vivintWe 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

supreme courtThe U.S. Supreme Court has agreed to take up a case that will address a recurring issue that has arisen in the securities class action litigation arena – that is, whether or not the alleged failure to make a disclosure required by Item 303 of Reg. S-K is an actionable omission under Section 10(b) and Rule 10b-5. A circuit split has emerged on this issue, with the Second Circuit holding that Item 303 does create an actionable duty of disclosure, while the Ninth and Third Circuits have held that it does not. The Court’s grant of the writ of certiorari in the case of Leidos, Inc. v. Indiana Public Retirement System will afford the Court an opportunity to resolve the circuit split and to address the question of whether Item 303 creates an actionable disclosure duty. The U.S. Supreme Court’s March 27, 2017 order granting the writ of certiorari can be found here.
Continue Reading U.S. Supreme Court to Decide Whether Item 303 Creates Actionable Disclosure Duty

paul weiss largeIn the wake of the U.S. Supreme Court’s March 24, 2015 opinion in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (here), there was a great deal of speculation about what the decision’s practical impact would be and how the case would be applied in the lower courts. On March 4, 2016, the Second Circuit issued an important opinion in Tongue v. Sanofi (here) interpreting and applying Omnicare. In the following guest post, the Paul Weiss law firm take a look at the Sanofi decision and discuss Second Circuit’s narrow interpretation and application of Omnicare, and the Second Circuit’s holding that issuers need not disclose information merely because it cuts against their opinions or projections. I would like to thank the attorneys from Paul Weiss for their willingness to publish their article as a guest post on this site. I welcome guest post submissions 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 Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Second Circuit Ruling in Sanofi Narrowly Interprets Omnicare

sdnyRegular readers of this blog know that the filing of a shareholder lawsuit following the disclosure of a bribery investigation is a well-established phenomenon (as discussed, for example, here). Readers will also recall that in March 2015 when the U.S. Supreme Court issued its Omnicare decision (about which refer here), there was significant discussion whether the Court’s ruling that omitted facts could make a statement of opinion misleading and support liability under the securities laws could prove helpful to plaintiffs and even lead to more securities lawsuits premised on alleged omissions.

The trend lines for both of these issues came together in a recent dismissal motion ruling in the Southern District of New York in the securities class action lawsuit involving Och-Ziff Capital Management Group. In a February 17, 2016 opinion (here), Southern District of New York Judge J. Paul Oetken ruled that the defendants’ alleged failure to disclosure alleged but uncharged violations of the FCPA and sanctions laws was not actionable. However, he also held that the defendants’ failure to disclose the existence of the DoJ and SEC investigations was actionable, in light of the statements the company did make about its exposure to regulatory investigations. As discussed below, the Court’s conclusion that these alleged omissions were actionable was made with express reference to and reliance on the Supreme Court’s Omnicare decision.
Continue Reading Omissions Regarding Bribery Investigation Held Actionable

skadden_logo_noLLP_bigAs I discuss in the accompanying post, on March 24, 2015, the U.S. Supreme Court issues its opinion in the Omnicare case. In the following guest post, the Skadden law firm summarizes the case and its holding. A version of the guest post previously was published as a Skadden client alert. I would like