In the past year, environmental, social, and governance (“ESG”) practices have faced heightened scrutiny in the United States from state attorneys general, state and federal legislators, other government officials, and...more
6/21/2023
/ 401k ,
Administrative Procedure Act ,
Asset Management ,
Department of Labor (DOL) ,
Duty of Loyalty ,
Employee Retirement Income Security Act (ERISA) ,
Environmental Social & Governance (ESG) ,
Investment ,
Investors ,
Mismanagement ,
Popular ,
Putative Class Actions ,
Retirement Plan Providers ,
Risk Management
Corporate officers owe the same fiduciary duty of oversight as directors.
Just as with directors, officers fulfill their oversight duty by acting in good faith....more
1/30/2023
/ Breach of Duty ,
Corporate Counsel ,
Corporate Officers ,
DE Supreme Court ,
Delaware ,
Directors ,
Duty of Care ,
Duty of Loyalty ,
Duty of Oversight ,
Fiduciary Duty ,
Good Faith
The Delaware Court of Chancery addressed for the first time fundamental precepts of Delaware law in the context of a special purpose acquisition company (“SPAC”) on January 3, 2021. In In re MultiPlan Corp. Stockholders...more
1/19/2022
/ Business Judgment Rule ,
Business Plans ,
Capital Raising ,
Entire Fairness Standard ,
Failure To Disclose ,
Fiduciary Duty ,
Initial Public Offering (IPO) ,
Merger Agreements ,
Right of Redemption ,
Shareholder Litigation ,
Special Purpose Acquisition Companies (SPACs)
The U.S. Court of Appeals for the Tenth Circuit has affirmed the lower court’s trial ruling in the Section 36(b) lawsuit, Obeslo v. Great-West Capital Management, LLC et al.1 The ruling comes at the tail end of a wave of...more
This OnPoint is the first in a series that will examine important trends and developments in class action litigation under the Employee Retirement Income Security Act of 1974 (ERISA). Here, we look at the current litigation...more
11/20/2020
/ Article III ,
Breach of Duty ,
Class Action ,
Corporate Counsel ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
ESOP ,
Fiduciary Duty ,
FIfth Third Bancorp v Dudenhoeffer ,
Intel Corp. Investment Policy Committee v. Sulyma ,
Investment Management ,
Retirement Plan ,
Standing ,
Stock Drop Litigation ,
Thole v U.S. Bank
In the first test outside of Delaware, a California court ruled that federal forum selection provisions enacted by Delaware corporations should be enforced so long as they are not unreasonable, meaning they do not alter...more
The U.S. District Court for the District of Colorado on August 7, 2020 issued its post-trial findings of fact and conclusions of law in Obeslo v. Great-West Capital Management, LLC et al. The ruling comes at the tail end of a...more
8/20/2020
/ Actual Damages ,
Breach of Duty ,
Burden of Proof ,
Calculation of Damages ,
Damages ,
Excessive Fees ,
Fiduciary Duty ,
Gartenberg Factors ,
Investment Adviser ,
Investment Company Act of 1940 ,
Motion for Summary Judgment ,
Motion to Dismiss ,
Post-Trial Order ,
Section 36(b) ,
Shareholder Litigation ,
Standing
Last week, the U.S. Supreme Court ruled on June 1, 2020 in Thole v. U.S. Bank that a participant in a defined benefit (“DB”) plan is constitutionally barred from bringing a fiduciary-breach (or similar) claim under the...more
6/11/2020
/ Article III ,
Breach of Duty ,
Defined Benefit Plans ,
Duty of Loyalty ,
Duty of Prudence ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Injury-in-Fact ,
Investment Adviser ,
Mismanagement ,
Pensions ,
Plan Participants ,
Retirement Plan ,
SCOTUS ,
Standing ,
Thole v U.S. Bank
Especially in today’s economic and work environment, we find it helpful – and we therefore thought our clients would also find it helpful – to keep track of the important litigation and regulatory enforcement developments...more
6/11/2020
/ Asset Management ,
Class Action ,
Coronavirus/COVID-19 ,
Dodd-Frank ,
