Three weeks after the federal government seized control of Freddie Mac and Fannie Mae – the two biggest mortgage companies in the United States – news reports indicate that on September 26, 2008, Fannie Mae and Freddie Mac each received federal grand jury subpoenas from the United States Attorney’s Office for the Southern District of New York.
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D&O Liability
New Jersey Appeals Court Holds Pollution Exclusion Does Not Apply to D&O Claim Related to Asbestos Disclosures
By Troutman Pepper Locke on
The New Jersey Superior Court, Appellate Division recently held that a pollution exclusion contained in a D&O liability policy does not bar coverage for shareholder claims alleging fraudulent statements in SEC disclosures concerning alleged pollution.
Third Circuit Upholds Liability of PricewaterhouseCoopers in Ambassador Insolvency
The United States Court of Appeals for the Third Circuit recently upheld a $182.9 million judgment against PricewaterhouseCoopers, LLP (“PWC”) for allegedly contributing to the failure of Ambassador Insurance Company (“Ambassador”) through negligent auditing.
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S.D.N.Y. Dismissal In Amex Indicates How Courts Should Analyze Suits Spawned By Credit Crisis
The United States District Court for the Southern District of New York recently dismissed for a second time a federal securities class action against American Express Co. (“Amex”). The action, entitled In re: American Express Co. Securities Litigation, involves substantial losses by Amex from investments by one of its subsidiaries in high-risk, high-yield debt instruments.
Securities Claim Relates Back to Notice of Circumstances Regarding Patent Infringement Suit
By Troutman Pepper Locke on
The United States District Court for the Northern District of California recently held that a securities fraud claim related back to a notice of circumstances given by the insured to its primary and excess D&O insurers concerning an earlier patent infringement case.
NovaStar Plaintiffs Appeal Subprime Dismissal
By Troutman Pepper Locke on
In early 2007, a purported class of investors in NovaStar Financial Corporation, a residential mortgage lender that made a percentage of its loans to subprime borrowers, sued NovaStar and certain of its directors and officers in the United States District Court for the Western District of Missouri. …
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Proposed $700 Billion Bailout Plan Sparks Shareholder Derivative Action
While Congressional leaders continue to negotiate the terms of a bailout plan to relieve mortgage lenders and investment banks of their distressed mortgage debt, a shareholder derivative action has been filed against PFBB Bancorp (“PFBB”) and several of its directors and officers in the Delaware Chancery Court to enjoin a proposed merger between PFBB and FBOP Bancorp (“FBOP”). A copy of the complaint, filed on September 22, 2008, can be found by clicking here.
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NY Court Rejects Plaintiff’s Counsel’s Fee Award in Settlement of Options Backdating Shareholder Derivative Action
By Troutman Pepper Locke on
The options backdating-related shareholder derivative action against several current and former board members of Glenayre Technologies Inc., settled for certain corporate governance changes at the company and the defendants’ agreement not to challenge a plaintiff’s counsel fee award request of $775,000. …
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Whether a Subpoena Is a “Claim” Depends on the Policy Language and the Nature of the Subpoena
By Troutman Pepper Locke on
Two federal district courts recently reached different results on the question whether a subpoena received by an insured constitutes a “claim” under an insurance policy. …
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States Settle Auction Rate Securities Probe With Credit Suisse
By Troutman Pepper Locke on
On September 16, the North American Securities Administrators Association (NASAA) announced that it had reached a settlement with Credit Suisse under which Credit Suisse will buy back $550 million in Auction Rate Securities (ARS) from individuals, non-profits and small businesses with account sizes under $10 million.
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