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In the latest SEC enforcement action relating to alleged misrepresentations pertaining to the coronavirus outbreak, the agency has filed a securities fraud action against the President and Chief Science Officer of a biotechnology company who allegedly made false statements to investors concerning the status of his company’s COVID-19 test. The enforcement action complaint also contains allegations concerning the individual’s statements about the status of his company’s delinquent SEC reporting. The enforcement action underscores the fact that the SEC intends to enforce the securities laws with respect to company statements falsely suggesting the company is in a position to profit from the coronavirus outbreak. A copy of the SEC’s September 25, 2020 complaint can be found here. The SEC’s September 25, 2020 press release regarding the enforcement action can be found here.
Continue Reading SEC Files COVID-19-Related Enforcement Action Against Biotech Company Exec

In the latest D&O lawsuit based on allegations related to the COVID-19 outbreak, a plaintiff shareholder has filed derivative lawsuit against the board of a vaccine developer, Vaxart, claiming that corporate insiders and the company’s largest investor profited when the company falsely claimed that it was part of the federal government’s accelerated program for the development of a COVID-19 vaccine. The complaint in the lawsuit, which alleges that the defendants violated their fiduciary duties and federal securities laws regarding proxy disclosures, can be found here.
Continue Reading Vaccine Company Hit with COVID-19-Related Derivative Lawsuit

The Louvre Museum, Paris

I hope readers will recall that several days ago, in a fit of pandemic fatigue and nostalgia, I posted an article in which I reminisced about interesting art I have experienced while traveling, including pictures of the art I had encountered. I also invited readers to send me pictures of their art experiences, with my promise to publish future posts featuring readers’ pictures. In response to my art nostalgia post, I received several notes saying kind things about the article, but so far only one reader has actually submitted pictures. Even though I have received only one reader submission, I am going to post the submitted pictures here, both because I really like the submitted pictures, and because I hope that by publishing these pictures, others might be encouraged to send in pictures as well.
Continue Reading A Reader’s Art, Travel, and Nostalgia Pictures

A California-based vaccine development company has been hit with a coronavirus outbreak-related securities class action lawsuit, based on the company’s statements about its COVID-19 vaccine development efforts and about the company’s participation in a federal government vaccine development program. In addition, in a separate development, a different company has been hit with a coronavirus outbreak-related shareholder derivative lawsuit, based on the company’s statements concerning its ability to provide COVID-19 testing kits.
Continue Reading Two Companies Hit with COVID-19-Related D&O Lawsuits

In a development that will come as a surprise to no one who has been reading the business news pages over the last few weeks, Eastman Kodak and certain of its executives have been hit with a securities class action lawsuit based on allegations surrounding the disclosure of a $765 loan to the company from a government agency for the company to develop pharmaceutical materials, including ingredients of COVID-19 drugs, as well as on allegations of insider trading relating to the loan disclosures. As discussed below, the lawsuit is the latest in a series of securities class action lawsuits that have been filed related to the coronavirus outbreak. The complaint in the Kodak lawsuit can be found here.
Continue Reading Kodak Hit With Securities Suit Over COVID-19-Related Loan Disclosure and Related Trading

As the coronavirus outbreak in the U.S. approaches the beginning of its sixth month, Congress continues to debate whether and to what extent the federal government should provide further economic support, relief, and stimulus. The House of Representatives and the Senate recently have proposed two very different coronavirus relief packages and efforts to reconcile the policy differences reflected in the two different approaches have to date not been successful. But while it remains to be seen what if anything ultimately may emerge, among the critical aspects of the proposed packages worth considering are the liability shield provisions in the proposed Senate package. The Senate liability shield bill, if enacted, could significantly diminish the potential liabilities of businesses and other organizations for the transmission of the COVID-19 disease in their facilities. These liability restrictions could have significant implications for these organizations’ liability insurers as well. And, as discussed below, the adoption of the kinds of liability restrictions that the Senate has proposed could have implications – at least indirectly —  for the organizations’ D&O insurers, too.
Continue Reading Potential Impact of Proposed Coronavirus Liability Shield

Since I first started tallying the coronavirus-related securities class action lawsuits back in March, a recurring issue has emerged – it has become increasingly difficult to keep a firm handle on what makes a case “coronavirus-related.” Even in just the short time I have been tracking the cases, there have already been a number of close calls, as I have previously discussed, for example, here. A couple of new lawsuits filed this week present further challenges. As discussed below, I have concluded that both of the two new lawsuits count as coronavirus-related, but their inclusion on my list will probably cause my tally to diverge from other similar tallies even further than is already the case now.
Continue Reading Coronavirus-Related Securities Suits: Do These Two New Cases Count?

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…

Early this spring, when I wrote the first installment in this series of updates about the impact of the coronavirus outbreak on the D&O liability and insurance arena, the general assumption was that the virus would spread for a couple of months during the spring and that by summertime things would be returning to normal. Very few people I know were predicting that when July actually did roll around that the number of confirmed cases, both nationally and globally, would be setting daily record highs. Even as recently as my most recent update last month, there were hopeful signs as the country re-opened for business. Unfortunately, the disease has proven to be more widely-distributed and the outbreak longer-lasting than earlier anticipated, and the expectations about the pandemic’s economic, social, and political impacts have also changed. All of these developments have implications for the pandemic’s impact on the D&O arena as well. In this latest update, I review the the pandemic’s D&O consequences and likely future impact.
Continue Reading COVID-19 and D&O Insurance: July Update