Enforcement Actions ,
Environmental Social & Governance (ESG) ,
Fiduciary Duty ,
Investment ,
Proxy Materials ,
Regulation Best Interest ,
Section 36(b) ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation
Although the loan industry has long looked at loans as being obligations that arise in a commercial lending relationship, which are therefore not securities under Federal and state securities laws, the law supporting this...more
6/2/2020
/ Blue Sky Laws ,
Collateralized Loan Obligations ,
Coronavirus/COVID-19 ,
Debt Securities ,
Fiduciary Duty ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Lenders ,
Loans ,
Reves Test ,
Secured Notes ,
Securities ,
Securities Act of 1933 ,
Securities Exchange Act ,
Syndicated Loans
Especially in today’s economic and work environment, we find it helpful – and we therefore thought our clients would also find it helpful – to keep track of the important litigation and regulatory enforcement developments...more
5/27/2020
/ Asset Management ,
CARES Act ,
Clawbacks ,
Commercial Bankruptcy ,
Coronavirus/COVID-19 ,
Disclosure Requirements ,
Enforcement Actions ,
Exchange-Traded Products ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Fraudulent Conveyance ,
Investment Management ,
Oil & Gas ,
Paycheck Protection Program (PPP) ,
Regulatory Oversight ,
Section 36(b) ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Shareholder Litigation
Key Takeaways -
The COVID-19 coronavirus outbreak has undoubtedly increased firms’ exposure to market abuse risks in a number of ways:
Due to the rapidly changing consequences of restrictions caused by COVID-19 for...more
4/7/2020
/ Business Continuity Plans ,
Compliance ,
Coronavirus/COVID-19 ,
Financial Conduct Authority (FCA) ,
Global Market ,
Hong Kong ,
Hong Kong Securities and Futures Commission (HKSFC) ,
Hong Kong Stock Exchange ,
Insider Information ,
Liquidity ,
Market Abuse ,
Publicly-Traded Companies ,
Remote Working ,
Securities and Exchange Commission (SEC) ,
SEHK ,
UK ,
United States
Key Takeaways
- Sixth Circuit Court of Appeals reaffirms that comparison of advisory fees to subadvisory fees is “inapt” under Jones v. Harris Assocs., relying on undisputed evidence of differences in services and...more
4/3/2020
/ Appeals ,
Breach of Duty ,
Excessive Fees ,
Fiduciary Duty ,
Gartenberg Factors ,
Investment Adviser ,
Mutual Funds ,
Reaffirmation ,
Section 36(b) ,
Shareholder Litigation ,
Summary Judgment
Key Takeaways -
Salzberg, et al. and Blue Apron Holdings, Inc., et al. v. Sciabacucchi, Case No. 346, 2019, 2020 WL 1280785 (Del. Mar. 18, 2020), is a landmark decision critically important to companies preparing...more
Under Section 413(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”), ERISA’s three-year statute of limitations for fiduciary breaches and certain other violations starts to run when “the plaintiff had actual...more
3/6/2020
/ Actual or Constructive Knowledge ,
Appeals ,
Breach of Duty ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Intel Corp. Investment Policy Committee v. Sulyma ,
Material Disclosures ,
Question of Fact ,
Reaffirmation ,
Retirement Plan ,
Retirement Plan Beneficiaries ,
Reversal ,
SCOTUS ,
Split of Authority ,
Statute of Limitations ,
Summary Judgment
In a ruling of potential importance for investment advisers and directors/trustees of registered investment companies, a California appellate court affirmed a lower court ruling on January 23, 2020 in Garth Jensen, et al. v....more
2/19/2020
/ Appeals ,
Asset Tracing ,
Board of Directors ,
ETFs ,
False Statements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Judgment on the Pleadings ,
Misleading Statements ,
Offering Statements ,
Registered Investment Companies (RICs) ,
Registration Statement ,
Retail Investors ,
Secondary Markets ,
Securities Act of 1933 ,
Securities Fraud ,
