The troubled deal in which Advent International Corporation was to acquire cybersecurity firm Forescout Technologies, Inc. is already the subject of litigation pending in Delaware Chancery Court, and indeed a trial in the Delaware merger dispute case is scheduled for July. Now Forescout shareholders have filed a separate securities lawsuit, alleging that between the time the deal was announced in February 2020 and the time that Forescout announced in May 2020 that Advent had advised Forescout that Advent would not “consummate” the acquisition, Forescout made a series of misrepresentations about the company’s financial condition and performance. Among other things, the investors allege that Forescout misrepresented or omitted to disclose the impact that the COVID-19 outbreak was having on its financial performance.  A copy of the plaintiffs’ June 10, 2020 complaint can be found here.
Continue Reading Securities Suit Alleges Cybersecurity Company Misrepresented COVID-19 Impact

In what is the fifth coronavirus outbreak-related securities class action lawsuit to date, a plaintiff shareholder has filed a securities class action lawsuit against a healthcare information software services company. The lawsuit is based on alleged misrepresentations the company allegedly made with respect to a contract the company had entered for the sale of COVID-19 test kits. The company’s share price rose on news of the agreement, but later fell following an online report raising questions about the agreement. The plaintiff’s April 29, 2020 complaint can be found here.
Continue Reading Healthcare Software Services Company Hit with COVID-19 Related Securities Suit

Nessim Mezrahi

In the following guest post, Nessim Mezrahi, takes a look at event analysis, price impact, and damages in securities class action lawsuits. Mezrahi is cofounder and CEO of SAR, a securities class action data analytics and software company.  A version of this article previously was published on Law 360. I would like to thank Nessim for allowing me to publish his article 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 Nessim’s article.
Continue Reading Assessing Securities Class Action Risk with Event Analysis

Securities class action lawsuits have been an important part of the litigation scene in Australia for many years. But even though the current class action procedural regime has been in place since 1992, no Australian securities class action lawsuit ever went all the way to judgment – that is, no case ever went to judgment until last week. On October 24, 2019, the Federal Court of Australia issued a post-trial Order in the TPT Patrol Pty Ltd as trustee for Amies Superannuation Fund v Myer Holdings Limited. The court’s ruling, a copy of which can be found here, contains a number of interesting points and could have important implications. A detailed October 25, 2019 memo from the Clyde & Co law firm about the judgment can be found here.  
Continue Reading Australian Securities Class Action Suit Reaches Judgment for the First Time

As I have previously noted, even though the Foreign Corrupt Practices Act (FCPA) does not contain a private right of action, plaintiffs’ attorneys have fashioned an FCPA-based claim of sorts in the form of a follow-on shareholder claim alleging either mismanagement or misrepresentation with respect to the alleged bribery or corrupt activity. A  July 10, 2019 memo by attorneys from the DLA Piper law firm (here) takes a look at securities class action lawsuits filed based on FCPA allegations. As the authors note, the underlying FCPA allegations “do not necessarily make for a successful securities class action,” as most FCPA-related securities fraud claims “are dismissed.” As discussed below, a July 12, 2019 dismissal ruling in the FCPA-related Cemex securities class action illustrates both the kind of securities claims that can arise in the wake of FCPA-related allegations and also the hurdles that these kinds of claims face.
Continue Reading A Closer Look at FCPA-Related Securities Suits

One of the most interesting and significant developments in the corporate and securities litigation arena has been the rise of collective investor litigation outside the United States, as I have discussed in prior posts. This rising tide of litigation has not only included increased numbers of legal actions in a number of different jurisdictions but also has included several substantial settlements, including among others the massive settlements in the Fortis case and in the RBS case. In an updated report July 2019 report entitled “Global Securities Litigation Trends: July 2019 Update” (here), the Dechert law firm takes a detailed look at the “sea change” that has taken place in collective investor litigation in recent years, as a result of which, according to the report, we have entered “a new era of global securities litigation.”
Continue Reading More About the Global Rise in Collective Investor Actions

Paul Ferrillo

In the following guest post, Paul Ferrillo takes a look at the current state of the D&O insurance market and provides his views on the importance of a healthy D&O market for corporate America. Paul is a shareholder in the Greenberg Traurig law firm’s Cybersecurity, Privacy, and Crisis Management Practice. I would like to thank Paul for his willingness to allow me to publish his article 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 Paul’s article.
Continue Reading Why Corporate America Needs a Strong D&O Insurance Market

One of the most-watched corporate and securities litigation trends in recent years has been the incidence of D&O claims after companies experience data breaches. Although there have been a number of high profile claims along the way, the volume of data breach-related D&O claims has never quite lived up to the hype. Just the same, these kinds of claims have continued to be filed. The most recent case is a securities class action lawsuit that has now been filed against educational services company Chegg, Inc., after its recent announcement of a data breach involving customer data. The Chegg lawsuit, filed on September 27, 2018 in the Northern District of California, can be found here.
Continue Reading Educational Services Company Hit With Data Breach-Related Securities Suit

On July 13, 2018, the Amsterdam Court of Appeals finally approved the €1.3 billion ($1.5 billion) settlement of a series of shareholder claims against Fortis in the wake of the global financial crisis. The settlement, which had first been announced in March 2016 by Ageas, Fortis’s successor in interest, faced a number of judicial objections and concerns, resulting in changes to the settlement as originally proposed. According to a July 27, 2018 Law 360 article by Jonathan Richman of the Proskauer law firm and Ianika Tzankova of Tilburg University (here), the court’s recent approval “again shows” that the Dutch settlement procedure “remains a viable settlement vehicle for companies wishing to resolve transnational problems on a classwide, opt-out basis.” On the other hand, claimants’ attorneys have questioned whether the court’s rulings on class distribution and attorneys’ fees could discourage institutional investors from seeking to use the Dutch settlement procedures.
Continue Reading Dutch Court Declares Largest-Ever European Investor Claims Settlement Binding

The world of directors’ and officers’ liability is always dynamic, but 2017 was a particularly eventful year in the D&O liability arena. The year’s many developments have significant implications for what may lie ahead in 2018 – and possibly for years to come. I have set out below the Top Ten D&O stories of 2017, with an eye to these future possibilities.
Continue Reading Top Ten D&O Stories of 2017