Securities Litigation

A recent Fourth Circuit decision held that shareholders must meet a high bar in demonstrating scienter to avoid early dismissal of the case. The decision also shows the fact-intensive approach courts use to distinguish fraudulent statements from those that, even if mistaken, were made innocently.

You should be thinking about disclosure long before you even hear from a whistleblower, specifically, in terms of setting up policies and procedures governing how to handle the information flow from the investigative side of the house to the disclosure side.

The U.S. Court of Appeals for the Second Circuit signaled last month that it may fully address, for the first time, the question of whether a decades-old change to federal law rendered a commonly used tool for extending U.S. Securities and Exchange Commission investigations unenforceable in federal court.

Buried in the massive National Defense Authorization Act for Fiscal Year 2021 is §6501, a provision authorizing the SEC to seek disgorgement of unjust enrichment within 10 years for certain securities law violations, and five years for others.

Wall Street has greeted Gary Gensler's nomination as Chair of the SEC with some trepidation, perhaps with good reason. Congress, by contrast, may have presented him with a powerful signing bonus.

Given the current turmoil in the markets, an increasing number of plaintiffs are bringing shareholder class action suits, citing corporate statements about COVID-19. As first-quarter earnings season draws to a close, now is a good time to reflect on the shareholder class actions that have been brought to date related to COVID-19, and others potentially yet to come.

In the midst the current COVID-19 pandemic, the SEC is paying attention. The Division of Enforcement has made clear that it will act, and act quickly, to stop fraudulent conduct that falls under its jurisdiction related to the pandemic.

The Delaware Court of Chancery recently addressed a nearly unprecedented issue: the discovery and privilege implications of a special litigation committee's (SLC) decision to hand over control of a company claim to a stockholder derivative plaintiff who initiated the claim and survived a motion to dismiss.