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Read Business Torts updates, news, and legal commentary from leading lawyers and law firms:

Court Overseeing the Valeant Securities Litigation Issues a Highly Anticipated Decision Ruling that Alleged Misstatements in Rule...

In an April 28, 2017 ruling on a motion to dismiss in the In re Valeant Pharmaceuticals International, Inc. Securities Litigation (the “Valeant Litigation”), the U.S. District Court for the District of New Jersey addressed an...more

First Circuit Affirms Dismissal of Securities Class Action Against Biogen Inc.

On May 12, 2017, the U.S. Court of Appeals for the First Circuit affirmed dismissal of the putative securities class action In re Biogen Inc. Securities Litigation, No. 16-1976. The action was filed in the U.S. District Court...more

Ninth Circuit Extends Omnicare to Section 10(b) Overturning Prior Falsity Standard for Opinion Statements

by Dechert LLP on

As popular targets for investor suits, officers and directors of public companies have another tool to defend against securities class actions, and specifically claims relating to the recording of goodwill. On May 5, 2017, in...more

Ninth Circuit Applies Omnicare Standard to Section 10(b) Claims, Tightens Pleading Standard for Securities Fraud

by Perkins Coie on

In City of Dearborn Heights Act 345 Police & Fire Retirement System v. Align Technology, Inc. (Dearborn), the Ninth Circuit established additional requirements for pleading securities fraud claims based on statements of...more

So, ISDA Counterparties Don’t Have to Deal in Good Faith, or Do They?

by Dechert LLP on

The implied contractual duty of good faith and fair dealing is well enshrined in the common law, including in New York and every jurisdiction in the U.S. Since, by its nature, however, the duty is not susceptible of precise...more

"Court of Chancery Provides Guidance on 'Credible Basis' Standard for Obtaining Books"

The Delaware Supreme Court has held that strict adherence to the procedural requirements of Section 220 of the Delaware General Corporation Law “protects the right of the corporation to receive and consider a demand in proper...more

"Delaware Supreme Court Examines Director Disinterestedness, Independence"

Delaware law provides important tools for directors to maintain control of derivative lawsuits.1 One such tool is the “demand requirement” embodied in Court of Chancery Rule 23.1, which requires that before a stockholder acts...more

Claims Against Investment Adviser in ERISA Fee Litigation Case Dismissed

A federal district court in North Carolina dismissed claims by BB&T Corp.’s 401(k) plan participants that Cardinal Investment Advisors, LLC, the plan’s outside investment advisor, breached its ERISA fiduciary duties by...more

Supreme Court to Consider Whether Non-Compliance with SEC Regulation Can Give Rise to Securities Fraud Liability

by Dechert LLP on

In Leidos, Inc. v. Indiana Public Retirement System, No. 16-581, the U.S. Supreme Court will resolve an important circuit split regarding securities fraud liability. Specifically, the Court will determine whether Item 303 of...more

Federal Court Denies “Fiduciary Exception” Challenge in Connection with Section 36(b) Excessive Fee Lawsuit

by Dechert LLP on

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

Chris Lazarini Analyzes Enforcement of Exculpatory Clauses

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini analyzed the court's enforcement of an exculpatory clause in the context of a Trading Advisory Agreement. Where parties elect to include exculpatory clauses in their contracts, such...more

District Court Dismisses Allegations That Stable Value Fund is Too Conservative

A district court in Rhode Island dismissed claims by participants in the CVS Employee Stock Ownership Plan that plan fiduciaries imprudently invested plan assets in the plan’s stable value fund...more

Another Reminder that Director Limits set forth in Equity Plans Allow Director Compensation to be Reviewed under the more Lenient...

Earlier this month, in In re Investors Bancorp, Inc. Stockholders Litigation, the Delaware Court of Chancery reiterated its view that placing a meaningful limit on director equity awards to be granted under a stockholder...more

Suing on Behalf of People You’re Suing Can Sink a Derivative Lawsuit — Especially If You Have a Litigious Nature

by Farrell Fritz, P.C. on

The U.S. reportedly has the world’s highest number of lawyers per capita (1 for every 300 people) and the 5th highest number of lawsuits per capita (74.5 for every 1,000 people, topped only by Germany, Sweden, Israel, and...more

Updated CHOICE Act Proposes to Impose Heightened Pleading Requirement and Raise Burden of Proof for Plaintiffs in Section 36(b)...

by Dechert LLP on

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

Sixth Circuit Dismisses ERISA Stock Drop Action Against Cliffs Natural Resources

The Sixth Circuit affirmed the dismissal of ERISA stock drop claims by participants in the Cliffs Natural Resources’ 401(k) Plan. The participants alleged fiduciary breach claims based on public and non-public information...more

Chris Lazarini Discusses Burden of Materiality under Section 11 and 12 of Securities Act

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini discussed the class action suit brought against Party City alleging the company failed to disclose material facts in SEC documents when it did not discuss the impact the decline in...more

Dueling Classes Dispute the Breadth of Released Claims in the Halliburton Securities Litigation

In the long-running Halliburton securities litigation, a dispute has arisen between two rival class proponents. While readers of this blog are no doubt familiar with The Erica P. John Fund, Inc. v. Halliburton Co. case and...more

Fraud and Fraudulent Conveyance Claims for $686 Million Allowed To Proceed Against Hedge Fund in Long-Running Dispute over Failed...

On March 13, 2017, Justice Marcy Friedman of the New York Commercial Division denied a motion for summary judgment seeking to dismiss claims of fraud, breach of the covenant of good faith and fair dealing, and fraudulent...more

We Know What You Really Meant: Utah Court Holds that SEC Can Bring Extraterritorial Enforcement Action Based on Conduct or Effects...

A federal court in Utah recently held that the Securities and Exchange Commission may bring an enforcement action based on allegedly foreign securities transactions involving non-U.S. residents if sufficient conduct occurred...more

Texas District Court Dismisses SOX Whistleblower Claim For Lack of Protected Activity

On March 21, 2017, the Northern District of Texas dismissed a former employee’s whistleblower retaliation claim on the ground that her allegations of fraud were too far removed from potentially harming the shareholders of a...more

Chris Lazarini Comments on Covenant of Good Faith and Fair Dealing

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini commented on a case in which the plaintiff claimed Merrill Lynch acted improperly in selling shares held as collateral for a loan when plaintiff had not defaulted on the loan. The...more

Important Decision by Massachusetts Supreme Court May Significantly Reduce Risk of Merger Litigation

The recent decision by the Massachusetts Supreme Court in Int'l Brotherhood of Electrical Workers Loc. No. 129 Benefit Fund v. Tucci has the potential to significantly reduce merger litigation for publicly traded companies...more

"Another Mutual Fund Adviser Prevails at Trial in Excessive Fee Litigation"

Following a four-day bench trial, Judge Renee Marie Bumb of the U.S. District Court for the District of New Jersey ruled in favor of an adviser on claims brought under Section 36(b) of the Investment Company Act by investors...more

Chris Lazarini Discusses Heightened Pleading Standard Under Rule 9(b)

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini discussed the heightened pleading standard for claims of fraud under Rule 9(b) in an auction rate securities case....more

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