The explosive growth in Special Purpose Acquisition Companies (“SPACs”) is starting to generate significant amounts of litigation. Scores of civil lawsuits have been filed against SPAC sponsors and/or their directors and officers since the start of 2020, with more than 50 securities or stockholder cases filed in the federal courts alone. We expect this represents the tip of the iceberg. With intense public attention on SPACs, including from incoming SEC Chairman Gary Gensler, acting Director of the SEC’s Division of Corporate Finance John Coates, and the SEC’s Office of Investor Education and Advocacy, as well as … Read more
On September 27, 2016, in related appeals arising from a long-pending securities fraud class action against Vivendi, the Second Circuit ruled on several important issues, including the proof necessary to both sustain and defeat the fraud-on-the-market presumption of reliance.
Most significantly, in In re Vivendi, S.A. Securities Litigation, Nos. 15-180-cv(L), 15-208-cv(XAP) (2d Cir.), the Second Circuit rejected defendants’ per se challenge to the so-called “price maintenance” theory, which posits that confirmatory misstatements can fraudulently maintain an artificially high stock price by preventing the stock price from declining. The Second Circuit held that misstatements that do not cause stock price … Read more