Corporate Defense and Disputes

Important developments in U.S. securities law, white collar criminal defense, regulatory enforcement and other emerging issues impacting financial services institutions, publicly traded companies and private investment funds

Category Archives: Class Settlement

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Cakes Gone Bad: The Cheesecake Factory Faces Securities Scrutiny

COVID-related securities claims continue to rattle the marketplace. On December 7, a leading plaintiffs firm announced an investigation on behalf of shareholders of The Cheesecake Factory Inc., just days after the SEC announced it was settling charges against the company for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations … Continue Reading

Supreme Court Prohibits Stacking of Successive Class Actions Beyond Limitations Period

The Supreme Court ruled today that judicially created principles that toll statutes of limitations for class members in timely filed class actions apply only to subsequently filed individual actions, not to follow-on class actions filed outside the limitations period. The decision in China Agritech, Inc. v. Resh (No. 17-432) thus eliminates the specter of a potentially … Continue Reading

Supreme Court Rules that State Courts can Adjudicate Class Actions Under the Securities Act of 1933

On March 20, 2018, the Supreme Court ruled that the 1998 amendments to the federal securities laws did not strip state courts of jurisdiction over class actions alleging violations of only the Securities Act of 1933. The Court further held that those amendments do not empower defendants to remove those federal-law cases from state to … Continue Reading

California Federal Court Holds that U.S. Securities Laws Apply to Sponsored, Unlisted ADRs

The U.S. District Court for the Northern District of California held on January 4, 2017 that the federal securities laws apply to U.S. transactions in sponsored, but unlisted, American Depositary Receipts (“ADRs”) for a foreign issuer’s shares. The decision in In re Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation adds to the … Continue Reading

Business Judgment Rule Dooms Home Depot Data Breach Shareholder Derivative Suit

Large-scale corporate data breaches have unfortunately become increasingly common events, posing a variety of challenges to the companies that suffer them. A few weeks ago, a district court in Georgia dismissed one of the first shareholder derivative actions that challenged the adequacy of a corporation’s data-breach prevention strategy. While that court held that the business judgment rule shielded the company’s actions, it remains to be seen whether that position … Continue Reading

Seventh Circuit Adopts Trulia Standard for Disclosure-Only Settlements

Last week, in an opinion authored by Judge Richard Posner, the U.S. Court of Appeals for the Seventh Circuit rejected a proposed class-action settlement arising from Walgreen Co.’s acquisition of the Swiss-based pharmacy company, Alliance Boots GmbH. In re Walgreen Co. Stockholder Litigation, No. 15-3799 (7th Circ. Aug. 10, 2016).  Judge Posner’s sharply-worded opinion endorsed … Continue Reading

NY Court Of Appeals Rejects No-Opt Out Class Action Settlement In Shareholder Litigation

In Jinnaras v. Alfant, decided on May 5, 2016, the New York Court of Appeals rejected a proposed settlement of a shareholder class action, where the proposed settlement would have deprived out-of-state class members of a “cognizable property interest” by failing to provide a mechanism for class members residing outside of New York to opt … Continue Reading
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