Paul Weiss Discusses Second Circuit Decision on Falsity in Securities Fraud Cases

By Andrew J. Ehrlich, Daniel J. Kramer, Audra J. Soloway, Kristina A. Bunting and Brian M. Erickson January 17, 2024 by renholding

On December 26, 2023, the Second Circuit in In re Philip Morris Int’l Inc. Securities Litigation issued a decision on two matters of first impression relating to falsity in the securities fraud context. [1] First, the court held that statements …

Why Is the Number of Securities Class Actions Alleging Insider Trading Dropping?

By James J. Park January 11, 2024 by renholding

In a typical year, the Securities and Exchange Commission (SEC) brings a few dozen enforcement cases against individuals for insider trader. These cases are typically settled before a decision by a court. Many of the issues raised by insider selling …

Why Short Attacks May Compel a Company to Sue

By Joshua Mitts September 25, 2023 by renholding

In a recent post on the Harvard Law School Forum on Corporate Governance, three partners at Skadden, Arps, Slate, Meagher & Flom LLP give practical advice to companies in preparing for and responding to a short attack. With respect …

Socially Acceptable Securities Fraud

By Christine Hurt August 18, 2023 by renholding

In the 90 years since the passage of the Securities Exchange Act, the number of ways market participants can publicly disseminate statements to investors has skyrocketed. Yet no regulator, legislator, or judge has answered a fundamental question: Should the law …

ISS Discusses Wells Fargo’s Historic $1 Billion Settlement With Investors

By Jarett Sena June 1, 2023 by renholding

Investors’ $1 billion tentative settlement – a Top 20 settlement of all time if approved – comes in the wake of years of scandal and resolves allegations that the bank concealed its inability to clean up its act. Prior scandals …

How Litigation Risk Affects Companies’ Liquidity

By Tommaso Oliviero, Min Park and Hong Zou March 7, 2023 by renholding

Securities litigation has become a major source of risk to businesses. From 2007 to 2016 the number of securities class actions (SCAs) filed each year increased by roughly 70 percent in the U.S. and by 115 percent worldwide (PricewaterhouseCoopers, 2017).…

ISS Discusses Five Non-U.S. Class Actions Investors Should Pay Attention To

By Jeff Lubitz September 1, 2022 by renholding

As institutional investors know, a vast majority of shareholder related class actions take place in the United States. This is accurate in terms of both newly filed cases and settlements.

However, non-North American shareholder litigation is significantly important to investors …

ISS Discusses Securities Class-Action Settlements in First Half of 2022

By Jeff Lubitz July 18, 2022 by renholding

The value of U.S. shareholder class action settlements in the first half of 2022 totaled $2.32 billion, the exact amount as the same period in 2021. However, the quantity of settlements in the first six months of the year increased

…

Issuer Liability: Ownership Structure and the Circularity Debate

By Martin Gelter July 6, 2022 by renholding

In many countries, investors can hold publicly traded companies liable for public misstatements. Issuer liability is intuitively appealing because statements are generally made on behalf of the company by its representatives. Moreover, large companies typically have deep pockets, which ensures …

Does the Threat of Securities Class Actions Add Value for Shareholders? Evidence from China

By Warren Bailey, Hui Ma, Rongli Yuan and Hong Zou May 18, 2022 by renholding

Securities class actions (SCA) are an important governance mechanism in the U.S. securities market, but there is a significant debate about their costs and benefits to investors. SCA are intended to serve two key functions in investor protection: disciplining and …

Going Private Outside Delaware: Holes in the Director Raincoat and Other Concerns

By Matthew G. Doré April 12, 2022 by renholding

Meade v. Christie et al., an interlocutory appeal in a shareholder class action challenging a going private merger, is currently pending before the Iowa Supreme Court.[1] The appeal will test the strength of a director-liability shield law patterned on …

ISS Discusses Shareholder Class Actions Related to Covid-19

By Jeff Lubitz February 21, 2022 by renholding

As the world completes a full two years of navigating the perils of the Coronavirus pandemic, U.S. shareholders continue to file class action complaints alleging companies with various acts of fraud related to COVID-19.

As previously reported by ISS Securities

…

ISS Discusses Shareholder Class Action Settlements in 2021

By Jeff Lubitz December 22, 2021 by renholding

As the world will soon reflect on two full years of living through the COVID pandemic, the pace of shareholder-related class action settlements continue to bring significant recoveries back to harmed investors.

In fact, according to ISS Securities Class Action

…

Gibson Dunn Offers 2021 Mid-Year Securities Litigation Update

By Monica K. Loseman, Craig Varnen, Jefferson E. Bell, Rachel N. Jackson and Alisha Siqueira September 13, 2021 by renholding

The torrid pace of new securities class action filings over the last several years slowed a bit in the first half of 2021, a period in which there have been many notable developments in securities law. This mid-year update briefs …

ISS Discusses Increase in Class Action Settlements for First Half of 2021

By Jeff Lubitz July 23, 2021 by renholding

As the U.S. and countries around the globe attempt to control the Coronavirus pandemic, investors continue to experience meaningful recoveries from securities-related class action settlements.

In the first half of 2021 (January 1 – June 30), U.S. class action settlements …

Is Everything Securities Fraud?

By Emily Strauss May 19, 2021 by renholding

Securities litigation is almost inevitable for any public company. Often, investors sue because the firm’s managers engaged in fraud that directly harmed the shareholders – say, by doctoring the firm’s financials or lying about known business prospects. However, shareholders also …

Short Sellers, Short Squeezes, and Securities Fraud

By Christine Hurt and Paul Stancil March 22, 2021 by renholding

Securities fraud and short sellers are strange bedfellows. The stereotypical story involving both happens when short sellers bring to light false statements of issuers, prompting corrective disclosures and giving shareholders a cause of action. At times, issuers accuse these short …

Skadden Discusses Trends in Securities Class Action Filings

By Jay B. Kasner, Scott D. Musoff, Susan L. Saltzstein and William J. O'Brien III March 9, 2021 by snehapandya

Despite unprecedented disruptions to the court system from the COVID-19 pandemic, plaintiffs continued to bring securities class actions at elevated levels in 2020 — a sign that filings will remain high in the year ahead. Based on data from Cornerstone …

Private Company Lies

By Elizabeth Pollman February 23, 2021 by renholding

Rule 10b-5, the federal antifraud catch-all, applies to both public and private company securities. Yet the voluminous case law, and the related scholarly literature, has focused primarily on public corporations and markets.

This state of the world sufficed for …

Gibson Dunn Offers 2020 Year-End Securities Litigation Update

By Robert F. Serio, Brian M. Lutz, Monica K. Loseman, Jefferson E. Bell and Mark H. Mixon, Jr. February 23, 2021 by renholding

Notwithstanding the ongoing spread of COVID-19 and unprecedented changes in daily life and the economy, the second half of 2020 marched on to the steady drumbeat of securities-related lawsuits we have observed in recent years, including securities class and stockholder …

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