As I have noted on this site, though companies face pressure from a number of constituencies to establish their ESG credentials, taking the ESG initiative can have a number of consequences, including, for at least some socially active companies, the possibility of litigation (as discussed, for example, here).
The payment technology firm Block, Inc. (formerly known as Square) has been hit with a securities class action lawsuit related to the company’s announcement earlier this year that a former employee had improperly accessed and downloaded company customer data. The new lawsuit is the latest example of the ways in which data security incidents can translate into D&O claims. The complaint, filed on October 11, 2022, can be found here.
Continue Reading Payments Company Hit With Data Breach-Related Securities Suit
In the latest lawsuit to emerge in the aftermath of the recent SPAC frenzy, a plaintiff shareholder has filed a securities class action suit against Opendoor Technologies, a residential real estate digital platform, which merged into a publicly traded SPAC in December 2020. The SPAC involved was one of the many financial vehicles launched by the so-called “King of SPACS,” Chamath Palihapitiya, while the SPAC craze was picking up steam. A copy of the October 7, 2022 complaint can be found here.
Continue Reading SPAC-Merged Real Estate Platform Hit with Securities Suit
Readers of this blog know that in recent years, plaintiffs’ lawyers have filed a number of D&O lawsuits against companies that experience cybersecurity-related incidents. Overall, the plaintiffs’ track record on these cases is at best mixed, and a number of high-profile cases have been dismissed. In the latest example of the dismissal of a cybersecurity-related securities suit, the court in the Capital One Financial Corporation data breach-related securities class action lawsuit has granted the defendants’ motion to dismiss. The September 13, 2022 dismissal order in the case can be found here.
Continue Reading Capital One Data Breach-Related Securities Suit Dismissed
As I have noted in numerous posts on this site, since the initial outbreak of COVID-19 in March 2020, plaintiffs’ lawyers have filed a host of coronavirus-related securities class action lawsuits. As I also noted, the plaintiffs’ track record in these cases has been mixed at best, with a number of the cases being dismissed. In the latest example of the hurdles the plaintiffs are facing in these cases, a federal court has entered an order dismissing the COVID-19 related securities suit that was filed against the pharmaceutical company AstraZeneca relating to the company’s troubled efforts to develop a COVID-19 vaccine. A copy of the September 12, 2022 opinion in the case can be found here.
Continue Reading AstraZeneca COVID-19-Related Securities Suit Dismissed
In the midst of its battles with Elon Musk over Musk’s attempt to walk away from his proposed takeover of the company, Twitter was rocked by the news that a whistleblower had sent Congress and federal agencies explosive reports of “major security problems” at the company. According to the news reports, the whistleblower’s disclosure not only detailed privacy and cybersecurity vulnerabilities at Twitter, but also included allegations that company management had misled its own corporate board and government regulators about the vulnerabilities. Among other things, these revelations triggered a Congressional inquiry. And now, a plaintiff shareholder has launched a securities class action lawsuit against the company and several of its executives, based on the whistleblower’s allegations. As discussed below, the complaint has several interesting features.
Continue Reading Twitter Hit with Cybersecurity-Related Securities Suit Over Whistleblower Allegations
In my recently published survey of the top topics in the world of directors’ and officers’ liability and insurance, and in connection with my discussion of ESG issues, I briefly mentioned the lawsuit that was filed last week against directors and officers of Starbucks in connection with the company’s “Diversity, Equity, and Inclusion” (DEI) policies. Because there are a number of notable aspects of this lawsuit, it is worth taking a closer look at the suit. As discussed below, the lawsuit represents yet another instance of anti-ESG backlash and illustrates how companies taking the initiative on ESG issues could incur scrutiny and litigation risk. A copy of the recent complaint can be found here and a copy of the plaintiff’s August 31, 2022 press release can be found here.
Continue Reading Starbucks Execs Hit With Suit Alleging the Company’s DEI Policies Violate Civil Rights Laws
In the latest SPAC-related federal court securities class action lawsuit to be filed, a plaintiff shareholder has filed a securities suit against a building management technology company – which merged with a SPAC in 2021 — that recently restated its financial statements for the reporting periods after the company became publicly traded. The complaint in the new lawsuit filed against Latch, Inc. can be found here. As also noted below, in a separate development, a different plaintiff shareholder has filed a separate SPAC-related Delaware Chancery Court action against former directors and officers of a SPAC and the SPAC’s sponsor.
Continue Reading SPAC-Related Securities Suit Filed Against Building Technology Company
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
In the latest development in the long-running FirstEnergy bribery-related derivative lawsuit settlement saga, a federal judge has granted final approval to the proposed settlement in the consolidated action pending in the Southern District of Ohio, albeit while reducing the amount of the plaintiffs’ fee award. The parties will now, with the benefit of the final settlement approval, turn to the Northern District of Ohio, where an unconsolidated parallel action remains pending, and where the presiding judge has recently appointed new counsel to prosecute the separate action. In a rational and orderly world, the separate proceeding in the Northern District of Ohio would be dismissed. However, under the actual conditions, anything could happen.
Continue Reading FirstEnergy Bribery-Related Derivative Suit Settlement Receives Final Approval; What Happens Next?