Just as the COVID-19 virus continues to represent a threat to human populations, companies continue to explore possible alternatives for the treatment of the disease and its symptoms. As in any initiative built around developing and testing unproven products or processes, a number of these efforts to develop coronavirus treatments and therapies are unsuccessful. In some instances, litigation ensues after these unsuccessful efforts. A lawsuit filed last week against a biopharmaceutical company exemplifies the way this sequence of events can lead to litigation, in turn sustaining the ongoing phenomenon of coronavirus-related securities litigation filings that began at the time of the initial COVID-19 outbreak in the U.S. in March 2020.
Continue Reading Biopharma Company Latest to Get Hit With COVID-19-Related Securities Suit

Although the filing of SPAC-related securities lawsuits has been one of the important securities litigation stories so far this year, the filing this past week of yet another SPAC-related securities suit did highlight the fact that it is the first SPAC-related securities suit to be filed since late May. As discussed further below, there may be some reasons for this apparent lull in SPAC-related securities suit filings over the last several months. However, the recently filed suit, as also discussed below, at the same time arguably underscores the fact that it is entirely possible that the apparently lull in filings between May and August was purely coincidental and that we are likely to see continued numbers of SPAC-related securities suit filings as the year progresses.
Continue Reading Online Lottery Company Hit with First SPAC-Related Securities Suit Filing Since May

One of the more distinctive litigation phenomena over the last several years has been the series of securities lawsuits filed against companies related to the opioid crisis. Plaintiffs’ attorneys have filed securities suits against opioid manufacturers, distributors, and even retailers. While a number of these lawsuits have resulted in settlements, several of them have also been dismissed. In the latest opioid-related securities suit to result in a dismissal, on August 17, 2022, the judge presiding over the opioid-related litigation pending against Endo International in the District of New Jersey granted the defendants’ motion to dismiss with prejudice. Although the dismissal is significant, there is more to be taken into account when assessing the opioid-related corporate and securities lawsuits.
Continue Reading Court Dismisses Opioid-Related Securities Suit

The COVID-19-related securities litigation wave has now been around long enough that companies that were sued early on in the pandemic are now being sued again based on more recent developments. Co-Diagnostics, a diagnostic testing company that was sued in the early months of the coronavirus outbreak in the U.S. in 2020, has now been sued again in a separate securities class action lawsuit based on the company’s disclosures surrounding its release of its second quarter 2022 financial results. A copy of the new complaint against Co-Diagnostics can be found here.
Continue Reading Diagnostic Testing Company Hit with COVID-19-Related Securities Suit

The number of securities class action lawsuit filings in the first half of 2022 was up slightly compared to the number of filings in the second half of 2021, according to a new report from Cornerstone Research. The report, which is entitled “Securities Class Action Filings: 2022 Midyear Assessment,” contains extensive analysis of the first half 2022 filings, including in particular some interesting discussion about SPAC-related securities litigation. The report itself can be found here. Cornerstone Research’s July 27, 2022 press release about the report can be found here.
Continue Reading Cornerstone Research: First Half Securities Suit Filings Up Slightly Compared to Second Half 2021

In the following guest post, the authors revisit the question of whether or not securities class action lawsuits against development-stage biotech companies are likelier to survive a motion to dismiss compared to securities suits against other kinds of companies. As the authors report below, they conclude from their research that the suits against biotech companies are not likelier to survive dismissal motions. The authors of this guest post are: Doug Greene, BakerHostetler, Leader, Securities and Governance Litigation Team; Genevieve York-Erwin, BakerHostetler, Partner; Mike Tomasulo, Baldwin Risk Partners, Managing Partner, Management Liability National Practice Leader: Emily Baxter,  BakerHostetler, Associate; and Alex Karambelas, BakerHostetler, Associate. A version of this article previously was published on the PLUS Blog. I would like to thank the authors for allowing me to publish their article as a guest post 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 authors’ article

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Continue Reading Guest Post: Analysis of Biotech Securities Class Action Motion to Dismiss Results, 2005 – 2022

It is so interesting to me that, notwithstanding the passage of time since the initial coronavirus outbreak in the U.S. in March 2020, plaintiff shareholders continue to file COVID-19-related securities class action lawsuits — as we saw, for example, in the infrastructure overcapacity lawsuit filed last week against Amazon. In yet another case showing how COVID-related concerns are continuing to roil companies and attract securities suits, earlier this week a plaintiff shareholder filed a securities class action lawsuit against developmental-stage pharmaceutical company Molecular Partners AG in part owing to setbacks the company encountered in its efforts to develop a COVID-19 treatment candidate. A copy of the July 12, 2022 lawsuit filed against Molecular Partners can be found here.
Continue Reading Drug Development Company Hit with COVID-19-Related Securities Suit

The number of securities class action lawsuit filings in the first half of 2022 remained at the lower levels that prevailed last year and below the more elevated levels that prevailed during the period 2017-2020. Though the number of securities class action lawsuit filings in the year’s first six months is below the recent higher levels, the number of suits filed is still consistent with long-term averages. The difference in the number of filings so far this year and the elevated numbers during the recent period were both largely due to merger objection lawsuit filings patterns.
Continue Reading Pace of Securities Suit Filings in First Half 2022 Slightly Below Last Year’s Annual Level

According to a new report about SPACs and SPAC-related securities litigation, even though the market for SPAC IPOs may have cooled in recent months, SPAC-related litigation has “yet to heat up.” Indeed, according to the report, litigation involving the 977 SPACs that completed IPOs during the period January 2019 and April 2022 “may continue to grow over the next few years.” The report, which is entitled “SPAC Federal Securities Litigation Analysis” and was written by David P. Abel, Managing Attorney, U.S. Market Advisors Law Group PLLC, can be found here.
Continue Reading Further SPAC-Related Securities Litigation Filings Likely in the Months Ahead?

Regular readers of this blog know that class action securities fraud lawsuits almost never go to trial. But “almost never” is not the same as “never.” Every now and then, there is an unusual case that does go to trial. This past week, a federal court jury reached a verdict in one of those rare and unusual cases. On June 14, 2022, a federal jury in the Southern District of New York held after trial that Michael Reger, co-founder of Dakota Plains Holdings, Inc. was liable for securities fraud and control person fraud, but not for insider trading. Reger was the sole remaining defendant in the case after the other defendants last month reached a settlement. A copy of the jury’s June 14, 2022 verdict form can be found here.
Continue Reading Rare Jury Verdict in Securities Fraud Lawsuit