securities litigation risk

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Last summer, I noted on this blog the filing of what turned out to be a total of four separate securities class action lawsuits that were filed against Chinese internet-business firms following a crackdown on their activities by the Chinese cybersecurity regulator. I noted at the time that though these four cases involved circumstances arguably unique to China the cases nevertheless represented examples of the ways in which regulatory risk could translate into securities class action litigation risk.

Last week, two more securities suits were filed against Chinese companies – both involved in the business of providing private educational and tutoring services, a sector that during the past year has been the target of a governmental crackdown – underscoring the extent to which regulatory exposures can lead to securities litigation risk. As discussed below, these latest cases, along with the four prior cases filed last summer, also arguably demonstrate the ways in which securities litigation risk can arise out of political risk.
Continue Reading Political Risk as Securities Litigation Risk

John Cheffers

One of the key considerations related securities class action litigation risk is company size as measured by market capitalization. In the following guest post, John Cheffers details this relation between company size and securities class action litigation risk. John is Associate Counsel and Director of Research for Watchdog Research. I would like to thank John for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is John’s article.
Continue Reading Guest Post: Analyzing Securities Class Actions by Size

As I have previously noted on this blog, one recurring source of securities class action litigation exposure for publicly traded companies is the companies’ underlying environmental liabilities. In the latest example of this type of litigation, a plaintiff shareholder has now filed a securities suit against The Chemours Company, a chemical company that spun out of E.I. du Pont de Nemours and Company (“DuPont”) in July 2015. One of the extraordinary things about the new securities suit is that it draws heavily on allegations Chemours itself raised in a 2019 Delaware Chancery Court lawsuit it filed against DuPont, in which, among other things, Chemours alleges that when DuPont spun out the company, its environmental liabilities reserves were “spectacularly” inadequate. A copy of the on October 8, 2019 securities class action complaint filed in the District of Delaware against Chemours, its CEO, and its CFO can be found here.
Continue Reading Environmental Liability-Related Securities Suit Filed against DuPont Spin-off Chemours

The news late last week that London’s transport authority had stripped ride-hailing firm Uber of its ride-hire license on the grounds that it was “unfit to operate” in the U.K. capital was merely the latest blow to the company, following a string of scandals, probes, and damaging revelations. Now the company – which, despite its enormous size, is still a privately held firm — has been hit with a federal court securities class action lawsuit, the most recent instance where one of the high-flying “unicorn” companies has been hit with a securities fraud lawsuit after a decline in fortune. The new lawsuit has a number of interesting features, discussed below.
Continue Reading Though a Private Company, Uber Hit With Securities Class Action Lawsuit