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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?

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 financial press is already reporting that many of the nearly 600 SPACs currently searching for merger targets may be unable to find suitable merger targets. Indeed, famous investor Bill Ackerman, unable to find a suitable merger target for his largest-ever SPAC, Pershing Square Tontine Holdings, has already thrown in the towel and liquidated the $4 billion SPAC. With hundreds of SPACs facing the end of their search period in this and the next two quarters, there are likely to be many other SPACs that choose to liquidate in the coming months.

One question I have had about this likelihood is whether or not there is a risk of litigation as SPACs redeem investors’ shares. On the one hand, litigation seemingly should be unlikely as investors are getting their money back. Where’s the harm? On the other hand, in our litigious society, the possibility of litigation always seems to be lurking whenever things don’t work out as planned. While the circumstances involved are very case-specific, a lawsuit filed last week in the Delaware Chancery Court, provides of an example of the kind of end-game squabble that could arise as more SPACs liquidate in the coming months.
Continue Reading SPAC Unable to Find Merger Target Caught Up in Pre-Liquidation Litigation

The changes and disruptions caused by the COVID-19 pandemic continue to roil companies’ business operations and financial results. The pandemic’s effects, and the ensuing shifts in business operations and strategic decision-making, are also in some instances continuing to result in securities class action litigation. In the latest example of these phenomena, a plaintiff shareholder has filed a securities suit against the mental health care service provider LifeStance Health Group, Inc. and certain of its executives. The complaint alleges that the Registration Statement prepared in connection with the company’s June 2021 IPO did not adequately disclose the impact on the company’s operations and finances from the lifting of the government stay-at-home orders and did not disclose the pandemic’s impact on the company’s physician workforce. A copy of the August 8, 2022 complaint against the company can be found here.
Continue Reading Mental Health Services Company Hit with Post-IPO COVID-Related Securities Suit

Late last month, when Cornerstone Research released its report on securities class action lawsuit filings in the year’s first six months, it noted that an important first half development was the significant number of suits filed against cryptocurrency and other digital asset-related companies. The recent rise in the number of crypto-related securities suits undoubtedly is related at least in part to the turmoil in the marketplace for digital assets. Last week, the cryptocurrency exchange Coinbase became the latest digital asset company to get hit, as a plaintiff shareholder filed a securities class action lawsuit against the company and certain of its directors and officers. A copy of the complaint can be found here. In addition to the securities lawsuit, the same day a separate plaintiff shareholder filed a shareholder derivative lawsuit against the company as well. The derivative lawsuit complaint can be found here.
Continue Reading Coinbase Hit with New Securities Suit and Derivative 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