Yesterday’s second afternoon session at the PLUS D&O Symposium focused on emerging liabilities for corporate executives.
Currently, our attention is squarely affixed on the current subprime and credit crisis. The panel addressed the issue of whether the groundwork is currently being laid for the next event and also discussed several emerging risks.
The panel, providing the diverse perspectives of securities plaintiffs, defense counsel, coverage counsel, brokers and underwriters made several noteworthy predictions about emerging risks, including:
- increased bankruptcies will result in more litigation; plaintiffs’ firms who typically bring securities class actions are looking to represent creditor committees and litigation trusts in bankruptcy actions;
and
- increased government intervention by the new administration will result in more regulatory proceedings and enforcement actions by the SEC and DOJ (including violations of the Foreign Corrupt Practices Act).
The panelists were mindful of these emerging risk and the potential impact on D&O policies, and stressed the risk of significant defense costs that may be incurred in connection with a regulatory proceeding.
