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Civil Liability of Rating Agencies
In the wake of the financial crisis, credit rating agencies have been named in dozens of lawsuits by investors seeking to recover on the huge losses suffered when the subprime market collapsed. Despite widely reported shortcomings in recent years, the rating agencies have largely prevailed in these cases on motions to dismiss. In the few cases in which plaintiffs have been allowed to proceed to discovery, it is hardly certain that the rating agencies will face substantial liability for their contribution to the subprime collapse.
While courts have begun to address claims for alleged past misconduct, the new Dodd-Frank Wall Street Reform and Consumer Protection Act relaxes the pleading standard in future private securities cases against rating agencies and rescinds a Securities and Exchange Commission rule which previously exempted rating agencies from liability for false ratings in public registration statements. The new law increases the rating agencies' future exposure to civil liability. Below, we examine how rating agencies have fared in the courts to date and how they might fare under the new rules.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.