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Earlier this month, the U.S. Center for Disease Control announced the end in the U.S. of the COVID-19-related public health emergency that began in March 2020. Yet even though the public health emergency has now officially ended, the pandemic’s effects still continue to affect company’s financial results, and still continue to result in COVID-19-related securities class action lawsuits. In the latest litigation example, late last week a plaintiff shareholder filed a securities class action lawsuit against The Walt Disney Company related to the fallout from the company’s early pandemic-related success with and commitment to its Disney+ streaming services, a bet that soured as the pandemic progressed. The new filing shows that though the public health emergency may have ended, the pandemic-related securities litigation risk continues.Continue Reading Disney Hit With Securities Suit with COVID-Related Allegations

The parties in the Kraft Heinz Securities Group securities class action litigation have agreed to settle the case for $450 million, a massive settlement that makes the list of all-time largest settlements. The settlement is subject to court approval. A copy of the parties’ stipulation and agreement of settlement, which was filed with the court on May 5, 2023, can be found here.Continue Reading Kraft Heinz Securities Litigation Settles for $450 Million

In the past, shareholder derivative lawsuits tended to settle for the defendants’ agreement to adopt corporate therapeutics and the payment of plaintiffs’ attorneys’ fees. There typically was not a cash component to the settlement, and rarely a substantial cash component. In more recent years, settlement patterns have changed, and, increasingly, derivative suit settlements have entailed large amounts of cash. The latest example of these new derivative suit settlement patterns is the $167.5 settlement of the derivative lawsuit brought by CBS shareholders in Delaware Chancery Court in connection with CBS’s $30 billion 2019 acquisition of Viacom. (The combined company was known as ViacomCBS, which changed its named to Paramount Global in February 2022.) Paramount Global disclosed the settlement of the CBS shareholder derivative lawsuit it its April 21, 2023 filing on Form 8-K, here.Continue Reading CBS Shareholder Derivative Suit Relating to Viacom Merger Settles for $167.5 Million

As I noted in my year-end round up of D&O related issues (here), plaintiffs’ lawyers have continued to file securities class action lawsuits following cybersecurity incidents, even though the plaintiffs’ track record in these kinds of lawsuits generally has been poor. Among the cybersecurity-related securities lawsuits filed last year was the suit against cloud-based software company Okta relating in part to the cybersecurity incident at the company earlier in the year. Consistent with the general trend, on March 31, 2023, the court presiding over the Okta securities lawsuit granted the defendants’ motion to dismiss the cybersecurity-related allegations, although the court denied the dismissal motion with respect to certain of the plaintiffs’ other unrelated allegations. The court granted the plaintiff leave to amend the dismissed allegations. The court’s March 31, 2023, order can be found here.Continue Reading Cybersecurity-Related Securities Suit Allegations Against Okta Dismissed

              

In the current economic environment, companies are wrestling with a host of macroeconomic issues, including rising interest rates, economic inflation, continuing labor shortages, and the war in Ukraine. In addition, another issue companies are facing in the wake of the pandemic is supply chain disruption, which continues to challenge some companies. In the latest sign…

Among jurisdictions outside the U.S. with active securities litigation regimes, one of the most noteworthy and important is Canada. Shareholder litigation in Canadian courts and under Canadian law has been an important feature of the global investor litigation picture for several years. According to the latest annual report from NERA Economic Consulting, the number of Canadian securities class action lawsuits declined in 2022 for the second year in a row, and the number of 2022 filings was also slightly below the long-term annual average number of filings. In addition, as detailed below, the median settlement amount for settlements of Canadian securities class action lawsuits has decline in the most recent years compared to prior years. The report, which is entitled “Trends in Canadian Securities Class Actions: 2022 Update,” can be found here.Continue Reading NERA: Canadian Securities Class Action Lawsuit Filings, Settlements Declined in 2022

Long-time readers know that I have frequently commented on this site on the phenomenon of “event-driven” litigation (for example, here). These are securities lawsuits filed in the wake of a significant operational event or development that disrupts a company and tanks its share price, as opposed to securities suits that are premised on accounting or financial misrepresentations. I am far from the only observer that has commented on this phenomenon. Among others, the Bloomberg columnist Matt Levine, in an article provocatively entitled, “Everything Everywhere is Securities Fraud” (here) also weighed in on the event-driven litigation trend.

There are, of course, usually two sides to every story, and in a April 5, 2023 Law360 article entitled “Why Event-Driven Securities Class Actions Often Succeed” (here, subscription required), Daniel Barenbaum and Michael Dark of the Berman Tabacco firm provide a plaintiffs’ side view of event-driven securities litigation, and make out their case that these cases are not only not frivolous but provide securities investors important remedies and protections.Continue Reading Are Event-Driven Cases More Often “Frivolous” or “Successful”?

Since the initial outbreak of COVID-19 in the U.S. in March 2020, there have been scores of COVID-related securities suit filed. However, as the pandemic itself progressed, the nature of the lawsuits being filed also changed. Over time, the plaintiffs’ lawyers began targeting companies that had initially prospered at the outset of the pandemic, but whose fortunes flagged as circumstances changed. The prototypical example of a COVID-19-related securities suit involving a company that experienced this particular sequence of events is the lawsuit filed against exercise equipment company Peloton, whose equipment sold briskly at the outset of the pandemic but whose sales slackened as government shutdown orders lapsed and people began returning to work. However, in a March 30, 2023 order (here), the court granted the defendants’ motion to dismiss in the Peloton case, albeit without prejudice, in a decision that does not bode well in these kinds of change-of-fortune pandemic-related securities suits.Continue Reading Dismissal Granted in Peloton COVID-Related Securities Suit

Though SPAC-related lawsuits were among the most important factors contributing to securities class action litigation filing volume in 2022, SPAC-related litigation has not yet been as significant of a factor so far in 2023. But while there have been relatively few SPAC related securities suits filed this year, there has been SPAC-related Delaware state court breach of fiduciary duty litigation. In the latest example of this Delaware state court litigation activity, plaintiff shareholders recently filed a Delaware Chancery Court lawsuit against the directors of a SPAC; the post-merger de-SPAC company, as successor in interest in the SPAC; and the SPAC’s sponsor, alleging that the defendants breached their fiduciary duties in connection with the merger. A copy of the plaintiff’s March 31, 2023, complaint can be found here.Continue Reading SPAC Board and Sponsor Hit with Delaware State Court Breach of Fiduciary Duty Direct Action

As the authors put it in the title of their recent guest post on this site, crypto is the new frontier of securities litigation. The title is reference to a statement by Stanford Law Professor Joseph Grundfest, made in conjunction with Cornerstone Research’s release of its annual survey of securities class action lawsuit filings. The Cornerstone Research report showed that crypto-related securities lawsuit filings surged in 2022. In a March 27, 2023, memo from the Dechert law firm, entitled “Cryptocurrency Securities Class Action Litigation 2022 Year Review,” (here), the law firm memo’s authors take a detailed look at the 2022 crypto-related securities suit filings, including a review of the defendants and the allegations involved.Continue Reading A Detailed Look at the 2022 Crypto-Related Securities Suit Filings