Class Actions

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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COVID-Related Results Lead to Securities Suit     | The D&O Diary

I think we all recognize that the disruptions from the COVID pandemic continue to reverberate through the economy. Many industries and many companies are still trying to get back to equilibrium. The pandemic continues to impact companies, their operations, and their financial results. A new lawsuit filed against the sporting goods retailer Dick’s Sporting Goods(DSG)  illustrates how the pandemic-related factors…

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Commercial Real Estate Woes Weigh on Bank, Lead to New Securities Suit | The D&O Diary

…As the Wall Street Journal put it in an article late last week, “Investors have wondered when the pain from the downturn in commercial property would hit banks.” As the Journal noted in the same article, the commercial property-related pain has now arrived for some banks. Several banks, including New York Community Bancorp (NYCB), suffered significant stock price drops after…

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NBA Sued Over Deal With Failed Crypto Exchange Voyager – Bloomberg

The National Basketball Association was hit with a lawsuit over its marketing links to failed crypto exchange Voyager Digital Holdings Inc., which investors claim led to $4.2 billion in losses. The NBA was “grossly negligent” in agreeing to a marketing deal between Voyager and Mark Cuban, the former owner of the NBA’s Dallas Mavericks, the investors alleged in a suit…

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Supreme Court Considers Whether Pure Omissions Can Support Section 10(b) Liability | The D&O Diary

On January 16, 2024, the U.S. Supreme Court held oral argument on a question that could have significant consequences for securities litigants: whether a failure to disclose information under Item 303 of Regulation S-K is, standing alone, an actionable omission under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  While it remains to be seen what the Court…

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Telling Investors that a Lawsuit is “Without Merit” Comes With Risks — Alto Litigation

When faced with a lawsuit, it’s common for a public company to argue in the court of public opinion that the claims asserted against it are “without merit.” However, as a recent U.S. District Court of the District of Massachusetts ruling in the case of City of Fort Lauderdale Police & Firefighters’ Retirement System v. Pegasystems Inc. demonstrates, such an…

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Robinhood Investors Fail to Save Suit Alleging IPO Deceptions

Robinhood Markets Inc. shed a proposed investor class action over allegedly misleading statements in its initial public offering documents. US District Judge Edward M. Chen granted Robinhood’s motion to dismiss the plaintiffs’ second amended complaint, without giving the plaintiffs a chance to change it. The investors didn’t adequately allege claims under Sections 11, 12, and 15 of the Securities Act…

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