As readers of this blog well know, life sciences companies are frequent targets of securities class action lawsuits. Interestingly, at least according to the latest annual report from the Sidley law firm, in recent years the number of lawsuits filed against life sciences companies has declined, although the lawsuit frequency against life sciences companies
The D&O Diary
Blog Authors
Latest from The D&O Diary
U.S. Supreme Court: Item 303 Omissions Alone Not Actionable
Justice Sonia Sotomayor
On April 12, 2023, in a short, unanimous opinion written by Justice Sonja Sotomayor, the U.S. Supreme Court held that a failure to disclose information required under Item 303 of Regulation S-K is, standing alone, not an actionable omission under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The…
Frankfurt
Frankfurt
The D&O Diary is on assignment in Europe this week, with the first stop in Frankfurt, the German financial capital. The spring weather in Frankfurt was mild and pleasant while I was there, though I was in Frankfurt all too briefly.
The purpose of my visit to Frankfurt was to participate in the DRRT…
Bankruptcy Exclusion Precludes Defense Cost Coverage for Independent Director Sued in Adversary Proceeding
Financially distressed companies often can only obtain D&O insurance coverage on a policy with a bankruptcy or insolvency exclusion precluding coverage for bankruptcy-related claims. The enforcement of these exclusions in the wake of a subsequent bankruptcy can produce harsh results, and insureds often argue that the exclusion does not apply or even that the exclusion…
The Importance of Board Minutes
From time to time, I am asked to speak directly to corporate boards of directors. I find these opportunities endlessly fascinating. Among other things, I learn so much from the directors’ questions. One frequently recurring question I get is: what can directors do to avoid litigation or to be in a position better defend themselves…
When Is a Pre-Suit Demand Letter a Claim?
It is frequently the case that lawsuits are preceded by a letter in which a prospective litigant identifies a grievance and makes various kinds of threats or demands. A perennial question is whether this type of pre-suit demand letter constitutes a “claim” within the meaning of a claims-made liability insurance policy. The Second Circuit, applying…
Cornerstone Research: Accounting-Related Securities Suit Filings Increased in 2023
The number of securities class action lawsuit filings involving accounting allegations increased in 2023 compared to 2022, but the 2023 accounting-related filings remained below the long-term annual average number of such filings, according to the latest annual report from Cornerstone Research. The number of accounting-related settlements decreased during 2023, as did the median settlement value,…
Health Services Management Company Hit with COVID-19 Related Securities Suit
Readers know that since the initial coronavirus-related outbreak in the U.S. in March 2020, I have been tracking the COVID-related securities suit filings. Even though the four-year mark since the initial outbreak recently passed, and even though it has now been a considerable amount of time since businesses fully reopened from government shutdowns, COVID-related securities…
Life Sciences Companies Remained Frequent Securities Suit Targets in 2023
The number of securities class action lawsuits filed against life sciences companies in 2023 remained steady compared to 2022, as suits against life sciences companies represented almost one in five of the securities class action lawsuits filed during the year, according to a new report from the Dechert law firm. The report, entitled “Dechert Survey:…
Claim for Nonpayment Due to Payment Instruction Fraud Potentially Covered Under D&O Policy
In an interesting March 18, 2024, decision, a California federal district court, applying California law, has held that insurance coverage may be available under the D&O liability endorsement to a community association policy for a claim arising from funds misdirected due to fraudulent payment instructions in a spoofed email. The court held that because the…