In two dismissal motion grants last week in pending SPAC-related securities suits, the respective courts’ rulings could have potential significance for other pending or prospective SPAC-related cases. The January 10, 2023, ruling in the SPAC-related suit involving DraftKings has important implications for the many pending SPAC-related cases based on short seller reports, and the January 11, 2023, ruling in the Lucid case has potential implications for SPAC-related securities suits based on alleged pre-merger misrepresentations. The two rulings and their potential significance are discussed below.
The extraordinary levels of securities litigation filings during 2017 have been the subject of numerous commentaries, including on this blog. In a March 19, 2018 post on The CLS Blue Sky Blog, Columbia Law School Professor John Coffee adds his observations to the discussion about the 2017 securities suit filings. In his article, entitled “Securities Litigation in 2017: It Was the Best of Times, It Was the Worst of Times” (here), Coffee’s commentary about last year’s securities suit filings is consistent with prior reports and analyses. One specific aspect of his commentary – relating to the phenomenon of event-driven securities litigation – is particularly noteworthy, as discussed below.
Continue Reading Scrutinizing Event-Driven Securities Litigation
We have seen the scenario before – shortly after its debut, an IPO company releases unexpected results, the company’s share price declines, and the lawsuits appear. Usually when this happens, the updated results pertain to reporting periods following the IPO. But what about a situation where the disappointing results pertain to a reporting period that was completed prior to the IPO – in fact, the day before the IPO? That was the situation involving Vivint Solar, where the company released results for the reporting period ending September 30, 2014 – that is, just a day before the company’s October 1, 2014 IPO –several weeks after the company’s debut.
Continue Reading Second Circuit Rejects First Circuit Test Requiring IPO Company Interim Financial Information Disclosure
In the wake of the era of corporate scandals, Congress enacted the Sarbanes-Oxley Act. Section 406 of the Act required the SEC to promulgate rules requiring reporting companies to disclose whether or not they have adopted a code of ethics for its financial officers. The SEC subsequently issued rules implementing this directive, and as a result companies facing the new disclosure obligations adopted codes of ethics.
Continue Reading Ninth Circuit: Ethics Code Violations Insufficient to State Securities Law Claim
On Monday, June 11, 2012, the United States Supreme Court granted the petition of Amgen for a writ of certiorari in a securities lawsuit pending against the company. As a result, next term the Court will be addressing the question of whether securities plaintiffs must establish in their class certification petition that the alleged misrepresentation…
In a February 10, 2011 opinion (here), the Second Circuit reversed the lower court’s dismissal of the securities class action lawsuit relating to The Blackstone Group’s June 2007 IPO. The decision, which represents a noteworthy victory for plaintiffs, contains an extensive analysis of "materiality" requirements and could prove significant in the many other…
There was a time when it was relatively rare for the Supreme Court to take up securities cases. Until recently, the Court basically went several years between cases filed under the securities laws. Those days are clearly over, as the Court has granted cert petitions in several securities cases in recent years, including the Merck…