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The sun is shining, children are out of school, families are headed off on summer vacations, and the SEC is … bringing enforcement actions against companies for 2020 fraud related to COVID-19 products. One such action was recently filed against SCWorx Corp. and its former CEO and chairman, Marc Schessel.1 In bringing charges almost two […]
The SEC’s complaint alleges that, with SCWorx struggling financially, Schessel and SCWorx issued a press release on April 13, 2020, falsely stating that SCWorx had a “committed purchase order” from a purported buyer to purchase two million COVID-19 rapid test kits. The press release further stated that the purchase order included a “provision for additional […]
Readers of this blog know that two important current litigation trends involve the filing of claims relating to cybersecurity incidents and the filing of COVID-19-related claims. A new securities class action lawsuit filed this week touched on both of these securities suit filing trends. Secure technology company Telos Corporation was hit with a securities suit […]
But after 12 months, only about 25 proposed securities class actions tied to the pandemic remain active in federal courts, according to an analysis by Law360. Six of those have come in 2021, suggesting that the flow of such cases may continue, but not at the level some may have anticipated early on. “My sense […]
It has been nearly a year since the coronavirus outbreak in the U.S. first led to widespread closures and disruptions. Throughout that time, plaintiffs’ lawyers have continued to file securities class actions and other claims against companies affected by the pandemic. On February 12, 2021, in the latest of these COVID-19-related securities lawsuits, a plaintiff […]
The recent settlement that Cheesecake Factory paid to the Securities and Exchange Commission was relatively small, but it conveyed a big message: Public companies must accurately disclose the current and anticipated material impacts of COVID-19 on their operations and financial condition. Source: The SEC fires a warning shot about COVID-19 disclosures | Accounting Today
On Dec. 4, the U.S. Securities and Exchange Commission brought its first enforcement action charging a public company, The Cheesecake Factory Inc., with misleading investors about the financial effects of the pandemic.[1] The case is significant because it shows that the agency is moving past its initial bout of enforcement activity targeting blatantly fraudulent activity […]
During a discussion of red flags that should draw directors’ attention, Ms. Stone noted that the SEC may take a magnifying glass to disclosures involving significant judgements and estimates, particularly in the current economic conditions. She quoted her former colleague Steven Peikin, previous Co-Director of the Division of Enforcement, who stated in a speech at […]
Remember back in mid-March, when the stock market was gyrating and businesses were just beginning to reckon with COVID-19 lockdowns? Corporate defense firms warned that opportunistic shareholders’ lawyers were poised to pounce. Plaintiffs’ lawyers said at the time that they were in no rush to bring class actions against companies that failed to anticipate the […]
As we enter the fifth month of the coronavirus outbreak in the U.S., the COVID-19-related D&O claims continue to accumulate. There have now been a total of 16 COVID-19-related securities class action lawsuits filed. The lawsuits filed so far fall into three basic categories: (1) cases involving companies that experienced COVID-19 in their facilities (such […]