PwC Annual Study Reports Record Number of Securities Suits

By | The D&O Diary | April 20, 2017
Largely driven by a “dramatic” increase in the number of federal court merger objection lawsuits, securities class action litigation filings rose to the highest level ever in 2016, according to PwC’s most recent annual securities litigation report. The report also noted that for the first time securities litigation rose though the stock market performance during the year did not, contrary to prior patterns. View Full Post
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The Steep Rise of Collective Actions in Europe

By | The D&O Diary | April 19, 2017
In prior posts (for example, here), I have described the rise of collective investor actions outside of the U.S. as one of the most important current developments in the world of directors and officers liability. The rise of these collective investor suits is not happening in a vacuum; the growth in the number and size of these kinds of lawsuits is part of a larger upsurge in collective actions generally. View Full Post
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Late Notice and Claims Made Date Issues

By | The D&O Diary | April 17, 2017
A recurring circumstance fraught with peril for policyholders is one in which the policyholder receives a demand letter in one policy period and then receives a related lawsuit in a subsequent policy period. The fact that these events straddle two policy periods creates potential for possible coverage preclusive issues having to do with Notice of Claim and Claims Made Date issues. View Full Post
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Thinking About the Wells Fargo Executive Compensation Clawbacks

By | The D&O Diary | April 11, 2017
wells fargoWells Fargo’s bogus customer account scandal is back in the news again, most recently because of the bank’s release on Monday of the report of its independent directors’ investigation of the bank’s improper sales practices. The April 10, 2017 report, which the bank posted on its website, makes for some interesting reading. View Full Post
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Are We Witnessing the Sunset of the U.S. Public Company?

By | The D&O Diary | April 10, 2017
There is a long and venerable tradition of predicting the demise of the American public corporation. For example, back in 1989, Harvard Business School Professor Michael Jensen famously questioned whether we were seeing the “eclipse of the public corporation.” In a February 2017 paper entitled “Is the American Public Corporation in Trouble?” View Full Post
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A Continued Focus On Corporate Governance in Europe and the U.K.

By | The D&O Diary | April 9, 2017
Just as the new Presidential administration leads a charge to roll back corporate regulation, “the rest of the world seems to be headed in the opposite direction,” according to a recent post in the PubCo@Cooley blog. Last month, the European Parliament approved a new Shareholder Rights Directive that is intended to “sharpen big EU firms’ focus on their long-run performance, by fostering their shareholders’ commitment to it, according to the legislature’s press release announcing the Directive’s adoption. View Full Post
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Cornerstone Research: 2016 Accounting-Related Securities Suit Filings and Settlements Again Increased

By | The D&O Diary | April 5, 2017
cornerstoneAccording to Cornerstone Research’s latest annual survey of accounting-related securities suits, the number of accounting-related securities suit filings rose to the highest level in years in 2016, largely as a result of the number of federal court merger objection lawsuit filings involving accounting-related allegations during the year. View Full Post
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Securities Litigation: What if the Real Exposure is Less Than Supposed Damages?

By | The D&O Diary | April 4, 2017
gavel1Most securities class action lawsuits that are not dismissed outright ultimately settle. One of the starting points for securities suit settlement negotiations is what is referred to as “plaintiffs’ style” damages estimate. The plaintiffs’ damages estimate is usually adjusted to reflect the composition of the class, the duration of the class period, trading patterns in the defendant company’s stock, and so on. View Full Post
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