D&O Liability

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Cornerstone Research, in cooperation with Stanford Law Schools Securities Class Action Clearinghouse, recently released a report on federal securities class action filings in the first half of 2008. …
Read More Report: Subprime Mortgage and Auction Rate Securities Issues Fuel Increase In Securities Class Action Filings In The First Half of 2008

The New York Attorney General filed a civil complaint yesterday against UBS Securities LLC and UBS Financial Services, Inc. alleging that UBS “committed a multi-billion dollar consumer and securities fraud on the investing public by falsely selling securities facing mounting liquidity risk as cash equivalents.” 

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Read More NY Attorney General Files Auction Rate Securities Complaint Against UBS

The Ninth Circuit federal court of appeals recently held that the Class Action Fairness Act of 2005 (CAFA), which permits in general the removal to federal court of high-dollar class actions involving diverse parties, does not supersede section 22(a)’s specific bar against removal of cases arising under the Securities Act of 1933 (’33 Act). 

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Read More Ninth Circuit: CAFA Does Not Override Anti-Removal Provision of Securities Act of 1933 in Subprime Class Action

The Delaware Superior Court recently held that a fraud exclusion in a D&O policy did not bar coverage arising out of a stockholder litigation because the settlement of litigation did not constitute an adjudication of fraud as required to trigger the fraud exclusion. 

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Read More Delaware Superior Court: Settlement of An Action is Not An Adjudication For Purposes of Applying Fraud Exclusion in D&O Policy

In the wake of a lawsuit by the Massachusetts Securities Division alleging fraudulent sales of auction rate securities (“ARS”), UBS AG reportedly plans to buy back as much as $3.5 billion in ARS-impacted preferred shares issued by tax-exempt closed-end funds. 

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Read More UBS Agrees To Buy Back Up To $3.5 Billion Of Auction Rate Preferred Shares

On July 2, 2008, United Health Group announced that it has reached a tentative agreement to settle a federal securities class action lawsuit relating to its historical stock options practices.  The $895 million settlement is the largest settlement of any stock option backdating securities class action to date. …
Read More United Health Group Announces $895 Million Securities Class Action Settlement

According to press reports, Tammy Andreycak, a former director of accounting at Le-Nature’s Inc., recently pleaded guilty to multiple fraud charges in the United States District Court for the Western District of Pennsylvania. The charges included bank fraud, wire fraud, conspiracy and filing false income-tax returns, all allegedly taking place between 2003 and 2006. 

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Read More Financial Executive Becomes First Le-Nature’s Employee to Face Criminal Prosecution for Fraud

Several news sources recently reported that the U.S. Attorney’s Office for New York’s Eastern District is conducting a criminal investigation into whether two former Credit Suisse brokers lied to investors in auction rate securities (“ARS”) about the nature of those securities.  The probe into the two Credit Suisse brokers is the first known criminal matter stemming from the troubled ARS market. …
Read More Federal Prosecutors Probe Two Credit Suisse Brokers Regarding Auction Rate Securities

In the latest adverse development in  the deepening credit crisis, federal regulators recently seized the assets of IndyMac Bank, a major mortgage lender.   IndyMac held $32.01 billion in assets as of March 31, 2008.  The Office of Thrift Supervision said it transferred IndyMac’s operations to the Federal Deposit Insurance Corporation because it no longer had confidence that IndyMac could meet its depositors’ demands. 

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Read More Government Shuts Down Mortgage Lender IndyMac: FDIC Takes Over Operations

On July 8, 2008, the SEC announced the results of its investigation of the three major rating agencies, Fitch Ratings Ltd., Moody’s Investor Services Inc. and Standard & Poor’s.  The investigation uncovered “significant weaknesses in ratings practices.” …
Read More SEC Ratings Agency Investigation Finds Serious Problems and Proposes Some Rule Changes