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

Tag Archives: disclosures

Smooth Sailing: Another Securities Class Action Against a Cruise Line Dismissed

On May 27, 2021, the United States District Court for the Southern District of Florida dismissed a securities class action against Carnival Corp. (“Carnival”), which operates the world’s largest cruise company, relating to the company’s health and safety disclosures made prior to and as the COVID-19 pandemic spread.  This decision follows a dismissal of another … Continue Reading

Failure to Cruise Past the Pleading Requirements in the Norwegian Cruise Lines Securities Class Action

On April 10, 2021, the United States District Court for the Southern District of Florida dismissed a securities class action complaint against Norwegian Cruise Lines (“NCL”) relating to the company’s disclosures made as the coronavirus pandemic was starting to unfold in the United States. In Douglas v. Norwegian Cruise Lines, et al., the court found … Continue Reading

SEC Punts NASDAQ Diversity Decision

After receiving extensive outside pressure from a variety of sources, include Senate Republicans, the SEC announced last week that it is deferring its decision on whether to approve a Nasdaq proposal to require “diverse” members on companies’ boards. The SEC is also simultaneously awaiting the confirmation of its new Chairman, Gary Gensler, which is still … Continue Reading

Stumbling Through Securities Law Challenges for COVID-19 Vaccine Developers

As the world waits to overcome the COVID-19 pandemic, publicly traded pharmaceutical companies waging in that fight are facing the multifaceted challenge of developing COVID-19 responses, informing the public of their progress, and managing legal challenges related to their efforts. Enter AstraZeneca. AstraZeneca partnered with Oxford University to develop a COVID-19 vaccine in April 2020, … Continue Reading

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

Corporate Scienter Requires Link Between Employees with Knowledge and the Alleged Misstatements

The Court of Appeals for the Second Circuit held yesterday that a securities-fraud plaintiff cannot establish corporate scienter without pleading facts showing that employees who allegedly knew of underlying corporate misconduct had some connection to the corporation’s purportedly false or misleading public statements. The decision in Jackson v. Abernathy should prevent securities plaintiffs from establishing “collective” … Continue Reading

Fourth Circuit Upholds Disclosure of Government Subpoena as Evidence of Loss Causation

The Fourth Circuit ruled yesterday that a plaintiff can sufficiently plead loss causation to establish a securities-fraud claim based on an “amalgam” of two theories:  corrective disclosure, and materialization of a concealed risk.  In so holding, the court concluded in Singer v. Reali that the issuer’s disclosure of a government subpoena and an analyst’s report discussing that … Continue Reading

Second Circuit Reinforces Liability Standard in Securities Cases Based on Statements of Opinion

On March 4, 2016, the U.S. Court of Appeals for the Second Circuit reinforced the stringency of the new standard for liability in securities cases arising from allegedly misleading statements of opinion. Construing the Supreme Court’s 2015 Omnicare decision, the Second Circuit held in Gen. Partners Glenn Tongue v. Sanofi Pharmaceuticals, Inc. that a statement … Continue Reading

Regulatory And Litigation Hot Topics For Private Funds In 2016

Private investment funds are likely to face increased regulatory scrutiny and litigation risk in 2016, not only based on the Securities and Exchange Commission’s focus on the industry but also due to transparency and compliance initiatives of limited partners and other market developments. We have highlighted several areas that should be on the top of … Continue Reading

Private Equity Endures Heightened Public Scrutiny

The public scrutiny on private equity fund sponsors has continued to intensify this month, evidenced by at least three recent events. First, the government announced that it was probing performance figures at private equity funds: SEC Probing Private Equity Performance Figures. This focus on performance should not come as a surprise. Financial performance is what … Continue Reading

Supreme Court May Reject Argument that Opinion Statements Are Actionable Simply Because False

During oral arguments in Omnicare v. Laborers District Council last week, the Supreme Court appeared to signal a rejection of the Sixth Circuit Court of Appeals’ position that a sincerely held statement of opinion or belief may be actionable under the Securities Act of 1933 simply because it was incorrect. The case concerns statements such … Continue Reading

Don’t Get Burned by the “Sunshine:” Risk Factors for Venture Capital Firms in an Era of Increasing SEC Scrutiny

Originally published in the Venture Capital Review, 2014 edition.   Andrew J. Bowden, the Director of the SEC’s Office of Compliance Inspections and Examinations, gave a speech entitled “Spreading Sunshine in Private Equity” in May 2014. While sounding cheery, the “spreading sunshine” metaphor was an ironic evocation of Justice Brandeis’s famous statement that “sunlight is … Continue Reading
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