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The directors’ and officers’ liability environment is always changing, but 2024 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 2025 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2024, with a focus on future implications. Please note that on Wednesday, January 15, 2025 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2024. Registration for the webinar can be found here. I hope you can join us for the webinar.Continue Reading The Top Ten D&O Stories of 2024

When it became public a few weeks ago that the SEC had disbanded its Climate and ESG Task Force, the SEC emphasized that it was not taking its eye off of ESG-related issues. In the latest example of the SEC’s continuing ESG-related monitoring, late last week the ESG announced that it had settled charges against investment adviser Invesco Advisers. The agency alleged that the company had made misleading statements about the percentage of company-wide assets under management that integrated ESG factors in investment decisions. In settling the charges, the company agreed to pay a $17.5 million civil penalty. The SEC’s November 8, 2024, press release about the charges and the settlement can be found here. The SEC’s November 8, 2024, cease-and-desist order in the matter can be found here.Continue Reading SEC Charges Investment Adviser With ESG-Related Misleading Statements

With the news broke within the last few weeks that months earlier the SEC had quietly disbanded its Climate and ESG task force, the agency took pains to emphasize that the winding up of the Task Force did not mean that the agency was no longer policing ESG-related issues. At least one recent development underscores the fact that the agency is continuing to monitor ESG concerns, particularly “greenwashing”-type concerns. Earlier this week, the agency initiated entered an agreed cease-and-desist order against investment adviser WisdomTree Asset Management, based on alleged misstatements and compliance failures relating to the firm’s execution of its ESG investment strategy. Among other things, the agency alleged that the firm’s funds invested in the investment classes it had said it would avoid.Continue Reading SEC Charges Investment Adviser With Failing to Adhere to Stated ESG Investment Criteria

In March 2021, to great fanfare, the SEC announced its formation of a Climate and ESG Task Force to “develop initiatives to proactively identify ESG-related misconduct,” as well as to “coordinate the effective use of Division resources, including through the use of sophisticated data analysis to mine and assess information across registrants, to identify potential violations.” Now, it turns out that, much more quietly, the agency has disbanded the Task Force. As first reported in a September 12, 2024, Bloomberg article (here), the SEC shut down the Task Force “within the past few months.”Continue Reading SEC Disbands Climate and ESG Task Force

In recent months, many companies have found themselves under fire from conservative advocates for their stances on ESG-related issues. At the same time, other companies have found themselves facing litigation based on allegations that they have overstated their green credentials (a set of allegations sometimes called “greenwashing”). As two recent cases show, companies can face challenges and potential liability over their sustainability claims.Continue Reading Beverage Companies Face Scrutiny Over Their Green Claims

In an unusual lawsuit that pairs individual wrongful termination allegations with class action securities law claims, a former employee and present shareholder of a unit of the UK-based publishing and data analytics firm RELX PLC alleges that the company fired him in retaliation for raising concerns about the company’s “greenwashing.” He also alleges that the company misled investors about the company’s climate commitments and its climate-related actions. The complaint alleges that the company made public commitments to climate remediation but at the same time continued to engage in business activities contrary to these commitments. As discussed below, this new lawsuit, although unusual, underscores the fact that climate related allegations, including greenwashing allegations, continue to represent a significant potential source of D&O liability. A copy of the August 6, 2024, complaint can be found here.Continue Reading Publishing and Data-Analytics Firm Hit With “Greenwashing” Securities Suit

As ESG-related litigation has developed, one definitive trend has been the emergence of litigation involving allegations of “greenwashing” – that is, claims alleging that companies overstated their ESG credentials in order to win business, attract customers, or score virtue points. To date, the greenwashing claims have emerged primarily in the U.S. and Europe. Now, Australia is getting into the act, as the Australian Securities and Investments Commission (ASIC) has brought and won its first greenwashing civil penalty action. As discussed below, the action involved claims that Vanguard’s Australian affiliate made misleading statements about its ESG-sorting processes for one of its index funds.Continue Reading Australian Regulator Wins First Greenwashing Enforcement Action

It is not news that ESG has become a battleground issue, with prominent ESG efforts now facing an anti-ESG backlash. And while in the recent past institutional investors and advocacy groups tried to push publicly traded companies to establish their ESG credentials, the ESG-related litigation (such as it has been, so far at least) has primarily been filed not against ESG laggards, but rather against companies that have tried to promote their sustainability efforts and other climate-friendly measures.

In the latest example of litigation against a company in connection with its efforts to promote its ESG qualifications, the New York Attorney General, Letitia James has filed a fraud lawsuit in New York state court against the U.S. subsidiary of JBS, a Brazil-based meat and poultry producer, alleging that its sustainability claims and its publicized goal of achieving net zero greenhouse gas emissions by 2040 misled consumers.  A copy of the New York Attorney General’s February 28, 2024, press release about the lawsuit can be found here. The NYAG’s February 28, 2024, complaint can be found here.Continue Reading NYAG Sues Meat Company for Its Net Zero Emissions Claims

While academics and others may be asking whether it is time to “say RIP to ESG,” the fact is that though some observers may be done with ESG, ESG is not done with us. A recent action by a U.K. regulator shows that companies remain susceptible to investigations and other regulatory actions for their sustainability and other product or business-related claims. In a December 12, 2023 press release (here), the U.K. Competition and Markets Authority (CMA) announced that it has started a formal investigation into the London-based consumer products company Unilever to examine the company’s “green” claims about “a number” of its products.

As discussed below, this latest regulatory action underscores the fact that companies seeking to burnish their green credentials could be subject to scrutiny and even possible regulatory action. A December 13, 2023, Wall Street Journal article about the CMA’s investigation can be found here.Continue Reading Unilever Under U.K. Investigation for Possible “Greenwashing” Product Claims

The risks and opportunities that AI presents have emerged quickly and may be evolving even faster; the whole AI phenomenon has developed much more quickly than legislators’ and regulators’ ability to respond. Among the many AI effects that regulators and other observers are struggling to assess is the extent of the AI-related litigation potential, including but not limited to the prospects for AI-related corporate and securities litigation.Continue Reading SEC Chair Warns Against “AI Washing”