The COVID-19 pandemic was a disruptive event with the consequences continuing to reverberate through the economy and the business environment, in ways that not only affect companies’ operations and financial performance, but, for at least some companies, in ways that lead to securities class action litigation. So even though the initial COVID-19 outbreak in the U.S. was over four years ago, businesses continue to experience operational consequences from the pandemic, in some cases resulting in securities suits. The latest example is the lawsuit filed late last week against medical testing and diagnostic company QuidelOrtho Corporation, whose testing services revenue declined as the coronavirus transition to endemic status. A copy of the April 12, 2024, complaint against QuidelOrtho can be found here.Continue Reading Diagnostic Testing Company Hit With COVID-Related Securities Suit

Readers know that since the initial coronavirus-related outbreak in the U.S. in March 2020, I have been tracking the COVID-related securities suit filings. Even though the four-year mark since the initial outbreak recently passed, and even though it has now been a considerable amount of time since businesses fully reopened from government shutdowns, COVID-related securities suits continue to be filed. Earlier this week, a plaintiff shareholder filed a securities lawsuit against health services management company Agilon Health, in which the plaintiff alleged that the company had understated the impact of the COVID-19 on patient utilization rates, thereby overstating key financial metrics. A copy of the April 2, 2024, complaint can be found here.Continue Reading Health Services Management Company Hit with COVID-19 Related Securities Suit

As readers know, in recent years I have been tracking two securities class action litigation filing trends:  the filing of SPAC-related lawsuits, and the filing of COVID-related lawsuits. In a noteworthy development, a securities suit filed last week embodies both of these filing trends. That is, a company that was formed through a SPAC merger has been hit with a securities suit based on COVID-related allegations. As discussed below, the new lawsuit has several interesting features. A copy of the February 28, 2024, complaint can be found here.Continue Reading Two-Fer: SPAC-Merged Company Hit With COVID-Related Securities Suit        

   

I think we all recognize that the disruptions from the COVID pandemic continue to reverberate through the economy. Many industries and many companies are still trying to get back to equilibrium. The pandemic continues to impact companies, their operations, and their financial results. A new lawsuit filed against the sporting goods retailer Dick’s Sporting Goods(DSG)  illustrates how the pandemic-related factors continue to affect companies and translate into securities litigation. DSG was one of the companies that prospered at the outset of the pandemic; when conditions normalized, the company claimed it would be able to keep the positive momentum going. However, after the company announced disappointing results, its share price declined, and now a shareholder plaintiff has filed a securities class action lawsuit, in the latest in a series of COVID-related securities suits. A copy of the February 16, 2024, lawsuit against the company can be found here.Continue Reading COVID-Related Results Lead to Securities Suit    

A few days ago when I published a post discussing a new COVID-19-related securities lawsuit I expressed my surprise that pandemic-related suits were still being filed in 2024, particularly after the pace of new coronavirus-related suits tailed off completely in the latter half of 2023. Well, it appears that the recent new case filing not just a single anomaly, as this past week yet another new pandemic-related securities lawsuit was filed.

On January 19, 2024, a plaintiff shareholder filed a securities suit against BioVie, a developmental stage biotech company, after the company reported that clinical trials for its Phase 3 drug candidate produced results the company concluded deviated from protocols and Good Clinical Practice (GCP) because the pandemic had limited patient access to clinical trial sites. A copy of the new complaint can be found here.Continue Reading Biotech Hit with Securities Suit After Pandemic Impact on Clinical Trials

In my recent round-up of the Top D&O stories of 2023, I noted that one of the key drivers contributing to the number of securities class action lawsuit filings last year was the presence of macroeconomic factors affecting company operations and financial results. Among these factors was supply chain disruption. While the pandemic-related disruptions that snarled supply chains in 2021 and 2022 appeared to have eased during 2023, the impact from the earlier supply chain disruptions continues to weigh on some businesses.

 In the latest example of how the prior supply chain disruption continues to affect businesses and how that can translate into securities litigation, on January 16, 2024, a plaintiff shareholder filed a securities lawsuit against advanced driver assistance system company Mobileye Global, after the company announced that it anticipated lower than expected sales of its key product because its leading customers had built up product in 2023 in order to avoid supply disruptions of the type that resulted from supply chain constraints in 2021 and 2022. This latest lawsuit shows how the consequences from pandemic related supply chain disruptions are continuing to weigh on businesses and result in securities litigation. A copy of the January 16, 2024 complaint can be found here.Continue Reading Supply Chain Woes Causing Inventory Build-Up Leads to Securities Suit

One of the most distinct securities class action lawsuit filing phenomena since the outbreak of COVID-19 in the U.S. in March 2020 has been the surge of pandemic-related securities suits,  particularly during the period 2020 through 2022. This securities suit filing trend even continued into 2023, although the incidence of COVID-related suits dwindled during the year. However, in an unexpected development, a plaintiff shareholder has now filed yet another COVID-related securities suit against BioNTech, the German biotechnology company that, along with its partner Pfizer, was lionized for helping to develop a COVID-19 vaccine. The company was hit with a securities suit after its share price declined following a sizeable inventory write-off. A copy of the January 12, 2024, complaint against the company can be found here.Continue Reading A New COVID-Related Securities Suit for the New Year

Nelson Kefauver

In the following guest post, Nelson Kefauver, Head of Profin Underwriting at Intact Insurance, takes a look at how three frequent industry predictions from the recent past have turned out.  Nelson’s comments are specific to the private and non-profit D&O insurance space and not do not refer to the public company D&O insurance

As I have documented on this site, many COVID-related securities suits have been filed since the initial outbreak of the pandemic in March 2020. At the core of many of these lawsuits are corporate claims that the defendant companies were positioned to profit from the pandemic. The U.S. Department of Justice now reports that a biotech executive has pleaded guilty to securities fraud and other charges in connection with his company’s false claims at the outset of the pandemic that it had developed a new blood-based test for COVID-19. A copy of the Department of Justice’s December 8, 2023, press release about the guilty plea can be found here.Continue Reading Biotech Exec Pleads Guilty to COVID-Related Securities Fraud

In my recent roundup of the top stories in the world of directors’ and officers’ liability and insurance, I noted that a host of macroeconomic factors – such as supply chain disruptions and labor supply constraints — continue to weigh on companies and, in some instances, translate into securities class action litigation. I have also noted in numerous prior posts how COVID-19 has itself resulted in securities lawsuit filings. In the latest example of a securities suit filing resulting from these various phenomena, last week a shareholder plaintiff filed a securities lawsuit against the robotic aircraft systems development and service company AeroVironment after the company delivered disappointing results due to supply chain woes resulting from COVID-19. The complaint is both representative of these types of cases and illustrative of how these kinds of concerns, even after a significant time lag, can result in a current securities lawsuit filing. A copy of the plaintiff’s August 30, 2023, complaint can be found here.Continue Reading Robotic Aircraft Company Hit with COVID-19 and Supply Chain-Related Securities Suit