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Financial Services Quarterly Report - First Quarter 2016: Northstar Decision on Remand: U.S. District Court Holds SLUSA Precludes...

In a complete victory for Defendants, on February 23, 2016, a federal district court dismissed with prejudice the final remaining claims in Northstar Financial Advisors, Inc. v. Schwab Investments et. al., which had been...more

SEC Brings First Ever Charges Against Municipal Advisors

The SEC charged Kansas-based Central States Capital Markets, its CEO, and two employees for breaching their fiduciary duty by failing to disclose a conflict of interest to a municipal client. The case is the SEC’s first to...more

SEC Describes Recent Efforts to Combat Pyramid Schemes and Affinity Frauds

Over the past two years, the Securities and Exchange Commission (SEC) has stepped up enforcement actions against pyramid schemes and related affinity frauds. Last week, in a speech at the University of Illinois at Chicago,...more

Chancery Court Reaffirms There Is No Magic Number for "Control" Status

On February 29, 2016, the Delaware Court of Chancery denied a motion to dismiss fiduciary duty claims against certain current and former directors of Halt Medical and a 26% stockholder, American Capital, arising out of a...more

Delaware Court of Chancery to Increase Scrutiny of Disclosure Settlements

The Delaware Court of Chancery has made its strongest statement yet in the ongoing conversation about shareholder “disclosure settlements,” i.e., settlements in which the sole or primary consideration received by shareholders...more

Inside the Courts: An Update From Skadden Securities Litigators - February 2016 / Volume 8 / Issue 1

We are pleased to present Inside the Courts (Volume 8, Issue 1), Skadden’s securities litigation newsletter. This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between...more

Ritchie v. Rupe 2016 and the Limits of Fiduciary Duties Owed Between Shareholders in Closely Held Businesses

A recent Texas court of appeals decision bucks the prevailing view when it comes to fiduciary duties owed between shareholders in closely held companies. In Ritchie v. Rupe, the court reversed the jury’s determination that...more

U.S. Supreme Court Clarifies the Scope of ERISA Fiduciary Obligations in Recent Stock Drop Decision

In recent years, plaintiffs’ lawyers have brought numerous ERISA breach of fiduciary duty lawsuits against employers that offer employer stock funds in their 401(k) plans. These lawsuits are typically brought on behalf of...more

The Supreme Court Meant What It Said On Employer Stock Funds

On January 25, 2016, in Amgen, Inc. v. Harris, 2016 WL 280886, the Supreme Court sent a strong message to the lower courts, plaintiffs and ERISA fiduciaries that pleading standards for breach of fiduciary duty prudence claims...more

Be Careful What You Wish For – Dudenhoeffer May Do “More Harm Than Good” For ERISA “Stock Drop” Plaintiffs

In its June 2014 decision in Dudenhoeffer v. Fifth Third Bank, the U.S. Supreme Court unanimously declined to recognize a “presumption of prudence” that had favored retirement-plan fiduciaries faced with allegations of...more

Supreme Court Decides to Weigh In on Personal Benefit Test

Last week, the Supreme Court agreed to hear an appeal that may resolve ambiguities in the law of insider trading that have arisen in the wake of the Second Circuit’s opinion in United States v. Newman, 773 F.3d 438 (2d Cir....more

Court of Appeal overturns decision in Titan 2006-3 v Colliers in finding that valuer in CMBS structure was not negligent - Court...

In the last edition of Banking Disputes Quarterly, we reported that the Court of Appeal was due to consider the Commercial Court's ruling in Titan Europe 2006-3 plc v Colliers International UK plc [2015] EWCA Civ 1083. The...more

2015 Half-year in review M&A legal developments

We set out below a number of interesting English court decisions and market developments which have taken place and their impact on M&A transactions. This review looks at these developments and gives practical guidance on...more

Second Circuit Seeks Guidance from Delaware on Direct Shareholder Lawsuits for Holding Stock Based on Alleged Misstatements

May former stockholders who allege they were damaged by holding stock of a company, because of fraudulent and negligent misrepresentations about the company’s financial status, sue the company directly versus in a derivative...more

Shaev v. Adkerson, C.A. No. 10436-VCN (Del. Ch. Oct. 5, 2015) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery granted defendants’ motion to dismiss plaintiff’s claims that in granting one million restricted stock units, defendants, the board of directors of a corporation, violated its...more

Commerzbank AG Sues Four RMBS Trustees Alleging Violations of Duties to Investors

On December 23 and 24, Commerzbank AG filed four actions in the Southern District of New York against Deutsche Bank National Trust Company, HSBC Bank USA, N.A., Wells Fargo Bank, N.A., and the Bank of New York Mellon in their...more

The Year in Review: 2015 FINRA Enforcement Actions

Over the past several years, the Financial Industry Regulatory Authority (“FINRA”), the self-regulatory organization responsible for regulating every brokerage firm and broker doing business with the U.S. public, brought...more

Flawed Auctions and Buy-Side Conflicts: Financial Advisor Liability for Aiding and Abetting Breach of the Duty of Care in RBC...

On November 30, 2015, the Delaware Supreme Court affirmed a Court of Chancery decision holding a financial advisor liable for almost $76 million in damages for aiding and abetting corporate directors in breaches of fiduciary...more

California District Court Certifies Classes of Fixed Index Annuities Purchasers

The Southern District of California recently certified California and multistate classes of annuities purchasers in a case challenging the allegedly abusive design, execution, and pricing of fixed index annuities (FIA). The...more

Gatekeepers No More: Delaware Supreme Court Clarifies Scope of Potential Financial Advisor Liability In M&A Sales Transactions

On November 30, 2015, the Delaware Supreme Court issued a 107-page opinion affirming the Court of Chancery's post-trial decisions in In re Rural/Metro Corp. Stockholders Litigation. In the lower court, Vice Chancellor Laster...more

The Delaware Supreme Court Upholds $76 Million Judgment Against RBC for Rural/Metro Sale

Investment bankers seeking to profit as both adviser to the seller and financier to the buyer in corporate sales processes have faced increased scrutiny by Delaware courts over the last few years. In a highly-publicized 2011...more

SEC Settles Charges with Private Equity Firm and Four Executives for Failure to Disclose Conflicts of Interest

The SEC recently reached a settlement with New York-based private equity firm, Fenway Partners, LLC, and four executives related to charges that Fenway Partners and several of its executives (“Respondents”) failed to disclose...more

Delaware's One-Two Punch to M&A Litigation Disrupts the Cozy Status Quo of M&A Deal Settlements

Over the summer, Delaware in two separate and impactful decisions hit out at many, if not most, shareholder litigation suits challenging public company M&A suits. The result: uncertainty ahead. The customary rhythm in an...more

Justice Friedman Allows Breach of Fiduciary Duty Claim to Proceed Against Corporate Directors Under Delaware Law

In AP Services, LLP v. Lobell et. al, No. 651613/2012, 2015 NY Slip Op 31115(U) (N.Y. Sup. Ct. June 19, 2015) (argued Feb. 21, 2014), Justice Friedman, applying Delaware Law, denied a motion to dismiss plaintiff AP Services,...more

Aiding and Abetting Shareholder Oppression?

Earlier this summer, in Brown v. Pennington, No. 05-14-01349-CV, 2015 WL 3958618 (Tex. App., June 30, 2015), the Texas Court of Appeals dismissed a tort claim against a non-shareholder loan guarantor for lack of personal...more

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