In The Kittansett Club v. Philadelphia Indemnity Ins. Co., No. 11-11385 (Sept. 10, 2012), the District of Massachusetts ruled that a D&O insurer does not owe defense or indemnity to its insured when the insured had a duty prior to committing the alleged Wrongful Act to pay the amounts at issue. …
Read More District Court Finds No “Loss” Under D&O Policy When Insured Had Pre-Existing Duty to Pay For Tips in Dispute in Underlying Lawsuit

D&O carriers and brokers will want to keep October 2013 on their calendars.  At a hearing three weeks ago, a UK High Court judge set that month as the date for trial in Graiseley Properties Limited v. Barclays Bank PLC.  It is the first civil suit against a major UK bank concerning manipulation of the London Interbank Offered Rate to be allowed to proceed. …
Read More Barclays to Face First LIBOR Trial in October 2013

Investors in various mutual funds managed by Principal Financial Group filed a derivative action under Section 36(b) of the Investment Company Act of 1940 in Iowa federal court in late October, alleging that the company charged excessive fees.  The complaint in Curran et al. v. Principal Management Corporation & Principal Funds Distributor, Inc., S.D. Iowa No. 12-513, is available here. …
Read More Are Mutual Fund Investors Seeking an End Run Around Ameriprise Financial v. Gallus?

On October 17, the SEC filed a lawsuit in the Southern District of New York against hedge fund Yorkville Advisors LLC, as well as its President Mark Angelo and CFO Edward Schinik.  The action, brought by the SEC’s Asset Management Unit, is the latest alleged fraud brought to light by its “Aberrational Performance Inquiry,” which uses risk analytics to identify returns from hedge funds that appear to be too good to be true. …
Read More SEC’s Asset Management Unit Continues to Probe Valuation Methods of Hedge Funds with Latest Case Against Yorkville

D&O and E&O carriers alike will want to keep a close eye on the US Supreme Court this term.  On September 25, the court accepted the matter of Gabelli v. SEC, No. 11-1274.  Another market-timing case against investment advisors, at issue in Gabelli is when a claim accrues under the 5-year statute of limitations for SEC enforcement actions. …
Read More Market Timing Case Goes to U.S. Supreme Court

D&O issuers and policyholders concerned about their exposure to Exchange Act claims for overly optimistic wind-energy deals may be breathing easier in the wake of a Massachusetts federal district court’s holding that a pension fund could not state a viable cause of action against American Superconductor. …
Read More Massachusetts Federal Court Shows Little Patience for Poorly-Pled Exchange Act Claims