In the following guest post, attorneys from the Paul Weiss law firm review and analyze a November 3, 2016 Second Circuit decision (here) in which the appellate court held that the standard pre-IPO lock-up agreements between a company’s pre-IPO shareholders and the company’s lead IPO underwriters do not make those parties a “group” within Section 13(d) of the ’34 Act, and therefore that the lock-up agreement alone is insufficient to trigger Section 16(b) short-swing profit liability. I would like to thank the Paul Weiss attorneys for their willingness to allow me to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: IPO Lock-Up Agreement Parties Not a “Group” Liable for Short-Swing Profits
Guest Post: IPO Companies, Section 11 Suits, and California State Court
One of the interesting (and challenging) quirks of the federal securities laws is that Section 22 of the ’33 Act provides concurrent state court jurisdiction for liability actions under the Act. Many courts have taken the view that legislation subsequent to the ’33 Act preempts state court jurisdiction under Section 22, as discussed here. While the courts continue to struggle with the preemption question, some plaintiffs are continuing to file ’33 Act actions in state court, particularly in California.
In the following guest post, Priya Cherian Huskins, Donna Moser, and Vysali Soundararajan of Woodruff-Sawyer & Co. take a look at these state court securities lawsuits, and in particular at the recently increased numbers of state court filings in California, as well as the practical implications. I would like to thank Priya, Donna and Vysali for their willingness to publish their article on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Priya, Donna, and Vysali’s guest post.
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Yes, But WHY Are There So Many Fewer Publicly Traded Companies?
As I have noted previously on this site, there are many fewer publicly traded companies in the United States now than there were within past decades. I have noted this phenomenon primarily within the context of observing that while the annual number of securities class action lawsuits has remained broadly stable within a range, the number of public companies has declined, suggesting that the average likelihood of any company getting hit with a securities suit has increased over time (as discussed here). This often-overlooked observation is important, but it doesn’t address the more fundamental question of why there are so many fewer publicly traded companies than there once were. A recent academic paper documents the decline in the number of publicly traded companies and suggests several possible reasons for the decline. I have my own thoughts, as well. As discussed further below, these decline in the number of listed companies has important implications for the economy generally and for the D&O insurance marketplace in particular.
Continue Reading Yes, But WHY Are There So Many Fewer Publicly Traded Companies?
U.S. IPO Activity Remains at Heightened Levels in Year’s First Half
Although the IPO pace is off from last year’s sizzling levels, the number of companies completing IPOs on U.S. exchanges remains at heightened levels. In addition, the number of completed IPOs picked up as the year progressed, suggesting that IPO activity in the U.S. in the year’s second half will also be lively.
U.S. IPO activity in 2014 was at the highest levels in more than a decade, when there were a total of 275 U.S. IPOs (as discussed here). According to Renaissance Capital (here), through the first six months of 2015, there have been a total of 104 completed IPOs, which is well below the 147 completed in the first half of 2014 (representing a decline of 29%). However, other than when compared with 2014, the number of U.S. IPOs completed in the first half of 2015 is the first half total since 2004.
The pace of completed IPOs has picked up as 2015 has progressed. The number of U.S. IPOs completed in June 2015 was the highest monthly total since July 2014, and the number of IPOs completed during the week ending on June 25, 2015 was the highest weekly total since October 2014, as discussed here. Moreover, the market for IPOs appears to be quite healthy as we head into the year’s second half. Seres Therapeutics, which debuted during the week ending June 25, 2015 soared 186% on its first day of trading, the highest post-IPO pop since January 2014.
Continue Reading U.S. IPO Activity Remains at Heightened Levels in Year’s First Half
What’s Up with IPOs?
It has been three years since Congress passed the JOBS Act in the hope that aiding “Emerging Growth Companies” would help create jobs. Among other things, the Act’s IPO on-ramp provisions were designed to encourage fledgling companies to go public, on the theory that that would boost employment. As discussed below, the legislation’s jobs creation
Guest Post: Despite SLUSA, Plaintiffs File IPO Lawsuits in State Court
In a recent post, I noted the curious phenomenon of plaintiffs filing IPO-related securities class lawsuits in state court. Plaintiffs have this option under the concurrent jurisdiction provisions of the ’33 Act, but I still wondered why a plaintiff would chose to proceed in state court. I also noted that there is a split
IPO Companies and Fee-Shifting Bylaws
One of the more interesting recent developments in the D&O liability arena has been the emergence of issues surrounding fee-shifting bylaws. As readers will recall, in May 2014, the Delaware Supreme Court in the ATP Tours case upheld the validity of a non-stock corporation’s bylaw imposing attorneys’ fees on an unsuccessful claimant in an intra-corporate
JOBS Act Provisions Fuel IPO Surge, Raise Concerns
All eyes may be on the record-setting IPO of Chinese Internet firm, Alibaba, but the real IPO story for 2014 may be the significant number of IPOs this year involving smaller companies. The number of companies completing IPOs this year is on pace for the highest annual level since 2007, a surge in initial public
IPO-Related Securities Litigation Picks Up
In several posts of the last several months (most recently here), I have commented that with the increased number of IPOs, an increase in IPO-related securities litigation would likely follow. If the securities litigation filing activity over the last couple of weeks is any indication, the anticipated increase in IPO-related securities litigation has arrived.
Here’s Something We Haven’t Seen for a While: An Increase in U.S. Public Companies
The number of companies with shares listed on U.S. stock exchanges increased last year compared to 2012, which is the first annual increase in the number of publicly traded companies in the U.S. since 1997, according to information from the World Federation of Exchanges. As reflected in a February 5, 2014 Wall Street