follow-on civil litigation

brazil flagThe massive Brazilian corruption scandal that began with an investigation of the state-owned oil company Petrobras and that has since spread both to other industries, including the construction industry, and to other Latin American countries, has now spread to an investigation of unsanitary practices and corruption in Brazil’s meatpacking industry. Among the Brazilian companies caught up in this latest scandal is JBS S.A., which is the world’s largest meat processing company. As has been the case with other companies caught up in Brazilian corruption scandal, JBS, whose Level 1 ADRs trade over-the-counter in the U.S., has now been hit with a follow-on securities class action lawsuit in the United States. This lawsuit is the latest in the string of lawsuits filed against companies from Brazil and elsewhere Latin America that have been hit with U.S. securities suits following news of their involvement in the burgeoning corruption scandal.
Continue Reading Brazilian Corruption Scandal Spreads to Meat Industry, U.S. Securities Litigation Follows

rio tintoIn yet another securities suit following on news of a bribery or corruption investigation, and in the latest securities suit involving a global mining company, on December 12, 2016, a plaintiff shareholder filed a securities class action lawsuit in the Southern District of New York against the world’s second-biggest mining company, U.K.-based Rio Tinto plc, and certain of its current and former officers. The complaint arises out of the company’s recent announcement of a corruption investigation involving its operations in the Simandou iron mine, located in southern Guinea. As discussed below, this latest lawsuit exemplifies a number of the key securities litigation filing trends that have arisen this year.
Continue Reading Bribery-Related Follow-On Securities Suit Filed Against U.K.-Based Rio Tinto

In a recent post, I noted that plaintiffs’ lawyers had recently launched a series of securities class action lawsuits against several poultry producers in the wake of news that companies in that industry were the target of antitrust enforcement action. Now news has emerged that antitrust regulators may be targeting companies in a different sector, the generic drug manufacturing industry. Within days of the news, plaintiffs’ lawyers have filed several securities class action lawsuits against several generic drug companies — the latest companies to be hit with follow-on securities suits following news of antitrust enforcement actions.
Continue Reading Generic Drug Companies Hit With Antitrust Enforcement Follow-On Securities Suits

chickensOne of the characteristic securities litigation patterns for many years has been that lawsuit filings tend to come in distinctive waves, in which specific sectors get hit with a series of securities suits or companies engaging in certain types of conduct or business practices attract securities litigation. The lawsuits arising out of the dot-com crash and the options backdating scandal are examples of these kinds of litigation patterns. Over the last several weeks, a different industry sector pattern has emerged. The poultry production industry, which recently has been the target of private antitrust litigation, has now been hit with a string of follow-on securities class action lawsuits as well. These lawsuits represent one of the more distinctive securities litigation filing patterns this year.
Continue Reading Poultry Producers Hit with Antitrust Suits, Follow-on Securities Litigation

embraerAs I have noted in prior posts (most recently here), in recent months a number of Brazilian companies have been hit with a wave of U.S. securities class action lawsuits. These suits have followed in the wake of corruption scandals and environmental disasters in Brazil. Now yet another Brazilian company has been hit with a U.S. securities class action lawsuit, as aircraft manufacturer Embraer and certain of its directors and officers has been sued in a securities suit following allegations that of the company’s involvement in the payment of bribes to government officials in the Dominican Republic. In addition to being the most recent securities lawsuit filed in the U.S. against a Brazilian company, the new lawsuit also represents the latest example of a securities suit arising in the wake of a bribery investigation.
Continue Reading Yet Another Brazilian Company Hit with U.S. Securities Suit

seadrillIn a prior post, I noted that among the implications of the international trade sanctions is the possibility that companies affected by sanctions could face D&O claims. Among the risks the sanctions program presents is the possibility that a company dealing with sanctions-related issues could face a follow-on securities lawsuit, as investors seek to hold the company and its senior officials liable for share prices declines following disclosure of sanctions-related issues.

In the Seadrill Limited Securities Litigation, a securities class action lawsuit pending in the Southern District of New York, investors sued the company, a subsidiary, and certain of its directors and officers, for the company’s elimination of its dividend and loss of significant business with a Russian oil company subject to international sanctions following Russia’s invasion and annexation of Crimea. On June 20, 2016, in an interesting opinion (here), Southern District of New York Lorna Schofield granted the defendants’ motion to dismiss the Seadrill case. Due to the case’s factual circumstances, the opinion makes for some interesting reading. In any event, the case represents an important example of the possibilities for D&O claims arising from sanctions-related issues.
Continue Reading Russian Trade Sanctions-Related Securities Lawsuit Dismissed

petrobrasIn an interesting opinion addressing several of the critical issues in the U.S. securities lawsuit arising out of Petrobras bribery scandal, on July 30, 2015, Southern District of New York Judge Jed Rakoff denied in part and grated in part the defendants’ motions to dismiss. Among other things, Judge Rakoff rejected the company’s “adverse interest” argument, in which the company had tried to argue that the complicit corporate executives’ knowledge of the bribery scheme and consequent awareness of the misrepresentations of the company’s financial condition could not be attributed to the company. However, Judge Rakoff dismissed the claims asserted under Brazilian law on behalf of shareholders who purchased their Petrobras shares on the Bovespa, the São Paulo Stock exchange, ruling that these shareholders’ claims were subject to the mandatory arbitration clause in the company’s bylaws. A copy of Judge Rakoff’s opinion can be found here.
Continue Reading Petrobras Securities Suit: Judge Rakoff Rejects Company’s “Adverse Interest” Argument; Rules Brazilian Investors Must Arbitrate Brazilian Securities Law Claims

del1One of the more distinct litigation phenomena in recent years has been the rise of multi-jurisdiction litigation, particularly in connection with merger objection litigation. Corporate advocates and defense attorneys have decried this development, as it has forced companies facing litigation to have to fight a multi-front war and to incur increased defense expense. At its