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Known Knowns and Unknowns: The Future of Securities Class Actions

Donald Rumsfeld is not always popular or easily understood, but he is often quotable. For example, in one of his most famous encounters with the media while serving as U.S. secretary of defense prior to the Second Gulf War, Rumsfeld stated : “As we know, there are known knowns; there are things...

Second Circuit Vacates Dismissal of JinkoSolar Securities Suit

In an interesting July 31, 2014 opinion ( here ), the Second Circuit vacated the dismissal of the securities class action lawsuit that had been filed against JinkoSolar Holdings Co. Ltd, and certain of its directors and officers, as well as against its offering underwriters [an enhanced version of this...

Securities Suits Hit Firms Allegedly Using Stock Promoters to Boost Share Price

On July 30, 2014, when a plaintiff shareholder filed a securities class action lawsuit against the company and certain of its directors and officers, Galectin Therapeutics became the latest company to be hit with a securities suit following press reports that the company had used a stock promotion firm...

Securities Class Actions and IPOs Increased in the First Half of 2014

The number of securities class actions filed in the first half of this year increased compared to the same period last year. During the same period the number of IPOs increased significantly, suggesting that in the future there may be even more securities class actions brought, according to a new report...

A Closer Look at AIG’s $960 Million Credit Crisis-Related Securities Suit Settlement

AIG has agreed to pay $960 million to settle the consolidated securities class action lawsuit that had been filed against the company and certain of its directors and officers in the wake of the company’s near collapse at the peak of the credit crisis. The settlement, which AIG disclosed in its...

Another Environmental Disclosures Securities Suit Survives Initial Pleading Hurdles

In recent months, there have been a number of securities class action lawsuits filed based on alleged misrepresentations of the defendant company’s environmental compliance. On August 7, 2014, the securities suit filed against Exide Technologies and certain of its directors and officers based on...

Shareholders, Underwriters Reach $340M Settlement in Securities Class Action

NEW YORK — (Mealey’s) Shareholders and underwriters in a securities class action lawsuit stemming from IndyMac Bancorp’s certificate offerings over a three-year period from 2005 to 2007 have agreed to settle all claims for $340 million, according to court documents filed Thursday by...

Corruption Allegations Lead to Securities Lawsuits

I was on a panel at a law firm event last week during which I was asked to make some predictions for 2015. Among other things, I said that I thought we would see an increase of securities class action lawsuit filings following in the wake of regulatory investigations, especially bribery investigations...

NERA Securities Litigation Report: Filings Flat, Number and Value of Settlements Plunge

The number of securities class action filings in 2014 was level with recent years’ filings but the number and dollar value of settlements during the year plunged, according to the latest annual report from NERA Economic Consulting. This year’s report is quite detailed and contains a number...

Pfizer to Pay $400M to Settle Securities Suit Over Off-Label Marketing Scheme

NEW YORK — (Mealey’s) Pfizer Inc. will pay $400 million to settle claims that it engaged in illegal off-label marketing and kickback schemes for certain of its products in violation of federal securities laws, according to a Securities and Exchange Commission document filed by Pfizer yesterday...

Securities Class Actions as an Adjunct to SEC Enforcement Actions

The SEC has long considered securities class actions a necessary adjunct to its enforcement program. The Commission has repeatedly noted this point in briefs. The Supreme Court acknowledged the fact. Both Cornerstone Research ( here ) and NERA Economic Consulting ( here ) track statistics on securities...

Trends In Canadian Securities Class Action

Filings for new Canadian securities class actions have been essentially flat over the last three years, according to a recent report by NERA Economic consulting ( here ). That trend is consistent with the one for the filing of U.S. class actions ( here ). Last year there were 11 securities class actions...

Thinking About Bondholder Securities Class Actions

When the topic is securities class action litigation, what is usually considered are lawsuits brought under the federal securities laws by shareholders. By way of illustration, when considering the extent of a company’s potential exposure to a future securities class action lawsuit, the starting...

Life Sciences Companies and Securities Litigation: 2014 Update

Life sciences companies are “an increasingly popular target” of securities class action lawsuits, according to the annual securities litigation survey from the David A. Kotler of the Dechert law firm. According to the March 16, 2015 report, entitled “Dechert Survery of Securities Fraud...

Yet Another U.S. Securities Suit Arising From a Latin American Corruption Investigation

In yet another U.S. securities class action lawsuit involving a non-U.S. company and a corruption investigation in the company’s home country, on March 19, 2015 a shareholder of Chemical & Mining Company of Chile, Inc. ( Sociedad Quimica y Minera de Chile, S.A, or SQM), the world’s largest...

Cornerstone Research: Average and Aggregate Securities Suit Settlements Plunged in 2014

The aggregate amount of all securities class action settlements during 2014 declined to the lowest level in years and there also was a “dramatic” decrease in the average securities suit settlement amount during the year, according to a March 24, 2014 report from Cornerstone Research. The...

U.S. Supreme Court Applies Reasonable Basis Standard for Statements of Opinion

WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court on March 24 reversed and remanded a Sixth Circuit U.S. Court of Appeals opinion in a securities class action lawsuit that determined that a company’s executive officers may be held liable for statements made to investors that later...

Omnicare: Section 11 Liability and Opinions

The Supreme Court defined the circumstances under which liability can be imposed for opinion statements under Securities Act Section 11. Specifically, the Court held that such liability could be imposed on two theories: One focuses “on what the statement says and the other on what it leaves out...

More Class Actions Claim GAAP Violations, Less Paralleled by SEC Case

Last year the number of securities class action cases settled remained largely constant compared to the prior year, according to a report by Cornerstone Research ( here ). At the same time the number of cases alleging GAAP violations increased, although only a small percentage involved restatements....

Cornerstone Research: Accounting-Related Securities Suits Jump in 2014

The number of securities class action lawsuit filings raising accounting allegations rose by 47 percent in 2014 compared to the prior year, according to a new report from Cornerstone Research. The March 31, 2015 report, entitled “Accounting Class Action Filings and Settlements: 2014 Review and...

Accounting Cases – An SEC Priority, but the Cases Being Filed Are Class Actions

Accounting and financial fraud cases are an SEC priority. The cases, however, are being brought by the private bar as class actions. The number of accounting class actions filed last year increased by 47% compared to the prior year despite the fact that the number of securities class actions filed was...

PwC Report Reviews 2014 Securities Suit Filings and Settlements, Analyzes Trends Likely to Drive Future Suits

On April 10, 2015, PwC released the latest in what is now a series of annual securities class action litigation reports. PwC’s report is generally consistent with the reports previously published by Cornerstone Research and NERA. What makes the PwC report noteworthy is its commentary on the trends...

Are Event Studies in Securities Litigation Reliable?

In its June 2014 opinion in the Halliburton case, the U.S. Supreme Court held that securities lawsuit defendants may introduce evidence at the class certification stage to try to show that the alleged misrepresentation on which the plaintiffs rely did not impact the defendant company’s share price...

Supreme Court Vacates Ruling in Securities Suit, Remands for Further Review

WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court today granted a petition for writ of certiorari in a securities class action lawsuit seeking determination of whether, pursuant to Section 11 of the Securities Act of 1933, a plaintiff must show not only that an opinion contained false...

Year-to-Date Securities Suit Filings Disproportionately Involve Non-U.S. Companies

Historically, non-U.S. companies listed on U.S. exchanges were sued in securities class action lawsuits less frequently than were listed U.S. companies. For several years now, according to NERA , non-U.S. firms have represented about 16% of all companies listed on the U.S. exchanges, but according to...