Sky Blog
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 …
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 …
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 …
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 …
The lynchpin of many securities fraud cases is whether a plaintiff can establish with particularity that a defendant acted with scienter (i.e., fraudulent intent). Where the defendant is an individual person, this question may be relatively straightforward. Where the defendant …
On June 10, 2020, the Ninth Circuit affirmed the dismissal of a putative securities fraud class action in a potentially significant decision for securities defendants, particularly those in the pharmaceutical, biotech and medical device space. The Ninth Circuit in Nguyen …
Dirks v. SEC established the fraud claim for tipping as part of the insider trading prohibition in the federal securities laws. An essential element of the claim was proof that the insider personally benefited from disclosing confidential information to the …
On May 27, the Second Circuit issued a ruling that significantly heightens the already heavy burden plaintiffs face in pleading corporate scienter. The Second Circuit affirmed dismissal of a putative securities class action against Kimberly-Clark Corporation and Avanos Medical, Inc. …
Most securities fraud class actions under SEC Rule 10b-5 involve revelation of negative information about the defendant company that should have been disclosed earlier – bad news that (allegedly) has been covered up by company agents. The standard remedy in …
The coronavirus’ impact across the United States will make an epic, even Tolstoyan, saga, sweeping across all levels of American society and featuring brave heroes and tragic victims. But so far, this story has lacked one figure that every drama …
Companies can get big without going public. The number of U.S. listed companies is down by half, and the last few years have seen more capital raised on the private side than on the public side. Despite this well-documented shift …
To assist legal and compliance officers of financial institutions, this memorandum summarizes key recent developments in criminal prosecutions and regulatory enforcement actions involving financial institutions during November and December 2019.
Among the significant matters and trends:
On December 10, 2019, the Second Circuit, in Gamm v. Sanderson Farms, held that when a securities fraud complaint alleges that statements were rendered false or misleading through the non-disclosure of illegal activity, the facts of the underlying wrongdoing …
The most significant securities decision to be handed down in the first half of 2019 came from the Supreme Court in Lorenzo v. SEC, which clarified the scope of “scheme liability” under Rule 10b-5(a) and (c). Another significant ruling …
In Lorenzo v. SEC, the U.S. Supreme Court continued the struggle to define the difference between primary liability and aiding and abetting liability in Rule 10b-5 and other securities fraud claims. The difference matters because private plaintiffs do not have …
Promoting public confidence in securities markets is a policy goal that is frequently cited by commentators, Congress, the courts, regulators, and prosecutors for the adoption and vigorous enforcement of insider trading laws.
For example, in the seminal insider trading case …
In a forthcoming article, I contend that Professor James Spindler has it wrong in his recent critique[1] of scholarly opposition to securities fraud class actions (SFCAs). Spindler argues that the opposition is based on two mistaken ideas: (1) that …
On May 3, the Second Circuit vacated on evidentiary grounds Jesse Litvak’s conviction – after a second trial – on a single count of securities fraud related to trades of residential mortgage backed securities (“RMBS”) and remanded the case to …
Last year, when the Supreme Court revisited the topic of insider trading in Salman v. United States, scholars rehearsed a familiar debate: Should Congress enact a statute that explicitly defines insider trading? Or should it stick with the status …
The number of accounting-related class action lawsuits has increased in recent decades, imposing billions of dollars of direct and indirect costs on public companies and, eventually, their shareholders each year. Although accounting theory says that litigation risk generates accounting conservatism …