On November 14, 2016, in an interesting lawsuit that brings together a number of recent securities litigation trends, a noteholder of Samarco Mineração, S.A. filed a purported securities class action lawsuit in the Southern District of New York against the company and its CEO on behalf of investors who purchased the company’s debt securities. Samarco, a joint venture of mining giants Vale, S.A., and BHP Billiton, owned and operated the Fundão tailings dam that collapsed on November 5, 2015, in what has been called Brazil’s worst-ever environmental disaster. There are a number of interesting features to this new lawsuit, beyond just its relationship to the dam collapse disaster. A copy of the plaintiff’s November 14, 2016 complaint can be found here.
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SEC Enforcement Activity Involving Public Companies
While the confirmation earlier this week that Mary Jo White will step down as SEC Chair at the end of the Obama administration raises interesting questions about the SEC’s possible future direction and priorities, the agency’s public company-related enforcement activities during the last fiscal year provide some very interesting insights about the SEC’s recent priorities. In an interesting November 15, 2016 report entitled “SEC Enforcement Activity Against Public Companies and Their Subsidiaries: Fiscal Year 2016” (here), the NYU Pollack Center for Law & Business and Cornerstone Research take a detailed look the SEC’s enforcement activity during the fiscal year ending on September 30, 2016. The report examines the agency’s record levels of enforcement activity involving public company defendants during the fiscal year.
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As the Failed Bank Litigation Wave Winds Down, A Look Back
As we approach what will be the eighth anniversary of the peak of the global financial crisis, many of the effects of the crisis have subsided. But while the crisis and many of the worst of its effects have largely faded into the past, a number of litigated matters related to the crisis have continued to grind through the courts. Among other things, the wave of failed bank lawsuits – that is, lawsuits filed by the FDIC against the former directors and officers of banks that failed in the wake of the crisis – has continued to roll along. However, at this point, it looks as if the failed bank litigation has just about played out. Now that the litigation is winding down, it may be time take a retrospective look at the failed bank litigation wave.
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Cornerstone Research: Since Trulia, Merger Objection Lawsuit Filings Have Plunged
One of the most distinctive recent developments in the litigation environment has been the rise of merger objection litigation, in which nearly every merger attracted at least one lawsuit challenging the transaction. Many of these cases settled quickly based on the defendants’ agreement to make additional transaction-related disclosures and to pay the plaintiffs’ attorneys’ fees. However, in a series of rulings culminating in the January 2016 ruling in the Trulia case, the Delaware Court of Chancery has shown its disapproval of the disclosure-only settlement model. It now appears that as a result of the Chancery Court developments that fewer mergers are attracting lawsuits and fewer lawsuits overall are being filed.
As detailed in an August 2, 2016 report from Cornerstone Research entitled “Shareholder Litigation Involving Acquisition of Public Companies: Review of 2015 and 1H 2016 M&A Litigation” (here), the percentage of merger transactions attracting litigation began to fall to the lowest levels in years during the second half of 2015, and the litigation dropped even further in the first half of 2016, as detailed further below. Cornerstone Research’s August 2, 2016 press release about the report can be found here.
Continue Reading Cornerstone Research: Since Trulia, Merger Objection Lawsuit Filings Have Plunged
Cornerstone Research: First Half Securities Suit Filings at Highest Level in Years
Securities class action lawsuit filings in the first half of 2016 leapt to their highest level in years, according to a recent report from Cornerstone Research. According to the report, which is entitled “Securities Class Action Filings: 2016 Midyear Assessment,” both the number of lawsuit filings and the rate of litigation were well above long-term historical semiannual averages in the first six months of 2016. The increases are attributable in part to the increase in federal court M&A-related securities litigation, as discussed below. The report can be found here. Cornerstone Research’s July 26, 2016 press release about the report can be found here. Cornerstone Research’s analysis is largely consistent with my own review of the first half securities suit filings, which can be found here.
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Securities Class Action Lawsuit Filings Continue at Elevated Pace in the Year’s First Half
Continuing 2015’s elevated pace, the number of securities class action lawsuit filings during the first half of 2016 accrued in numbers well above both historical averages and recent levels. The first half 2016 levels puts the securities suit filing activity on pace for the most active year for securities class action lawsuit filings since 2004.
Continue Reading Securities Class Action Lawsuit Filings Continue at Elevated Pace in the Year’s First Half
Guest Post: Deeper Trends in Securities Class Actions 2006-2015
There have been a number of important developments in class action securities litigation case filings in the recent years. In the following guest post, Michael Klausner, Professor of Law, Stanford Law School, and Jason Hegland, Executive Director, Stanford Securities Litigation Analytics, using the Stanford Securities Litigation Analytics database, identify and review several of these developments. As their guest post explains, there have been a number of interesting changes with respect to the kinds of cases that are being filed, as well as with respect to who is filing them. I would like to thank Mike and Jason for their willingness to publish their guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this site. Please contact me directly if you would like to submit a guest post. Here is Mike and Jason’s guest post.
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Securities Litigation and Life Sciences Companies: An Update
Life sciences companies are among the most frequent targets of securities class action litigation as I noted in a recent post. However, according to a recent law firm report, life sciences company defendants fared well in securities litigation in 2015. The recently released report, written by the Sidley Austin law firm and entitled “Securities Class Actions in the Life Sciences Sector: 2015 Annual Survey,” can be found here. This comprehensive report reviews all of the district court and appellate court decisions in 2015 in securities class action lawsuits pending against life sciences companies, and also reviews the new securities suits that were filed in 2015 against life sciences companies. The report provides a broad overview of the important issues involved with securities class against litigation against life sciences companies.
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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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Cornerstone Research: Accounting-Related Securities Suit Filings and Settlements Increase
The number of securities class action lawsuit filings raising accounting-related allegations rose in 2015, as did the number and value of accounting-related securities suit settlements, according to a new report from Cornerstone Research. In addition to the increase in the number of accounted-related lawsuit filings, the market capitalization losses associated with those new filings increased as well. The April 19, 2016 report, entitled “Accounting Class Action Filings and Settlements: 2015 Review and Analysis,” can be found here. Cornerstone Research’s April 19, 2016 press release about the report can be found here.
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