Cleary Discusses 2017 Developments in Securities and M&A Litigation

The trend of increased securities class action filings in federal courts continued from 2016 to 2017.[1] Federal court filings of class actions related to M&A transactions again contributed to the increase.[2] Foreign issuers remained frequent targets of federal securities class actions.[3]

In 2017, the federal courts issued a number of important securities law decisions. Addressing the application of statutory time-bars applicable to securities law violations, the Supreme Court ruled in CalPERS that the Securities Act’s repose period is not subject to class action tolling and held in Kokesh that disgorgement in SEC proceedings is subject to the … Read more

New Year’s Resolutions for Director Compensation from Investors Bancorp

In recent years, shareholder plaintiffs have brought a series of claims before the Delaware Court of Chancery alleging that directors of Delaware companies have abused their discretion in granting themselves excessive equity compensation for their board service.  These cases raised the threshold question of whether the plaintiffs’ challenges should be reviewed under the “entire fairness” standard, which requires the company to bear the burden of proving that the director awards were fair, or the more deferential “business judgment” standard, which grants considerable discretion to directors’ decisions, often resulting in dismissal of claims that fail to plead particularized facts indicating fiduciary … Read more