As I have documented on this site, conservative advocacy and legal groups have been pursuing an aggressive ESG backlash campaign. Among other things, these groups’ efforts have caused several high-profile companies to walk back their DEI initiatives. These groups have also pushed for state-level anti-ESG legislation and have also even pursued anti-ESG litigation. The litigation results have been mixed at best, as noted for example here. However, in the ESG-backlash securities lawsuit filed by a conservative advocacy group against Target in the wake of a consumer boycott following the company’s LGBT “Pride Month” campaign, a federal district court has denied the defendants’ motion to dismiss. As discussed below, there are several interesting features of the court’s ruling. A copy of the Court’s December 4, 2024, opinion can be found here.Continue Reading ESG Backlash Securities Suit Against Target Survives Dismissal Motion

It is now well-recognized, as Bloomberg columnist Matt Levine has famously said, that “Everything Everywhere is securities fraud.” Just the same, it does come as a surprise sometimes to see the things that make their way into securities class action lawsuit complaints. In the latest example of this phenomenon at work, a plaintiff shareholder has filed a securities class action lawsuit against the restaurant company Chipotle Mexican Grill, as a result of a social media campaign raising questions about the chain’s meal portions. To combat the social media chatter, the company concentrated on providing generous portions, which cut into the company’s margins – and drew a securities lawsuit. A copy of the November 11, 2024, complaint in the suit can be found here.Continue Reading Social Media Squabble Over Restaurant Portions Begets Securities Suit

Just days after the U.S. Supreme Court agreed to take up the Facebook/Cambridge Analytica securities case concerning risk factor disclosures (as discussed here), the Court has now agreed to take up yet another securities case, this time in a case involving Nvidia and involving the standards for pleading scienter and falsity under the PSLRA. The NVIDIA case involves alleged fraud in connection with the company’s disclosures concerning its sales of graphics processing units (GPU) to cryptocurrency companies as a component of its overall GPU sales. The specific questions the case presents to the Supreme Court concern what and how a plaintiff must plead when pleading scienter and falsity. Because the case involves the PSLRA’s “exacting pleading requirements,” the case potentially could prove to be very significant. A copy of the Court’s June 17, 2024 Order granting the petition for writ of certiorari can be found here.Continue Reading Supreme Court Agrees to Take Up Nvidia Securities Suit On Pleading Standards Issues

Readers of this blog know that in recent years, plaintiffs’ lawyers have filed a number of D&O lawsuits against companies that experience cybersecurity-related incidents. Overall, the plaintiffs’ track record on these cases is at best mixed, and a number of high-profile cases have been dismissed. In the latest example of the dismissal of a cybersecurity-related securities suit, the court in the Capital One Financial Corporation data breach-related securities class action lawsuit has granted the defendants’ motion to dismiss. The September 13, 2022 dismissal order in the case can be found here.
Continue Reading Capital One Data Breach-Related Securities Suit Dismissed

As readers of this blog well know, over the last 18 months or so there has been an onslaught of SPAC-related securities class action litigation. Most of these cases have only just been filed and therefore have not yet reached the motion to dismiss stage. However, a number of the earlier filed cases are now reaching that dismissal motion stage, and although the results so far are mixed, some of the cases are surviving the initial pleading hurdles, at least in part.

On July 1 ,2022, and in the latest example of a SPAC-related securities suit surviving the dismissal motion at least in part, Northern District of California Judge Susan Illston partially denied the motion to dismiss in the SPAC-related securities suit filed against Velodyne Lidar and certain of the executives of the SPAC into which Velodyne merged. As discussed below, there are several interesting features of Judge Illston’s opinion, a copy of which can be found here.
Continue Reading SPAC-Related Securities Suit Partially Survives Dismissal Motion

As readers of this blog know, as a follow-on effect to the massive wave of SPAC activity in the U.S., there has also been a surge of securities class action lawsuits involving companies that engaged in SPAC transactions. Many of these suits have only just been filed, so it is too early to tell how they will fare. But some of the cases are now reaching the motion to dismiss stage. If the recent motion to dismiss ruling in the SPAC-related lawsuit against mobile gaming technology company Skillz is any indication, many of these cases could encounter substantial hurdles as they go forward.
Continue Reading Motion to Dismiss Granted in SPAC-Related Securities Suit Against Gaming Company

As I have noted in recent posts (here, for example), SPAC-related securities suit filings continue to accumulate and represent a significant current securities litigation phenomenon. But while the number of suits continues to mount, relatively few of these cases have yet reached the dismissal stage. In a recent ruling, however, the defendant company’s motion to dismiss in a SPAC-related securities suit was substantially denied as to the company itself and its top executives. In particular, the claims based on allegations that the company, Romeo Power, and its senior officials made supply chain misrepresentations were sustained, though the related claims against three former executives of the SPAC with which Romeo had merged were dismissed. A copy of the June 2, 2022 opinion in the case can be found here.
Continue Reading Dismissal Denied in SPAC-Related Securities Suit Alleging Supply Chain Misrepresentations

In the latest edition of its annual report, the Sidley Austin law firm takes a detailed look at important securities litigation developments in 2021 relating to life sciences companies. The report includes not only a review of life sciences companies’ securities litigation class action filings trends but also examines life sciences companies’ track record in the courts, both with respect to motions to dismiss in the district courts and on appeal. The law firm’s report, entitled “Securities Class Actions in the Life Sciences Sector: 2021 Annual Survey” can be found here. The same site also includes a link to a short summary of the report.
Continue Reading A Detailed Look at the 2021 Securities Litigation Against Life Sciences Companies

As I have noted in numerous prior posts on this site, over the course of the last two years plaintiffs’ lawyers have filed a host of COVID-19-related securities claims. With the passage of time, many of these cases have now worked their way to the motion to dismiss stage. Although the results have been mixed, the dismissal motions have been granted in several cases. In the latest example of favorable outcome for a COVID-19-related lawsuit defendant, the court in the COVID-19-related securities suit pending against Chembio Diagnostics and its executives recently granted the corporate defendants’ dismissal motion. However, in an odd twist, the court denied the dismissal motion of the company’s offering underwriters. A copy of the court’s February 23, 2022 order in the case can be found here.
Continue Reading COVID-19-Related Securities Suit Against Diagnostic Testing Company Dismissed

As I noted at the time, earlier this year SEC Chair Gary Gensler spoke publicly about the need for revisions to Rule 10b5-1, the regulatory provision that allows corporate executives, subject to certain requirements, to trade in their holdings of their companies’ securities. Rule 10b5-1 has long been criticized because of perceived abuses. On December 15, 2021, the SEC released proposed revisions to the Rule. Among other things, the proposed revisions strengthen the requirements to access the affirmative defenses afforded under the Rule, and also enhance disclosure requirements for companies whose executives enter into trading plans pursuant to the Rule. The proposed changes are subject to a 45-day comment period after the proposed amendments are published in the Federal Register.
Continue Reading SEC Proposes Amendments to Rule 10b5-1 Trading Plan Provisions