Business Organization, Securities Law, Business Torts

ISS Charged With Selling Shareholder Vote Data; Agrees To $300,000 Settlement

by David Jenson | Leonard, Street and Deinard - Dodd-Frank and... on 5/24/2013

The SEC and Institutional Shareholder Services, Inc. (ISS) have settled public administrative and cease-and-desist proceedings initiated against ISS by the SEC alleging that ISS violated Section 204A of the Advisers Act by...more

Best Laid Plans Gone Awry: Practices for Rule 10b5-1 Trading Plans

by Sarah A. Good, Laura Hurtado, Gabriella Lombardi, Cindy V. Schlaefer, Brian Wong | Pillsbury Winthrop Shaw Pittman LLP on 5/10/2013

Rule 10b5-1 trading plans are in the limelight due to investigations initiated by U.S. Attorney’s Offices and the SEC into possible abuses by corporate executives of such plans. Now, more than ever, companies and their boards...more

DOJ and SEC Scrutinize Potential Misuse of Rule 10b5-1 Trading Plans by Corporate Directors Affiliated with Investment Advisers

by Ashley Burden, Stephen Leitzell, Andrew L. Oringer, Adam Wasserman | Dechert LLP on 5/10/2013

Over the past four years, the U.S. Department of Justice (“DOJ”) and U.S. Securities and Exchange Commission (“SEC”) have focused on insider trading involving private funds as one of their key targets in the fight against...more

Capital Infusion - May 2013: Case Spotlight

by Adam Connatser, Jon Finger, Rani Hauth Guerra, J. Atwood Jeter, David McLean | Patton Boggs LLP on 5/9/2013

Down-Round Equity Financings and Subsequent Exit Transactions - Best Practices for Preferred Investors and their Board Designees - Today’s middle market private equity landscape is as diverse and varied as it has ever...more

Delaware Court Dismisses Securities Fraud Action Against Power Plant Executives

by Michael S. Gordon, Dean Razavi | Katten Muchin Rosenman LLP on 5/8/2013

The US District Court for the District of Delaware dismissed a class action for securities fraud against former officers and directors of a geothermal energy company, in which the plaintiffs alleged that the defendants had...more

Rich v. Chong, C.A. No. 7616-VCG (Del. Ch. Apr. 25, 2013) (Glasscock, V.C.)

by Potter Anderson & Corroon LLP on 5/7/2013

In this opinion, the Court of Chancery denied a motion to dismiss a derivative action brought by a stockholder of Fuqi International, Inc. because the plaintiff pled facts that raised a reasonable doubt that the Fuqi board...more

Delaware Court Opens the Door to Private Dilution Claims Against Venture Capital Firms

by King & Spalding on 5/6/2013

The Delaware Court of Chancery’s recent opinion in Carsanaro v. Bloodhound Technologies is a wake-up call to venture capital firms. In a nearly 40 page opinion, Vice Chancellor Laster held that VCs are not necessarily immune...more

Pennsylvania Court Dismisses Shareholder Derivative Action Against Directors of H.J. Heinz Under Cuker v. Mikalauskas and the...

by Michael Kichline, Peter Kreher, William McEnroe | Dechert LLP on 5/2/2013

The Honorable Christine Ward of the Allegheny County Court of Common Pleas in Pittsburgh dismissed a consolidated shareholder derivative suit against the Board of Directors of H.J. Heinz Co. (“Heinz”) following a...more

News Of The (Shareholder Derivative) World: Record-High $139 Million Settlement In News Corp. Phone Hacking Suit

by Kevin Askew, James Grohsgal, Robert Varian | Orrick - Securities Litigation and Regulatory... on 5/1/2013

Putting an end to shareholder derivative litigation arising from News Corp.’s phone-hacking scandal, the company’s directors agreed last week to a record-breaking $139 million cash settlement. According to the plaintiffs’...more

New York District Court Limits the Applicability of the PSLRA's Safe Harbor

by Alissa M. Del Riego | Holland & Knight LLP on 5/1/2013

A U.S. District Court for the Southern District of New York recently found that a company that had provided lower earnings guidance in its statements to the public than its results from the previous year was not protected by...more

Shareholder Derivative Litigation: Keeping an Eye on the Parallel Class Action

by Donald Corbett, Daniel Roque | Lowenstein Sandler LLP on 4/26/2013

I. Introduction - Shareholder derivative actions rarely proceed in isolation. Typically, other related actions are pending simultaneously, including a parallel securities class action arising out of the same set of...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Executive Compensation and Benefits Alert: Skadden’s 2013 Proxy Watch: Emerging Say-on-Pay Trends and Litigation Developments"

by Michael R. Bergmann, Kristin M. Davis, Berit R. Freeman, Neil M. Leff, Barbara R. Mirza, Alessandra K. Murata, Timothy Nelson, Regina Olshan, David C. Olstein, Erica Schohn, more +Joseph M. Yaffe | Skadden, Arps, Slate, Meagher & Flom LLP on 4/26/2013

Early Lessons From the 2013 Proxy Season - As Skadden monitors the initial weeks of the 2013 proxy season, we are seeing the following preliminary trends: Vote Results - Of the first 279 companies of the...more