Securities Litigation ,
Standing ,
Trustees
The U.S. District Court for the Southern District of New York issued a comprehensive post-trial ruling on September 30, 2019 in Chill v. Calamos Advisors LLC, holding that Plaintiffs failed to meet their burden to show that...more
10/10/2019
/ Breach of Duty ,
Burden of Proof ,
Dismissals ,
Excessive Fees ,
Expert Witness ,
Fiduciary Duty ,
Gartenberg Factors ,
Investment Adviser ,
Investment Company Act of 1940 ,
Mutual Funds ,
Section 36(b)
The U.S. Court of Appeals for the Second Circuit, in disagreeing with the Courts of Appeals for the Third and Ninth Circuits, ruled on August 5, 2019 in Oxford University Bank v. Lansuppe Feeder, Inc. that a private right of...more
9/10/2019
/ Appeals ,
Breach of Contract ,
Equitable Relief ,
Failure to Report ,
Investment Company Act of 1940 ,
Investment Funds ,
Investors ,
Junior Lenders ,
Liquidation ,
Mutual Funds ,
Noteholders ,
Private Right of Action ,
Rescission ,
Section 47(b) ,
Senior Investors ,
Split of Authority ,
Summary Judgment ,
Trusts
Within recent weeks, there have been three noteworthy court rulings in pending Section 36(b) cases, with one court granting a motion to dismiss and two different courts fully granting substantive motions for summary judgment....more
3/29/2018
/ Appeals ,
Arms Length Transactions ,
Dismissals ,
Excessive Fees ,
Failure To State A Claim ,
Fiduciary Duty ,
Gartenberg Factors ,
Genuine Issue of Material Fact ,
Investment Adviser ,
Investment Company Act of 1940 ,
Motion for Summary Judgment ,
Motion to Dismiss ,
Mutual Funds ,
Standard of Review
The U.S. District Court for the Northern District of Illinois denied a motion to compel production of attorney-client privileged documents on April 25, 2017, in connection with the Section 36(b) lawsuit Chill v. Calamos...more
The Chairman of the Financial Services Committee of the U.S. House of Representatives, Jeb Hensarling (R-TX), on April 19, 2017 released an updated discussion draft of the Financial CHOICE1 Act (Bill), and the Committee held...more
5/1/2017
/ Breach of Duty ,
Burden of Proof ,
Clear and Convincing Evidence ,
Excessive Fees ,
Federal Pleading Requirements ,
Fiduciary Duty ,
Financial Services Industry ,
Gartenberg Factors ,
Investment Adviser ,
Motion to Dismiss ,
Mutual Funds ,
Preponderance of the Evidence ,
Private Right of Action ,
Proposed Legislation ,
Section 36(b) ,
Shareholder Rights ,
Standard of Review
The U.S. District Court for the District of New Jersey recently issued its post-trial ruling in Kasilag et al. v. Hartford Investment Financial Services, LLC et al. The Hartford ruling is the second post-trial Section 36(b)...more
Life sciences companies continued to be popular targets of securities fraud class action lawsuits filed in 2016, and prudent life sciences companies should take heed of the results of this year’s decisions. In 2016,...more
3/9/2017
/ Antitrust Violations ,
Class Action ,
Drug Pricing ,
False Statements ,
FDA Approval ,
Generic Drugs ,
Life Sciences ,
Material Misrepresentation ,
Omissions ,
Popular ,
Price-Fixing ,
Promotional Items ,
Risk Mitigation ,
Securities Fraud ,
Stock Drop Litigation
The U.S. District Court for the District of New Jersey issued its post-trial ruling on August 25, 2016 in Sivolella v. AXA Equitable Life Insurance Company—the first Section 36(b) trial decision since 2009. The Court...more
9/20/2016
/ AXA Equitable Life ,
Burden of Proof ,
Fees ,
Fiduciary Duty ,
Gartenberg Factors ,
Insurance Industry ,
Investment Adviser ,
Investment Company Act of 1940 ,
Investment Funds ,
Life Insurance ,
Mutual Funds ,
Section 36(b)
AXA Investor Fees Held Not To Constitute a Breach of Fiduciary Duty -
The U.S. District Court for the District of New Jersey issued its trial ruling on August 25, 2016 in Sivolella v. AXA Equitable Life Insurance...more