The securities class action war is about far more than the height of the pleading hurdles plaintiffs must clear, the scorecard of motions to dismiss won and lost, or median settlement amounts. It is a fight for strategic positioning—about achieving a system of securities litigation that sets up one side or the other to win
Litigation Strategy
Myths & Misconceptions of Biotech Securities Claims: An Analysis of Motion to Dismiss Results from 2005-2016
By Doug Greene, Genevieve York-Erwin, Michael Tomasulo
I. Introduction
Small, development stage biotech companies are widely considered to be attractive targets for securities actions given the inherent risks of the industry and the volatility of their stock prices. As a result, many of these companies have relatively limited D&O insurance options. But are…
Be Careful What You Wish For, Part II: Would Companies Be Better Off Without the Fraud-on-the-Market Doctrine?
The villain in the fight against securities class actions is the fraud-on-the-market presumption of reliance established by the U.S. Supreme Court in 1988 in Basic Inc. v. Levinson, 485 U.S. 224 (1988). Without Basic, the thinking goes, a plaintiff could not maintain a securities class action, and without securities class actions, executives could…
Be Careful What You Wish For, Part I: Does the Reform Act Need Reforming?
The history of securities and corporate governance litigation is full of wishes about the law that we later regret (or will), or are happy were not granted. Many of these are not obvious—and some will surprise people. From certain case-by-case tactical decisions such as establishment of special litigation committees, to the (failed) attempt to abolish…
5 Wishes for Securities Litigation Defense: Early Damages Analysis and Discovery
The fifth of my “5 Wishes for Securities Litigation Defense” (April 30, 2016 post) is to move securities class action damages expert reports and discovery ahead of fact discovery. This simple change would allow the defendants and their D&O insurers to understand the real economics of cases that survive a motion to dismiss,…
5 Wishes for Securities Litigation Defense: Effective Use of the Supreme Court’s Omnicare Decision
In this installment of the D&O Discourse series “5 Wishes for Securities Litigation Defense,” we discuss the third of five changes that would significantly improve securities litigation defense: to make the Supreme Court’s Omnicare decision a primary tool in the defense of securities class actions.
As a reminder, in Omnicare, Inc. v. Laborers…
5 Wishes for Securities Litigation Defense: Greater Insurer Involvement in Defense-Counsel Selection and Strategy
One of my “5 Wishes for Securities Litigation Defense” (April 30, 2016 post) is greater D&O insurer involvement in securities class action defense.
This simple step would have extensive benefits for public companies and their directors and officers. D&O insurers are repeat players in securities litigation, and they have the greatest economic interest…
5 Wishes for Securities Litigation Defense: A Defense-Counsel Interview Process in All Cases
One of my “5 Wishes for Securities Litigation Defense” (April 30, 2016 post) is to require an interview process for the selection of defense counsel in all cases.
When a public company purchases a significant good or service, it typically seeks competitive proposals. From coffee machines to architects, companies invite multiple vendors to…
Why I’m So Passionate about Omnicare
On March 24, 2015, the U.S. Supreme Court issued its opinion in Omnicare, Inc. v. Laborers Dist. Council Const. Industry Pension Fund, 135 S. Ct. 1318 (2015). My partner Claire Davis and I are publishing a forthcoming one-year anniversary article on Omnicare. In addition to discussing the lower courts’ application of the decision,…
Reform Act Report Card: The Private Securities Litigation Reform Act, 20 Years Later
In 2015, the Private Securities Litigation Reform Act* turned twenty years old.
Over my career as a securities litigator, I’ve seen both sides of the securities-litigation divide that the Reform Act created. In the first part of my career, I witnessed the figurative skid marks in front of courthouses, as lawyers raced to the courthouse…