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

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?

In the latest coronavirus outbreak-related securities class action lawsuit to be filed, a plaintiff shareholder has filed a securities class action lawsuit against The GEO Group, a publicly traded private corrections facilities operator, alleging that the company misled investors about the effectiveness of its COVID-19 response. The complaint alleges that the company’s “inadequate” procedures subjected residents of the Company’s halfway houses to significant health risks. The company’s share price declined following news reports of a COVID-19 outbreak at one of the company’s facilities. A copy of the plaintiff’s complaint can be found here.
Continue Reading Private Prison Firm Hit with COVID-19 Outbreak-Related Securities Suit

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