Regular readers know that in recent months I have been following two securities class action litigation filing trends: first, the incidence of COVID-19-related securities suit filings,  and, second, the influx of claims relating to macroeconomic factors, including, among other things, global supply chain disruption (which was itself caused at least in part by the coronavirus). In a lawsuit that includes allegations that involve both of these trends, a plaintiff shareholder has filed a securities class action lawsuit against the women’s online apparel company, Torrid Holdings, Inc. As discussed below, the complaint alleges, among other things, that in connection with the company’s July 2021 IPO, the company soft-pedaled the impact on the company from COVID-19 and from supply chain disruptions. A copy of the plaintiff’s November 16, 2022 complaint can be found here.
Continue Reading Women’s Apparel Company Hit with COVID and Supply Chain-Related Securities Suit

As I have noted previously (most recently here), there have been a number of COVID-19-related securities class action lawsuits filed since the initial coronavirus outbreak in the U.S. in March 2020. But while these lawsuits have continued to be filed since the outset of the pandemic, as time has gone by, it has become increasingly challenging to say with certainty whether or not a new lawsuit is COVID-19-related. A case in point is the lawsuit filed this week against the online clothing rental and sales platform, Rent the Runway, Inc. (RTR). The lawsuit unquestionably raises allegations related to the challenges that the company faced (and faces) as a result of the pandemic; however, the plaintiff’s complaint raises a number of other allegations as well. For reasons discussed below, and even though the complaint raises a number of different kinds of allegations, I think that on balance the lawsuit counts as COVID-19-related. A copy of the complaint filed against RTR can be found here.
Continue Reading Online Clothing Company Hit With COVID-19-Related Securities Suit

As I discussed at the time (here), in March 2022, the SEC published proposed climate-related disclosure guidelines. The agency’s proposal is now in the public comment period, and it remains to be seen in what form the guidelines will be put into effect. However, it seems probable that that the guidelines will be implemented in some form, despite concerns expressed in public comments so far. If the rules are put into effect in some form close to the initial proposal, there will be a risk that claimants may seek to rely on the guidelines in connection with future corporate and securities lawsuits. A detailed and interesting September 12, 2022 memo from the Cleary Gottlieb law firm (here) discussed the possibility that the climate change disclosure guidelines could give rise to a host of potential future litigation risks. (Hat tip to the TheCorporateCounsel.net blog for the link to the law firm memo.)
Continue Reading Will Corporate and Securities Litigation Follow SEC Adoption of Climate Disclosure Guidelines?

Just as the COVID-19 virus continues to represent a threat to human populations, companies continue to explore possible alternatives for the treatment of the disease and its symptoms. As in any initiative built around developing and testing unproven products or processes, a number of these efforts to develop coronavirus treatments and therapies are unsuccessful. In some instances, litigation ensues after these unsuccessful efforts. A lawsuit filed last week against a biopharmaceutical company exemplifies the way this sequence of events can lead to litigation, in turn sustaining the ongoing phenomenon of coronavirus-related securities litigation filings that began at the time of the initial COVID-19 outbreak in the U.S. in March 2020.
Continue Reading Biopharma Company Latest to Get Hit With COVID-19-Related Securities Suit

The changes and disruptions caused by the COVID-19 pandemic continue to roil companies’ business operations and financial results. The pandemic’s effects, and the ensuing shifts in business operations and strategic decision-making, are also in some instances continuing to result in securities class action litigation. In the latest example of these phenomena, a plaintiff shareholder has filed a securities suit against the mental health care service provider LifeStance Health Group, Inc. and certain of its executives. The complaint alleges that the Registration Statement prepared in connection with the company’s June 2021 IPO did not adequately disclose the impact on the company’s operations and finances from the lifting of the government stay-at-home orders and did not disclose the pandemic’s impact on the company’s physician workforce. A copy of the August 8, 2022 complaint against the company can be found here.
Continue Reading Mental Health Services Company Hit with Post-IPO COVID-Related Securities Suit

In the now more than two-and-a-quarter years since the initial COVID-19 outbreak in the U.S., a significant number of COVID-related securities class action lawsuits have been filed. What is surprising is not that the suits have been filed; rather, it is that even at this late date, the COVID-related suits continue to be filed. As time has gone by, however, it has become increasingly challenging to say with clarity whether a particular lawsuit is or is not “COVID-related.” The securities class action lawsuit filed late last week against online information platform, Yext, illustrates the increasing difficulty of making the COVID-related categorization, as discussed below.
Continue Reading The Growing Challenge of Identifying COVID-Related Securities Suits

Regular readers of this blog know that one of the important emerging D&O liability exposures involves issues arising from privacy concerns. There have, in fact, been a number of important privacy-related D&O claims filed, including lawsuits relating to the EU’s General Data Protection Regulation (GDPR). Among the highest profile of these GDPR-related lawsuits is the securities class action lawsuit filed against U.K. based media rating firm Nielsen Holdings. The Nielsen securities suit survived a dismissal motion. Now, in the latest development, the Nielsen suit recently settled for $73 million. The settlement is subject to court approval. A copy of the parties’ stipulation of settlement can be found here.
Continue Reading Nielsen Holdings Settles GDPR-Related Securities Suit

Since the earliest outbreak of the coronavirus in the U.S. in March 2020, I have been tracking the coronavirus-related D&O litigation. There have been D&O suits filed throughout the intervening period, though the nature of the suits and the kinds of allegations have evolved over time. One recent aspect of the changes has been that, as pandemic-related circumstances have blended into general business conditions, it has become increasingly difficult to say with certainty whether certain new suits are or are not pandemic-related. A case in point is a lawsuit filed earlier this week against software company Everbridge, which experienced a recent stock price decline due to a number of circumstances including some that the company itself declared to be pandemic-related. I discuss below my reasons for including this new lawsuit in my tally of coronavirus-related lawsuits. A copy of the complaint filed on April 4, 2022 Central District of California can be found here.
Continue Reading New Securities Suit Against Software Company is in Significant Part COVID-Related

As readers of this blog well know, since the initial U.S. coronavirus outbreak in March 2020, plaintiffs’ lawyers have filed dozens of COVID-19-related securities class action lawsuits. Even though the coronavirus-related litigation phenomenon, like the coronavirus outbreak itself, is about to enter its third year, relatively few of the coronavirus-related securities suits have yet reached the motion to dismiss stage. However, last week the federal judge presiding over the coronavirus-related lawsuit filed against Zoom Video Telecommunications entered an order granting in part and denying in part the defendants’ motion to dismiss. The Court’s February 16, 2022 order, a copy of which can be found here, also presents an interesting perspective on the ways in which privacy and security issues can lead to potential securities law liability exposures.
Continue Reading Zoom Coronavirus-Related Securities Suit Dismissal Motion Denied in Part