In its June 2010 decision in the Morrison v. National Australia Bank, the U.S. Supreme Court enunciated a "transactions" test to determine the applicability of the U.S. securities laws. The Court said that the U.S. securities laws apply only to "transactions in securities listed on domestic exchanges and domestic transactoins in other securities." Subsequent courts
BP Deepwater Horizon Securities Suit, Though Narrowed, Survives Dismissal Motion
In the wake of the disastrous April 2010 Deepwater Horizon oil spill, BP was hit with a wave of litigation from plaintiffs asserting claims of personal injury, wrongful death and property damage. The claimants also included BP shareholders raising allegations that they had been misled regarding BP safety efforts and processes. In a 129-page February
Canadian Securities Class Action Lawsuit Filings Hit Record in 2011
Securities class action lawsuit filings in Canada hit record levels in 2011 according to a new report from NERA Economic Consulting. The January 31, 2012 report, entitled “Trends in Canadian Securities Class Actions: 2011 Update” (here) concludes that the persistent growth in Canadian securities class action lawsuit filings “is not a transient phenomenon.”
Changes in the Plaintiffs’ Class Action Bar and the Changing World of Shareholder Litigation
The changing mix of corporate and securities litigation is a recent phenomenon on which I have frequently commented on this blog. While identifying the fact of the change is relatively straightforward, explaining it is more challenging. According to a January 11, 2012 article in The Review of Securities & Commodities Regulation entitled “Shareholder Litigation
Cornerstone Research Releases 2011 Securities Class Action Litigation Report
Securities class action filings rise slightly in 2011 compared to the prior year but remained below historical averages according to the annual study of Cornerstone Research, prepared in conjunction with the Stanford Law School Securities Class Action Clearinghouse, which was released today. A copy of the report can be found here, and Cornerstone Research’s
Can Investors Be Required to Arbitrate Their Claims?
Investors have a number of rights under federal and state law which they can enforce through litigation, including for example the right to file individual or class actions for damages. But can investors be required to submit these kinds of claims to binding arbitration in lieu of litigation? That is the question posed by a
Dutch Court Holds Collective Securities Settlement to Be Binding
On January 17, 2012, in a development with important implications for the evolution of post-Morrison remedies for non-U.S. investors, a Dutch court has held for the first time that a collective securities settlement is legally binding. Of even greater significance, the decision arose in a circumstance where none of the liable parties and few of
Substantiating the Explosive Growth in M&A-Related Litigation
There seems to be a general consensus that the amount of M&A-related litigation is increasing. The question of how to quantify the increase has attracted quite a bit of attention lately. In a recent post, I previewed a forthcoming report from Cornerstone Research that will provide detailed statistic analysis of the M&A litigation phenomenon.
Use of Optimistic Language in Public Disclosure Statements and the Risk of Securities Class Action Litigation
The tone public companies use in their disclosure statements can affect the companies’ susceptibility to securities class action litigation, according to a recent academic study. The authors found that firms hit with securities litigation generally used more optimistic language in their disclosure statements than did firms that were not sued. Based on these findings, the
SEC Brings Securities Enforcement Action Against Private Company, Former Chairman/CEO
The SEC has commenced an enforcement action against a private company and its former Chairman and CEO in connection with the company’s repurchase of company shares from company employees and others prior to the company’s acquisition.
The action involves Stiefel Laboratories, which prior to its April 2009 acquisition by GlaxoSmithKline for $68,000 a share