With coronavirus-related developments consuming all of the attention these days, it might be easy to forget other unrelated claims trends are continuing to develop and unfold. One important pre-pandemic trend that has continued to develop is the rise of D&O claims arising out of cybersecurity incidents. In the latest sign that this claims trend remains important, a plaintiff shareholder has filed a derivative lawsuit against certain directors and officers of Laboratory Corporation of America, in connection with two cybersecurity incidents involving the company. As detailed below, the first of these two incidents involved a data breach that took place at one of LabCorp’s third-party service providers. A copy of the complaint, filed in Delaware Chancery Court on April 28, 2020, can be found here.
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litigation trends
Healthcare Software Services Company Hit with COVID-19 Related Securities Suit
In what is the fifth coronavirus outbreak-related securities class action lawsuit to date, a plaintiff shareholder has filed a securities class action lawsuit against a healthcare information software services company. The lawsuit is based on alleged misrepresentations the company allegedly made with respect to a contract the company had entered for the sale of COVID-19 test kits. The company’s share price rose on news of the agreement, but later fell following an online report raising questions about the agreement. The plaintiff’s April 29, 2020 complaint can be found here.
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Coronavirus-Related Suits Hit Higher Ed Institutions
In the early stages of the coronavirus-related close-down, most colleges and universities terminated live classes, switched to online lessons, and sent their students home. In some cases, affected students have filed lawsuits against their schools, seeking to recover tuition and fees paid for classes, housing, and food. The following posts discuss the extent of the exposure that these kinds of claims represent for these institutions’ boards of directors or boards of trustees.
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A Closer Look at Securities Suits Against Cannabis Companies
As I have detailed in prior post on this site (most recently here), in recent months plaintiffs’ lawyers have filed a number of securities class action lawsuits against companies in cannabis-related businesses. According to an April 22, 20202 report from the Goodwin Procter law firm entitled “Update on Securities Litigation Against Cannabis Companies” (here), the number of securities suits against cannabis companies jumped significantly in 2019 compared to 2018. As discussed further below, these litigation trends have continued in 2020.
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U.S.-Listed Chinese Real Estate Firm Hit with Coronavirus-Related Securities Suit
In the latest securities suit related to the coronavirus outbreak, a plaintiff shareholder has filed a U.S. securities class action lawsuit against a Chinese real estate firm whose American Depositary Shares (ADSs) are listed on the NYSE, based on allegations that the company’s January 2020 IPO offering documents failed to disclose the impact of the outbreak on the company’s residential real estate operations in China. This latest filing is the first coronavirus-related securities lawsuit in the U.S. against a non-U.S. company. A copy of the plaintiff’s April 24, 2020 complaint can be found here.
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Guest Post: First-Quarter Securities Class Actions Respond To Outbreak

In the following guest post, Nessim Mezrahi discusses his analysis of the First Quarter 2020 securities class action lawsuit exposure. Mezrahi is cofounder and CEO of SAR, a securities class action data analytics and software company. SAR’s April 10, 2020 press release discussing its 1Q20 securities class action litigation analysis can be found here. A version of the following article previously was published on Law360. 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Nessim’s article.
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Zoom Hit With Securities Suit Raising Pandemic-Linked Allegations Based on Privacy Concerns
More than a month ago, when I first wrote about the possibility that the coronavirus outbreak could lead to D&O claims, I noted that the pandemic was having a devastating impact on certain industries. At the same time, I noted that the viral outbreak could prove a boon for other industries; among the industries I cited as a possible winner was the video teleconferencing industry. Indeed, since the onset of the outbreak’s onset, many of us have for the first time used the services of Zoom Video Telecommunications and Zoom video teleconferences have been proliferating. But while Zoom usage has soared, privacy and security concerns have also arisen.
Now Zoom has been hit with a securities class action lawsuit based on allegations that the surge in usage following the coronavirus outbreak allegedly revealed allegedly undisclosed weaknesses in company’s security, and alleged privacy and security weaknesses contrary to the company’s alleged representations. As discussed below, in addition to representing an example of a coronavirus-related securities suit, the new lawsuit also represents an example of the ways in which privacy concerns can lead to D&O claims.
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Plaintiffs File a Slew of Cryptocurrency-Related Securities Suits
Here at The D&O Diary, we make it our business to watch securities class action lawsuit filings as they come in, to keep an eye on filing trends as they develop. For example, recently we have been looking for coronavirus-related securities class action lawsuits. But while we were scanning the horizon for COVID-19 suits, something else unexpectedly materialized – all of the sudden, on April 3, 2020, a great big pile of cryptocurrency-related securities class action lawsuits were filed in the Southern District of New York. The filing of eleven total cryptocurrency-related securities suits in a single day is really unprecedented in my experience.
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The Continuing Case for Securities Litigation Reform
As the number and rate of securities class action lawsuit filings has remained at historically high levels over the past three years, there have been renewed calls for securities class action litigation reform, as I have detailed in prior post (for example, here). According to a March 25, 2020 paper by the U.S. Chamber Institute of Legal Reform (ILR), the “broken securities class action system continues out of control” and the need for securities litigation reform remains urgent. On April 1, 2020, I participated in an ILR event, along with ILR President Harold Kim and Andrew Pincus of the Mayer Brown law firm, entitled “An Update on Securities Litigation,” in which we discussed key recent securities litigation developments and the continuing case for securities litigation reform. The paper can be found here and a video recording of the ILR event can be found here.
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Signet Jewelers Settles #MeToo-Related Securities Suit for $240 Million
In yet another significant #MeToo-related development, the parties to the Signet Jewelers securities class action lawsuit have agreed to settle the case for $240 million. There are a number of interesting features to the settlement, as discussed below; among other things, over $200 million of the settlement amount is to be funded by insurance. The settlement is subject to court approval. The plaintiff’s March 26, 2020 letter to the court regarding the settlement can be found here. The parties’ stipulation of settlement can be found here.
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