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.
D&O Liability
Eleventh Circuit Broadly Construes Prior Litigation Exclusion
By Troutman Pepper Locke on
Posted in D&O Liability, United States
The United States Court of Appeals for the Eleventh Circuit recently held that a D&O policy’s so-called “Prior Litigation” Exclusion barred coverage for a shareholder derivative action because it was “in any way related” to litigation pending prior to the Prior Litigation Date specified in the policy.
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California Federal Court Dismisses Shareholder Derivative Action Against Countrywide
By Troutman Pepper Locke on
The U.S. District Court for the Central District of California recently granted the defendants’ motion for judgment on the pleadings in a consolidated shareholder derivative action alleging breach of fiduciary duty against Countrywide’s former directors and officers arising out of Countrywide’s exposure to the subprime crisis.
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FINRA Announces Details of Special Arbitration Procedure for Auction Rate Securities Consequential Damages
By Troutman Pepper Locke on
Each of the regulatory settlements to date with auction rate securities (“ARS”) issuers and brokers has included a provision requiring that the firm consent to a “special arbitration procedure” to deal with investors’ consequential damages relating to the sudden illiquidity of ARS. On December 16, 2008, the Financial Industry Regulatory Authority (“FINRA”) announced the details of this “special arbitration procedure.”
Ninth Circuit Dismisses Securities Fraud Claim For Failing To Plead Individual Scienter
By Troutman Pepper Locke on
Posted in D&O Liability, United States
The Ninth Circuit Court of Appeals recently dismissed a securities fraud claim for failure to plead individual scienter with sufficient particularity. …
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Federal Court Rules That No D&O Coverage Exists For Discrimination Claims Despite Allegations Against Company’s Directors and Officers
By Troutman Pepper Locke on
The Federal District Court for the District of Maine recently held that a discrimination suit was not covered by a directors and officers liability insurance policy where the suit alleged corporate actions through a company’s officers and directors, but named only the company as a defendant.
The New York Insurance Department Will No Longer Approve D&O Policies Lacking “Duty-to-Defend” Coverage Feature
By Troutman Pepper Locke on
The New York Insurance Department has long prided itself for being an activist state regulator for insurance business underwritten in the world’s financial capital. …
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Update: Court Denies Wachovia Shareholder’s Request to Enjoin the Well Fargo-Wachovia Merger
By Troutman Pepper Locke on
We previously reported on a Wachovia shareholder’s attempt to enjoin the Wells Fargo-Wachovia merger (please click here to view previous post). On December 5, 2008, Judge Albert Diaz of the North Carolina Business Court denied the Wachovia shareholder’s request for a preliminary injunction.
Prior Acts Provision Bars Coverage Even If Insured Could Not Reasonably Foresee Claim By Specific Claimant
By Troutman Pepper Locke on
The Eighth Circuit Court of Appeals recently held that no coverage was available under two excess professional liability claims-made insurance policies for class action lawsuits asserting claims similar to those asserted in class actions filed prior to the policies’ effective date. In so ruling, the Court rejected the insured’s argument that the later suits were covered despite the policies’ prior acts provision because, at the time of the policies’ inception, the insured could not reasonably foresee that a claim might be brought by the specific claimants.
Court Grants Request for Expedited Proceeding By Wachovia Shareholder Seeking To Enjoin Wells-Fargo Merger
By Troutman Pepper Locke on
On October 2, 2008, Wells Fargo presented Wachovia with a signed and Board-approved offer to purchase Wachovia Corporation without government assistance in a stock-for-stock merger transaction valued at $10 billion. Prior to receiving this proposal, Wachovia had been negotiating with Citigroup to complete a merger transaction that included assistance from the federal government.