Class Actions

Fewer Lawsuits Ease Public Pathway as Reddit Wakes Up IPO Market

“The decrease in the number of parallel or state court filings jumps out,” said Robert Fumerton of Skadden, Arps, Slate, Meagher & Flom LLP in New York. “I think it’s obviously attributable, in large part, to companies putting federal forum selection clauses in their registration documents and the willingness of courts to enforce them,” he said. Those forum selection clauses…

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Tesla Investors Write to Judge Who Voided Elon Musk Record Pay – Bloomberg

The judge who threw out Tesla Inc. co-founder Elon Musk’s record-setting $55.8 billion pay package said she’s received “many communications” from investors about the request from the winning lawyers for almost $6 billion in company stock. Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick said she’s not reading the letters. The state judiciary’s ethics code “prohibits me from considering”…

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Bump-Up Exclusion Precludes Coverage for Merger-Related Claims Settlement | The D&O Diary

On March 6, 2024, in a decision that has attracted a lot of attention in the business press, the Eastern District of Virginia, applying Virginia law, held that the bump-up exclusion in Towers Watson’s D&O insurance policy precludes coverage for the $90 million paid in settlement of claims relating to the firm’s January 2016 merger with Willis Group Holdings. As…

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Pension Funds Lead in Corporate Cases, Enhancing Big Fee Demands

“Pension funds are more likely to be clients because they are easily identifiable, sophisticated investors that the plaintiff’s bar can quickly contact and explain the theory of the case,” said Paul Weitzel, a University of Nebraska law professor. *** Institutional investors as plaintiffs “suggested that the cases were driven, rather than by plaintiffs’ lawyers seeking a fee, instead by institutions…

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Lyft’s Earnings Gaffe Draws Investor Suit Over 46-Minute ‘Fraud’

On Tuesday, an investor filed a proposed class-action securities suit over the typo in a Feb. 13 company press release that caused the stock to briefly surge 67% in after-hours trading. The complaint filed in San Francisco federal court alleges the ride-share company defrauded investors when it mistakenly said it expected adjusted earnings margins, calculated as a percentage of bookings,…

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Two-Fer: SPAC-Merged Company Hit With COVID-Related Securities Suit  | The D&O Diary

As readers know, in recent years I have been tracking two securities class action litigation filing trends:  the filing of SPAC-related lawsuits, and the filing of COVID-related lawsuits. In a noteworthy development, a securities suit filed last week embodies both of these filing trends. That is, a company that was formed through a SPAC merger has been hit with a…

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Compare and Contrast | The 10b-5 Daily

NERA Economic Consulting and Cornerstone Research have released their respective 2023 annual reports on federal securities class action filings.  As usual, the different methodologies employed by the two organizations have led to slightly different numbers, although they both identify the same general trends. Source: Compare and Contrast | The 10b-5 Daily

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First AI-Related Securities Suit Filed | The D&O Diary

In any discussion these days of emerging directors’ and officers’ risks, the conversation inevitably turns to the topic of Artificial Intelligence (AI). There is a general perception that while AI presents significant opportunities, it also involves significant liability risks. The contours of the risk that AI represents have yet to develop, largely because the claims have yet to emerge. That…

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