Discussion of Key Issues in Securities & Governance Litigation
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…
Does Item 303 of Regulation S-K matter in private securities litigation? In Stratte-McClure v. Morgan Stanley, 776 F.3d 94 (2nd Cir. 2015), the Second Circuit held that Item 303 imposes a duty to disclose for purposes of Section 10(b), meaning that the omission of information required by Item 303 can provide the basis for…
In my last D&O Discourse post, “The Future of Securities Class Action Litigation,” I discussed why changes to the securities litigation defense bar are inevitable: in a nutshell, the economic structures of most of the typical securities defense firms result in defense costs that significantly exceed what is rational to spend in a…
Securities litigation has a culture defined by multiple elements: the types of cases filed, the plaintiffs’ lawyers who file them, the defense counsel who defend them, the characteristics of the insurance that covers them, the way insurance representatives approach coverage, the government’s investigative policies – and, of course, the attitude of public companies and their…
In the world of securities and corporate governance litigation, we are always in the middle of a reform discussion of some variety. For the past several years, there has been great focus on amendment of corporate bylaws to corral and curtail shareholder corporate-governance claims, principally shareholder challenges to mergers.* Meritless merger litigation is indeed a…
Why do the costs of defending securities class actions continue to increase? Because of my writing on the subject (e.g. here and here), I’m asked about the issue a lot. My answer has evolved from blaming biglaw economics – a combination of rates and staffing practices – to something more fundamental. Biglaw economics is…
In 1995, public companies and their directors and officers received one of the greatest statutory gifts in the history of American corporate law: the Private Securities Litigation Reform Act. The Reform Act established heightened standards for pleading falsity and scienter, among other protections, to allow for dismissal before discovery in a fair percentage of cases. …
Even the most experienced securities defense attorneys regularly summarize Rule 10b-5(b) as creating a cause of action for “false or misleading statements and omissions of material fact.” Courts –including the Supreme Court – routinely use the same shorthand. When I was a new securities litigation defense attorney, one of the first things that I learned…
In my last post of 2013, I thought I’d share some thoughts about how public companies can better protect themselves against securities claims – practical steps companies can take to help them avoid suits, mitigate the risk if they are sued, and to defend themselves more effectively and efficiently. I’ll share a few thoughts…
It is time to re-think the one-size-fits-all model of securities litigation defense. Currently, securities cases against all companies – gigantic, tiny, and everything in between – are primarily defended by law firms with marquee names featuring sky-high billing rates and big budgets. That model is ill-fitting for many companies.
There are many reasons why companies…