M&A Deal Counsel’s Role In Creating A Winning Written Record For Defending Breach Of Fiduciary Duty Litigation

by Ryan Costa, Pamela Millard, Michael Pittinger, Jacqueline Rogers, Janine Salomone | Potter Anderson & Corroon LLP on 4/22/2013

While M&A transactions give rise to many different types of litigation, including disputes between the merger parties and statutory appraisal actions, the most common type of litigation stemming from public company mergers is...more

Don’t Lie About Assets Under Management

by David Jenson | Leonard, Street and Deinard - Dodd-Frank and... on 4/19/2013

Umesh Tandon, president, chief compliance officer, and sole owner of Simran Capital Management, recently agreed to a settlement with the SEC relating to alleged violations of the Investment Advisers Act of 1940 and the...more

Delaware Supreme Court in Pyott Reverses Chancery Court Ruling That Collateral Estoppel Does Not Apply in Certain Shareholder...

by Ashley Burden, Mayer Grashin, Joni Jacobsen, David Kistenbroker, Angela Liu, Carl Volz | Dechert LLP on 4/17/2013

The Delaware Supreme Court in Pyott v. Louisiana Municipal Police Employees’ Retirement System reversed on April 4 a controversial ruling by the Chancery Court that a California federal court’s dismissal with prejudice of a...more

Alberta Securities Commission Decision Highlights the Importance of Context in Assessing Materiality

by Sandeep Joshi, Tara Kyluik, Tristram Mallett | Osler, Hoskin & Harcourt LLP on 4/16/2013

A recent decision of the Alberta Securities Commission addresses allegations of insider trading (and in the case of one respondent, tipping) against several senior officers of a public company and a spouse of an executive. In...more

Securities Class Actions Increasingly Target The C-Suite

by Kathleen Wailes | LEVICK on 4/16/2013

According to a recently-published PricewaterhouseCoopers report, corporate executives are being named in an alarmingly high percentage of securities class action filings. In 2012, 94 percent of such filings explicitly named...more

In The SDNY, Hindsight Is No Substitute For Red Flags When Alleging Scienter

by George E. Greer, Christine Louie, Danielle Van Wert | Orrick - Securities Litigation and Regulatory... on 4/16/2013

On April 8, 2013, Judge Shira A. Scheindlin of the Southern District of New York granted auditor Deloitte Touche Tohmatsu CPA’s (“DTTC”) motion to dismiss a shareholder class action, finding that plaintiffs failed to...more

Delaware Supreme Court’s Decision in Allergan Won’t Fix the Problem of Multi-Jurisdictional Shareholder Litigation

by Douglas W. Greene | Lane Powell PC - Securities / D&O Discourse on 4/11/2013

On April 4, 2013, in the Allergan decision, the Delaware Supreme Court reversed the Court of Chancery’s ruling last year that the dismissal of a shareholder derivative action in California did not preclude other stockholders...more

Attacks on Proxy Statement Compensation Disclosure

by Lawrence D. Levin | Katten Muchin Rosenman LLP on 4/11/2013

Litigation challenging equity compensation exploded in 2012 and shows no signs of slowing, with a storm of lawsuits targeting Rule 10b5-1 trading plans threatening to strike for 2013 as well...more

The Ropes Recap: Mergers & Acquisitions Law News

In this issue: *News from the Courts - Refinement re “Don’t Ask, Don’t Waive” Standstill Agreements - Proposed Delaware “Medium-Form Merger” To Create an Alternative to Top-Up Options - Court Rejects...more

Liability of Directors in Canada – An Excerpt

by Ellyn Law LLP on 4/10/2013

This article is an excerpt of the Canada Chapter of International Liability of Corporate Directors, 2nd edition, published by Juris Publishing in February 2013. This excerpt excludes numerous aspects of the full chapter,...more

Court Dismisses Another Say-On-Pay Disclosure Case

by Jill Radloff | Leonard, Street and Deinard - Dodd-Frank and... on 4/9/2013

The District Court for the Northeastern District of Illinois recently granted a Rule 12(b)(6) motion to dismiss an action styled Noble v. AAR Corp. The plaintiff alleged that the company failed to provide adequate...more

Delaware Supreme Court Says No To Botox And No To Multi-Forum Litigation: Court Dismisses Derivative Suit Against Botox-Maker...

by Kristen Bartlett, Lily Becker, Matthew Craner | Orrick - Securities Litigation and Regulatory... on 4/9/2013

In a recent decision, the Delaware Supreme Court reversed the Court of Chancery in Pyott, et al. v. Louisiana Mun. Police Emp. Ret. Sys., et al., holding that a derivative suit against Botox-maker Allergan, Inc. should be...more

“Plan B” for Rule 10b5-1 Plans?

by Lulu Chiu, Jim Scheinkman | Snell & Wilmer L.L.P. on 4/5/2013

Companies and their executives who utilize “Rule 10b5-1 Plans” to reduce the risks from insider trading claims when trading in company securities should evaluate plan use given recent increased scrutiny by the media and...more

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Business Organization › Securities Law › Business Torts