Securities Litigation

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As I have noted in prior posts (most recently here), a recurring type of pandemic-related securities suit involves companies whose fortunes prospered at the outset of the pandemic but whose performance sagged as the coronavirus outbreak evolved. The latest lawsuit of this type is the securities suit filed earlier this week against the retailer Target Corp., in which the plaintiffs allege that the surge in consumer demand at the outset of the pandemic led the company to overstock inventory, causing an inventory overhang that later undercut the company’s financial performance. A copy of the March 29, 2023, complaint against Target can be found here.Continue Reading Target Hit with Securities Suit Over Pandemic-Related Inventory Overhang

Even though the COVID-19 pandemic is now into its fourth year, plaintiffs’ lawyers continue to file pandemic-related securities class action lawsuits, increasingly in conjunction with allegations involving other macroeconomic factors, such as rising interest rates, economic inflation, supply chain disruption, and labor supply shortages. In the latest example of litigation of this type, last week plaintiffs’ lawyers filed a securities class action lawsuit against tool maker Stanley Black & Decker, alleging that the company misled investors that the pandemic-fueled surge in demand for the company’s product would continue even as conditions changed. A copy of the March 24, 2023, complaint against the company can be found here.Continue Reading Stanley Black & Decker Hit with COVID-Related Securities Suit

The collapse of Silicon Valley Bank is one of those singular events, charged with implications and fraught with dangerous possibilities, but that is also still so recent that it is difficult to discern what it ultimately will mean. Earlier this week, in an excellent webinar presented by the Rock Center for Corporate Governance at the…

As I noted in posts earlier this month (here and here), even though the COVID pandemic is about to enter its fourth year, COVID-related securities suits continue to be filed. The latest example is the securities class action lawsuit complaint filed late last week against pharmaceutical delivery device firm Catalent, a firm whose revenues soared at the in the early stages of the pandemic but whose fortunes lagged as the pandemic progressed. A copy of the February 24, 2023 complaint against the company can be found here.Continue Reading Pharmaceutical Delivery Device Firm Hit with COVID-Related Securities Suit

The D&O Diary was on assignment this week at the PLUS D&O Symposium. As reflected the accompanying picture of Times Square, the weather in New York was uncharacteristically sunny and warm for this time of year. The Symposium itself was also superlative; the event was surprisingly well-attended and the sessions were great. My congratulations to the event co-chairs, and to the PLUS staff and volunteer leadership for another successful event. Continue Reading PLUS D&O Symposium in New York

The directors’ and officers’ liability environment is always changing, but 2022 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2023 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2022, with a focus on future implications. Please note that on Thursday, January 12, 2023 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2022. Registration for the webinar can be found here. I hope you will please join us for the webinar.Continue Reading The Top Ten D&O Stories of 2022

Since the initial coronavirus outbreak in the U.S. in March 2020, plaintiffs’ lawyers have filed a host of securities class action lawsuits against companies raising a variety of COVID-19-related allegations. Many of these cases have faced significant hurdles at the initial pleading stage, and in a number of cases the dismissal motions have been granted. The one categorical exception to these dismissal motion generalizations seems to be cases involving vaccine development companies. Two rulings in the past week seem to corroborate both of these observations. First, in a December 9, 2022 ruling in the securities suit pending against the diagnostic testing company Talis Biomedical, the court granted the defendants’ motion to dismiss (albeit with leave to amend). However, in a December 12, 2022 ruling in the securities case against the vaccine development company Novavax, the court denied the defendants’ dismissal motion in significant part. The rulings in these two cases are discussed below.
Continue Reading Dismissal Motion Ruling Patterns Emerge in COVID-19-Related Securities Suits

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?