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Earlier this year, challenges arising from rising interest rates, as well as concerns surrounding liquidity and other issues, led to three of the largest banking failures in U.S. history. The three that failed were not the only banks facing challenges in the rising interest rate environment, and while there have been no further failures since May, questions from the turbulence earlier this year remain for many banks. Now, in a sign that these kinds of challenges and questions can lead to securities litigation even in the absence of bank failure, a plaintiff shareholder has filed a securities class action lawsuit against KeyCorp (the bank holding company of KeyBank) after questions about the bank’s liquidity and interest rate income in a rising interest rate environment caused a drop in the company’s share price. A copy of the August 4, 2023, complaint filed against Key can be found here.

Continue Reading Liquidity and Interest Income Concerns Draw Securities Suit Against Bank

In a milestone development in the long-running Dutch collective investor action brought against Petrobras and related entities, a Netherlands court has ruled on the merits in favor of the Foundation bringing the action on behalf of investors, holding that Petrobras harmed investors by publishing misleading financial information. Though the case is not done – the Court will next consider certain legal issues pertaining to the investors’ claimed damages – the Court’s recent ruling is an important step in this significant and high-profile case. An English translation of the Court’s July 26, 2023, judgment can be found here. The July 26, 2023, press release of the International Securities Association & Foundations Management Company, the administrator of the Foundation brining the action, which summarizes the rulings in the Court’s judgment, can be found here.

Continue Reading Dutch Court Enters Interim Merits Judgment in Favor of Petrobras Investors

Earlier this week (here), I noted the securities class action lawsuit that a plaintiff shareholder filed against AT&T in the wake of the Wall Street Journal’s series of articles about the network of lead telephone cables in the U.S. Now, another plaintiff has initiated a separate but parallel lawsuit against Verizon. This latest lawsuit, which was filed by the same plaintiff law firm as filed the AT&T lawsuit, alleges that Verizon was aware of but failed to disclose to investors the risks and hazards the company faced owing to its ownership of the lead telephone cables. A copy of the August 1, 2023, complaint against Verizon can be found here.

Continue Reading Verizon Hit with Lead Telephone Cable-Related Securities Suit

The COVID-19-related public health crisis ended earlier this year; the CDC declared the end of the public health emergency in May. While the pandemic may be over, many of the changes that the pandemic wrought remain. Some of these changes resulted in significant alterations to the operating environment for many businesses. The difficulties that businesses face in trying to adapt to the new environment has, in turn, and at least for some businesses, translated into securities lawsuits. The latest example of this phenomenon is the lawsuit filed last week against clinical trial company Syneos, whose business operations were not only disrupted by the pandemic, but also changed in ways that caused ongoing disruption the company’s business and financial results. The lawsuit alleges that the company and its executives misrepresented both the company’s response to the pandemic and to the changed business circumstances the company faced due to the pandemic. A copy of the July 27, 2023, complaint filed against the company can be found here.

Continue Reading Clinical Trials Company Hit with COVID-Related Securities Suit

The number of federal and state court securities class action lawsuits filed in the first six months of 2023 was up compared to the number of filings in the second half of 2022, but in line with the number of filings in the first half of 2022 as well as with the long-term half-year average number of filings, according to the latest report from Cornerstone Research. The report, written in conjunction with the Stanford Law School Securities Class Action Clearinghouse, is entitled “Securities Class Action Filings: 2023 Midyear Assessment,” and can be found here. Cornerstone Research’s July 20, 2023, press release about the report can be found here.

Continue Reading Cornerstone Research: 1H23 Securities Suit Filings Increased Relative to 2H22

From the very beginning of the COVID-19 outbreak in March 2020, one related phenomena that immediately became apparent was the emergence of coronavirus-related securities class action lawsuits and other corporate and securities litigation. I have been tracking the COVID-related securities litigation since the very beginning, and now, even though we are now well into the pandemic’s fourth year, the COVID-related securities suits are continuing to be filed. In the latest example of a COVID-related securities suit filing, a plaintiff shareholder this week sued Danaher Corporation for the company’s disclosures related to the impact of the pandemic on the company’s sales. This latest filing suggests that the COVID-19-related securities litigation phenomenon may have further to go yet. A copy of the complaint in the new lawsuit against Danaher can be found here.

Continue Reading Danaher Hit with COVID-Related Securities Suit Filing

In my 2022 year-end wrap up of D&O insurance developments, I identified macroeconomic factors as among the sources of D&O claims during the past year including, among other things, interest rate increases, economic inflation, labor supply and supply chain disruption, and the Ukraine War. In various posts this year, I have noted that these factors continue to affect companies and to contribute to the number of securities class action lawsuit filings. In the latest example of the way in which these macroeconomic factors can translate into securities litigation, the drug and healthcare company Baxter International was sued last week due to the decline in the company’s share price after the company’s announcement that continuing supply chain woes were setting back its operations and financial results more significantly than the company had anticipated. The new lawsuit shows that macroeconomic factors such as supply chain constraints are continuing to contribute to securities lawsuit filings. A copy of the July 12, 2023, complaint against Baxter can be found here.

Continue Reading Baxter Hit with Supply Chain-Related Securities Class Action Lawsuit
Nessim Mezrahi

In a recent post, I reviewed the number of first half 2023 securities class action lawsuit filings. In the following guest post, Nessim Mezrahi, co-founder and CEO at SAR LLC, analyses the potential financial exposure associated with the securities suit filings from the year’s first six months, as well as the implications of the filings for the D&O insurance industry. Nessim’s article first was published in the form of an SAR press release (here). I would like to thank Nessim for allowing me to publish his 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 Nessim’s article.

Continue Reading Guest Post: 2023 Market Dynamics Testing D&O Rate Adequacy and Coverage Sufficiency

As I have previously noted on this site, several international trade regulatory regimes have become increasingly important for companies and their executives. These regulatory regimes include U.S. sanctions, export controls, anti-money laundering (AML), and anti-bribery and corruption laws. Recent developments, such as the War in Ukraine, trade tensions with China, and issues involving digital assets have heightened these concerns. Violations of these regimes can result in regulatory enforcement actions as well as in related civil litigation.

The latest example of a civil action following in the wake of a trade regulation enforcement action is the lawsuit filed earlier this week against data storage company Seagate Technology Holdings plc, after the company was hit with a U.S. Department of Commerce administrative penalty for violation of Export Administration Regulations (EAR) pertaining to the Chinese technology company, Huawei Technologies Co. Ltd. The recently filed securities suit shows how international trade regulation and enforcement can translate into corporate and securities litigation. A copy of the July 10, 2023, Seagate complaint can be found here.

Continue Reading Trade and Export Control Enforcement Leads to Securities Class Action Suit

In my recent mid-year review of the year-to-date securities lawsuit filings, I noted that certain factors that had contributed significantly to the number of securities suits filed in 2022 were less of a factor in the first six months of 2023. Among these diminished factors was the number of SPAC-related lawsuit filings. But while the number of SPAC-related suit filings has been down so far this year, SPAC-related suits are nonetheless still being filed. The latest example of a SPAC-related filing this year is the suit filed on July 6, 2023, against the Israeli company, Hub Cyber Security, Ltd., which became a Nasdaq-listed company following the February 2022 merger of its predecessor operating company with a SPAC.  The new lawsuit illustrates the ways in which litigation can arise against companies that are the product of completed SPAC mergers.

Continue Reading Israeli Firm Hit with SPAC-Related Securities Suit