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The troubled deal in which Advent International Corporation was to acquire cybersecurity firm Forescout Technologies, Inc. is already the subject of litigation pending in Delaware Chancery Court, and indeed a trial in the Delaware merger dispute case is scheduled for July. Now Forescout shareholders have filed a separate securities lawsuit, alleging that between the time the deal was announced in February 2020 and the time that Forescout announced in May 2020 that Advent had advised Forescout that Advent would not “consummate” the acquisition, Forescout made a series of misrepresentations about the company’s financial condition and performance. Among other things, the investors allege that Forescout misrepresented or omitted to disclose the impact that the COVID-19 outbreak was having on its financial performance.  A copy of the plaintiffs’ June 10, 2020 complaint can be found here.
Continue Reading Securities Suit Alleges Cybersecurity Company Misrepresented COVID-19 Impact

On May 27, 2020, in the latest #MeToo-related securities class action lawsuit to fail to survive initial pleading hurdles, Judge Gloria M. Navarro granted the defendants’ motion to dismiss the securities suit filed against Wynn Resorts based on allegations that the company had failed to disclose sexual misconduct of its former CEO, Stephen Wynn. The ruling joins several other recent dismissal rulings in #MeToo-related securities suits – although, as noted below, there have also been several noteworthy settlements in #MeToo suits as well. A copy of Judge Navarro’s opinion can be found here.
Continue Reading Dismissal Motion Granted in Wynn Resorts #MeToo-Related Securities Suit

As I have documented in prior posts (for example, here), publicly traded life sciences companies are frequent targets of securities class action lawsuits. But life sciences companies’ securities litigation exposure may be well-known, it is not always as appreciated that the securities suits against life sciences companies are often dismissed. Two recent rulings in securities suits against life sciences companies – Antares Pharma and Nabriva Therapeutics – provide recent examples of securities suits in which the courts have granted the companies’ dismissal motions. The rulings illustrate the extent to which life sciences companies often are able to successfully defend themselves against securities suits.
Continue Reading Life Sciences Companies: Frequent Securities Suits Frequently Dismissed

Since the outset of the coronavirus outbreak, a relatively modest number of COVID-19 related securities suits have been filed. However in the past two days, two additional coronavirus-related securities suits were filed, bringing the total number of coronavirus-related securities suits to nine, so far. The two new suits were filed against Sorrento Therapeutics, a biopharma company, and Carnival Corporation, a cruise ship line. The Sorrento complaint can be found here and the Carnival Corporation complaint can be found here.
Continue Reading Two Additional Coronavirus Outbreak-Related Securities Suits Filed

On May 20, 2020, a plaintiff shareholder filed the latest securities class action lawsuit asserting claims based on COVID-19-related allegations. The lawsuit, filed against Elanco Animal Health, Inc., raises allegations concerning the company’s May 7, 2020 earning release, in which the company announced a significant revenue downturn that the company ascribed to the coronavirus outbreak. The complaint alleges that, in connection with the revenue downturn, the company announced that it had made changes in its distribution channels that had affected channel inventory levels and that in turn impacted the company’s financial results. A copy of the complaint can be found here.
Continue Reading COVID 19-Related Securities Suit Filed Against Animal Supply Company

In what is the latest variant of coronavirus-Related D&O claims, a plaintiff shareholder has filed class action lawsuit in Delaware State Court against the board of media technology Xperi with respect to the company’s planned merger with TiVo Corporation. Among other things, the plaintiff alleges that the defendant board members breached their fiduciary duties by failing to provide investors with adequate disclosures about the impact of the coronavirus outbreak on the deal and failing to reassess the deal in view of the fact that the pandemic represents a “Material Adverse Event” under the merger agreement. A copy of the plaintiff’s May 15, 2020 complaint can be found here. Alison Frankel’s May 18, 2020 post about the lawsuit on her On the Case blog can be found here.
Continue Reading Shareholder Files State Court Class Action Over COVID-19 Impact on Planned Merger

In March 2018, the U.S. Supreme Court unanimously held in Cyan that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. As a result, defendants could face the prospect of parallel litigation in both federal and state court, with no means of consolidating the proceedings. In the following guest post, Bruce G. Vanyo, Richard H. Zelichov, Michael J. Lohnes, and Jonathan Rotenberg, all of the Katten law firm, take a look at Cyan’s impact and review some recent positive developments that address some of the concerns Cyan has led to. 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: Section 11 Cases in State Court Post-Cyan – Is the Tide Turning?

Here at The D&O Diary, we watch securities class action litigation filings closely in order to try to identify trends as they emerge. Recently, we have been watching in particular for coronavirus-related securities litigation filings, and reporting on new filings on this blog. However, it appears that despite all of our vigilance, a coronavirus-related securities class action lawsuit filed last month escaped our notice. This previously overlooked lawsuit is described below. As noted in the discussion section, this case may actually represent a significant example of at least one type of coronavirus-related securities suit that we may see more of in the months ahead.
Continue Reading Add this Previously Filed Suit to the List of Coronavirus-Related Securities Lawsuits

As part of a continuing series, I have been participating in sessions that the Professional Liability Underwriting Society (PLUS) has organized addressing the potential D&O liability and insurance issues arising out of the COVID-19 outbreak. I have been joined in these recorded sessions by my good friends Carl Metzger of the Goodwin Procter law firm…

In early March, when I first wrote about the possibility of coronavirus-related D&O claims, there were then a total of 43 confirmed cases of COVID-19 in the U.S. and six deaths. In early April, when I published my first interim update to my initial post, the number of confirmed COVID-19 cases in the U.S. had grown to 267,436 and the number of deaths was over 10,400. Now, a month later, the number of confirmed cases in the U.S. has exceeded 1.2 million and the number of deaths is over 78,000. By now it is apparent that the coronavirus-outbreak represents the most significant public health crisis in the U.S. in more than a century. The disease has also had a massive impact on the economy, both within the U.S. and globally, in ways that are only now starting to be fully appreciated.
Continue Reading Coronavirus and D&O Insurance: The Latest Interim Update