News & Analysis as of

Caremark claim

Corporate Investigations and White Collar Defense - October 2017

Supreme Court to Hear Important Whistleblower Case - Why it matters: Must an employee “whistleblower” specifically provide information about alleged corporate misconduct to the Securities and Exchange Commission (SEC) in...more

Delaware Chancery Court Dismisses Caremark Claim For Failure To Adequately Allege That The Board Consciously Disregarded FCPA...

by Shearman & Sterling LLP on

On June 16, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery dismissed breach of fiduciary duty and other claims brought derivatively against the directors and former chief financial officer of...more

Compliance Program Oversight - The Board’s Overlooked Role

It’s long been axiomatic that an effective compliance program cannot exist without a strong ethics and compliance culture, which in turn requires the proper “tone from the top.” Yet, when most companies think “top,” they...more

Delaware Supreme Court Affirms Dismissal Of Caremark Action For Failure To Plead Bad Faith With Particularity

by Shearman & Sterling LLP on

On March 3, 2017, the Supreme Court of the State of Delaware affirmed the dismissal of “Caremark” claims for alleged bad-faith failure of oversight brought derivatively by a stockholder against the directors of Qualcomm, Inc....more

Yellow Flags Are Not Red Flags: Delaware Court of Chancery Rejects Caremark Claim in Reiter v. Fairbank

by Carlton Fields on

In October 2016, the Delaware Court of Chancery rejected a shareholder derivative lawsuit premised on an alleged lack of oversight by the directors of Capital One Financial Corp., Reiter v. Fairbank, C.A. No. 11693-CB, 2016...more

First Circuit Holds That, for Original Source Exception to the False Claims Act’s Public Disclosure Bar to Apply, Information...

by Ropes & Gray LLP on

On June 30, 2016, the First Circuit addressed the kinds of information that a relator must provide to qualify as an original source to avoid dismissal under the False Claims Act’s (“FCA”) public disclosure bar. In United...more

Court Of Chancery Explains Pleading Rules For A Caremark Claim

by Morris James LLP on

At first look, this decision seems to involve just another unsuccessful failure of oversight Caremark claim against directors. But it is worth reading because it outlines the various theories of a Caremark case and then...more

Corporate Law & Governance Update - September 2016

by McDermott Will & Emery on

The following developments from the past month offer guidance on corporate law and governance law as they may be applied to nonprofit health care organizations: BUSINESS ROUNDTABLE GOVERNANCE GUIDELINES - In an...more

Court Of Chancery Explains When Caremark Claim Exists Based On Illegal Conduct

by Morris James LLP on

This decision explains when a Caremark claim exists based on illegal corporate conduct. The “substantial likelihood” of liability that justifies excusing a pre-suit demand on the board must involve a knowing violation of the...more

Court Explains Rigorous 'Caremark' Pleading Requirements

by Morris James LLP on

A recent opinion containing the report and recommendation of the magistrate judge in the U.S. District Court for the District of Delaware, In re Chemed Shareholder Derivative Litigation, C.A. No. 13-1854-LPS-CJB (D.Del. Dec....more

District Court Explains Caremark Proof Requirements In Pleading

by Morris James LLP on

To meet the pleading requirements to state a Caremark claim it is necessary that you show either the board ignored signs of wrongdoing or at least took no steps to prevent such wrongdoing. This decision contains an excellent...more

New Guidance for Financial Institution Directors and Officers In Cybersecurity Preparedness

Earlier this summer, the Federal Financial Institutions Examination Council (FFIEC) released its highly anticipated Cybersecurity Assessment Tool (Assessment), which is designed to assist financial institutions in identifying...more

A Firewall for the Boardroom: Best Practices to Insulate Directors and Officers From Derivative Lawsuits and Related Regulatory...

by Carlton Fields on

Shortly after the massive 2013 Target data breach, shareholders filed four derivative lawsuits against the company’s directors and some of its officers (13 CARE 624, 3/20/15). The shareholders alleged that the defendants had...more

OIG Compliance Guidance for Health Care Governing Boards

by Thomas Fox on

On the front page of the Saturday New York Times (NYT) was an obituary for Edward Thomas, who joined the Houston Police Department (HPD) in 1948 and finally retired in 2011 at the age of 90. As reported in the article,...more

Delaware Dismisses Caremark Claim Against DuPont

The Delaware Court of Chancery recently dismissed a derivative action in Ironworkers District Council of Philadelphia & Vicinity Retirement & Pension Plan v. Andreotti et al. One of the many claims alleged was a Caremark...more

Breaches in the Boardroom: What Directors and Officers can do to Reduce the Risk of Personal Liability for Data Security Breaches

by Goodwin on

Corporate directors and officers may increasingly be targets of shareholder derivative lawsuits in the wake of the surge of regulatory actions and private litigation around data breaches,. While no individual directors and...more

District Court Confirms Caremark Applies to Audit Committee Oversight of Internal Controls

by Morgan Lewis on

The U.S. District Court for the Northern District of California recently granted a motion to dismiss a derivative action in which the plaintiff alleged that the directors of VeriFone Systems, Inc. breached fiduciary duties...more

Questioning The Caremark Standard

by Michael Volkov on

The Justice Department’s aggressive enforcement program has had a profound impact on corporate governance. As a consequence, the last there has been a significant change in emphasis in the C-Suite, among general counsel and...more

CVS Caremark Pays $4.25 Million to Settle False Claims Allegations

Earlier this month, Caremark Incorporated – a drug benefit management company operated by drug retail giant CVS Caremark Corporation –agreed to pay $4.25 million to settle allegations that it knowingly failed to reimburse...more

Delaware Chancery Court Dismisses Stockholder's Derivative Claim Because of Inadequate Representation for Failing to First Make a...

by Holland & Knight LLP on

On September 25, 2012, the Delaware Chancery Court dismissed, with prejudice, a named plaintiff's derivative claim because of inadequate representation. The dismissal applied to the named plaintiff's claim only — not to...more

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