled claims relate to underlying allegations concerning price-fixing in connection with the company’s generic drug products. According to the statements of a company spokesperson, the “vast majority” of the settlement amount will be funded by the company’s D&O insurers. The settlement is subject to court approval. A copy of the parties’ January 18, 2022 stipulation of settlement can be found here.
Continue Reading Teva Settles Price-Fixing-Related Securities Class Action Litigation for $420 Million

As I noted in a prior post, last week the SEC filed an enforcement action against Stable Road Acquisition Corp., a special purpose acquisition company (SPAC), and its intended merger target, Momentus, relating to Momentus’s alleged misrepresentations, as well as Stable Road’s alleged lack of due diligence. Perhaps inevitably, a plaintiff shareholder has filed a securities class action lawsuit against Stable Road; Momentus; and other defendants, adding to the growing number of SPAC-related securities suits that have been filed this year. A copy of the July 15, 2021 complaint in the new securities lawsuit can be found here.
Continue Reading SPAC Subject to SEC Enforcement Action Hit with Follow-On Securities Suit

Long-time readers know that I have a particular interest in the SEC whistleblower program. I have been interested in it since it was first put into effect now almost ten years ago. One reason I was interested in it from the very outset is that I thought that a pattern might emerge in which whistleblowers submitted their reports to the SEC, the SEC launched an investigation or enforcement action, and then company shareholders filed related securities class action lawsuits based on the circumstances revealed in the whistleblower’s report.

By and large, the third step in this anticipated pattern has not emerged. As far as I am aware, there have not been private securities suits filed after SEC whistleblower reports triggered SEC investigation or enforcement actions – until now, that is. On January 28, 2021, a plaintiff shareholder filed a securities class action against Exxon Mobil relating to news reports that the SEC has launched an investigation of the company based on whistleblower reports questioning the company’s asset valuations of its Permian basin oil fields. A copy of the plaintiff’s complaint can be found here.
Continue Reading Securities Suit Filed Against Exxon Mobil Based on SEC Whistleblower Allegations

As I have noted in prior posts (most recently here), allegations of bribery and improper payments often lead to follow-on securities class action lawsuits. Although historically claimants in these kinds of securities suits have had mixed results, some of these lawsuits have resulted in significant settlements (including most notably the $3 billion settlement in the Petrobras case). In the latest of these bribery follow-on lawsuits to result in a significant settlement, on December 11, 2020, the parties to the securities lawsuit pending against the Chilean company Chemical and Mining Company of Chile Inc. (a/k/a Sociedad Química y Minera de Chile S.A., or “SQM’) filed with the  court their agreement to settle the lawsuit based on SQM’s agreement to pay $62.5 million. The parties’ December 11, 2020 stipulation of settlement can be found here. The lead plaintiff’s motion for preliminary approval of the settlement can be found here.
Continue Reading Chilean Company Pays $62.5 Million to Settle Bribery-Related Securities Suit