D&O Liability

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On July 17, 2006, Washington State Plumbing and Pipefitting Pension Trust, on behalf of shareholders of Bermuda-based insurer Quanta Capital Holdings, Ltd. (“Quanta”), filed an amended securities class action complaint against Quanta and several of Quanta’ directors alleging that the registration and prospectus for Quanta’s common stock offering contained materially false and misleading statements in violation of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and Sections 10(b) (including SEC Rule 10b-5 promulgated thereunder) and 20(a) of the 1934 Securities Exchange Act. 

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Read More Court Dismisses Hurricane Reserve-Related Securities Class Action

On January 16, 2009, Ohio Attorney General Richard Cordray and investors agreed to approve a $475 million settlement for a class action suit filed against Merrill Lynch (In re Merrill Lynch & Co., Inc. Securities, Derivative and ERISA Litigation, No.07-CV-9633 (S.D.N.Y.)). …
Read More Merrill Lynch Settles Investor and Employee Suits Regarding Subprime Disclosures

According to its recent Form 10-Q SEC filing, Merck’s insurance coverage will not suffice to fully cover the November 2007 settlement reached in connection with the federal Vioxx class action litigation, reported to be for an “aggregate amount of $4.85 billion” for qualifying domestic claims (a figure that does not include legal defense costs). …
Read More Merck Reports Dispute With Insurers Over Coverage of Vioxx Claims

This summer, the Delaware Chancery Court arguably expanded the potential liability of independent directors of Delaware corporations by declining to grant summary judgment in favor of non-conflicted, independent directors that had allegedly accepted a buyout offer without performing standard due diligence about the fairness of the deal. 

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Read More Delaware Supreme Court May Uphold Expansion of the Potential Liability of Independent Directors

New York’s First Department recently issued a decision addressing the circumstances under which a company’s appointment of a special litigation committee (“SLC”) can shield its directors and officers from shareholder derivative litigation. 

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Read More New York State Court Reverses Demand Futility Dismissal Although Board Had Formed an SLC Before Litigation Was Filed

The Second Circuit Court of Appeals has affirmed the dismissal of an “F-Cubed” securities class action — i.e., a securities class action brought by foreign investors who purchased shares in a foreign company on a foreign stock exchange — on subject matter jurisdiction grounds. …
Read More Second Circuit Affirms Dismissal Of “F-Cubed” Securities Class Action

The United States District Court for the District of Colorado recently held that a warranty letter’s prior knowledge exclusion barred coverage for defense costs incurred by the insured directors and officers in an enforcement action initiated by the SEC. A copy of the decision can be found here. 

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Read More Prior Knowledge Exclusion in Warranty Letter Relieves D&O’s Insurer’s Obligation to Pay Increased Limits

In November 2007, shareholders of Vodafone Group Plc (“Vodafone”) filed a securities class action complaint in the U.S. District Court for the Southern District of New York under section 10(b) of the Securities Exchange Act of 1934 (the”34 Act”) alleging that Vodafone and several of its directors and officers artificially inflated the price of Vodafone’s stock through allegedly false and misleading statements about its financial health and business prospects. 

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Read More Vodafone Securities Class Action Dismissed For Lack of Subject Matter Jurisdiction

Cornerstone Research, in cooperation with Stanford Law School’s Securities Class Action Clearinghouse, recently released its report on federal securities class action filings in 2008. 

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Read More Cornerstone Report: Securities Class Action Filings Soar in 2008 Due to an Increase in Filings Against Financial Services Firms

The U.S. District Court for the Central District of California recently granted a motion to dismiss, without prejudice, for failure to adequately plead the reliance element of a purported securities class action brought under Section 10(b) of the 1934 Securities Exchange Act. …

Read More California Federal Court Grants Motion to Dismiss For Failure to Plead Reliance in Countrywide Private Placement Action