D&O Liability

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In a working paper recently released, the Public Company Accounting Oversight Board (PCAOB), a non-profit entity created by the Sarbanes-Oxley Act (SOX) to oversee the auditors of public companies, found that the loss in market value following announcements of financial restatements has diminished since the July 30, 2002 implementation of SOX. 

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Read More PCAOB Study: Post-SOX Drop in Market Reaction to Restatements

The Massachusetts Secretary of the Commonwealth confirmed on Friday October 19, 2007 that it is investigating certain trades in two failed Bear Stearns funds.  The investigation, which was first reported in the Wall Street Journal last week, involves trades between Bear Stearns and two hedge funds managed by Bear Stearns that may have been made without the proper disclosures to the funds’ independent directors. 

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Read More Bear Stearns Faces Further Scrutiny as Massachusetts Regulators Probe Failed Hedge Funds

A recent report by Lehman Brothers Equity Research (“Lehman”) concluded that the estimated impact to D&O/E&O insurers from subprime issues will likely be no more than $1 billion.  Lehman Brothers arrived at this estimate using past financial institution professional liability problems as a benchmark. 

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Read More Commentators Disagree Over D&O/E&O Exposure from Subprime Litigation

According to various media reports (click here and here to read two such reports), a settlement in principle has been reached in a stock options backdating involving Mercury Interactive Corporation, a business software company acquired by Hewlett-Packard last year.  According to the reports, the settlement is for $117.5 million, which would make this the largest settlement in an options-backdating case to date. 

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Read More $117.5 Million Settlement in Stock Options Backdating Case

Last week we reported that Prudential Financial, Inc. and one of its subsidiaries, Prudential Retirement Insurance and Annuity Company, has sued State Street & Trust Corp. and State Street Global Advisors over losses allegedly suffered by Prudential clients in two bond funds managed by State Street  (see here). 

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Read More Alaska and Idaho Reportedly Investigate State Street Over Mortgage Investments as States Increase Scrutiny of the Mortgage Crisis

The United States District Court for the Southern District of New York recently broadly applied a so-called “prior and pending litigation” exclusion to limit coverage for the settlement of a lawsuit, finding that many of the lawsuit’s allegations overlapped with allegations made in a lawsuit filed prior to the inception of the policy. 

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Read More SDNY Applies “Prior And Pending Litigation” Exclusion To Limit Coverage Under D&O Policy

The United States Supreme Court heard oral argument yesterday in a case that presents the Court with the opportunity to broaden the class of potential defendants in private securities class actions, which would substantially increase litigation exposure for corporate America.  The questions and comments of the Justices suggest that the majority of the Court is not prepared to alter the current securities class action landscape. 

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Read More Stoneridge v. Scientific-Atlanta: Supreme Court Indicates It Will Not Broaden Secondary Actor Liability In Securities Class Actions

Massachusetts Attorney General Martha Coakley announced on Friday that her office has filed a lawsuit against one of the nation’s largest subprime lenders, Fremont Investment and Loan (“Fremont”).  The suit accuses Fremont of predatory lending practices under Massachusetts’ 2004 Predatory Home Practices Act. 

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Read More Massachusetts Attorney General Files Suit Against National Mortgage Lender Over Subprime Mortgages

The Fall 2007 Edition of the EAP&D Corporate Law and Litigation Bulletin has recently been released and is available here.  The Bulletin contains discussion of the following developments: 

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Read More EAP&D Corporate Law And Litigation Bulletin Addresses Recent Statutory And Caselaw Developments In Delaware Corporate Law

In a decision dated, September 27, 2007, the Hon. Bernard J. Fried, Commercial Division Justice of the New York Supreme Court for the County of New York, granted in part and denied in part Akin Gump Strauss Hauer & Feld LLP’s motion to dismiss a lawsuit filed by the Veras hedge fund families (“Veras Hedge Funds”) in the case captioned Veras Investment Partners, LLC, et al.  v. Akin Gump Strauss Hauer & Feld LLP, Index No. 600340/2007. 

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Read More New York Supreme Court Commercial Division Allows Fraud Claim Against Law Firm That Advised Hedge Fund On Market Timing Trading Which Resulted In Regulatory Investigation