The Delaware Court of Chancery yesterday denied a motion to dismiss a class action alleging that the directors and sponsor of a special-purpose acquisition company (a “SPAC”) breached their fiduciary duties by disloyally depriving the SPAC’s public stockholders of information material to their decision whether to redeem their stock before
A new study has found that diversity on corporate boards of directors leads to statistically significant increases in the representation of under-represented groups at the manager and staff level. The study – “Do Diverse Directors Influence DEI Outcomes?” by Wei Cai (Columbia Graduate School of Business), Aiyesha Dey (Harvard Business School), Jillian Grennan (Santa Clara University and UC-Berkeley), Joseph Pacelli (Harvard Business School), and Lin Qiu (Purdue University) – adds to the growing literature on board diversity and human capital management, two significant ESG considerations for many corporations and investors. While proponents of ESG sometimes focus on advancing each of those goals individually, the study links the two considerations and shows that one of them (board diversity) can promote at least some aspects of the other (diversity, equity, and inclusion in the workforce).
In response to Russian President Vladimir Putin’s decision to invade Ukraine in February, the U.S. government announced sweeping sanctions against Russia. As the conflict nears the three-month mark, businesses around the world are continuing to address compliance with these sanctions. To that end, the SEC recently issued guidance on how companies affected by the Russian invasion of Ukraine should disclose how the conflict is affecting their operations, including the impact of evolving sanctions.
The Securities and Exchange Commission’s Division of Examinations recently announced its examination priorities for fiscal year 2022: Private Funds; Environmental, Social, and Governance (“ESG”) Investing; Standards of Conduct; Information Security and Operational Resiliency; and Emerging Technologies and Crypto-Assets. The Division seeks to provide investors and registrants with transparency into these…
On Thursday, March 24th, the Securities and Exchange Commission announced an agenda for a March 30th open meeting for the Divisions on Corporate Finance and Investment Management. The meeting has only one agenda item: SPACs, shell companies, and projections.
In December 2021, SEC Chair Gary Gensler compared SPACs to traditional…
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 securities fraud class action against a major cruise operator six weeks earlier by the same court.
Like in the prior case against Norwegian, the Carnival court dismissed the suit upon finding the plaintiffs failed to plead the existence of any statements that were materially false or misleading, and failed to sufficiently allege scienter. In so doing, it applied traditional principles of federal securities laws to the anything-but-traditional circumstances created by the COVID-19 pandemic.
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 the plaintiff failed to plead actionable misstatements or omissions and scienter for a claim of securities fraud under Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder.
Thanks to the court’s thorough analysis, this decision serves as a useful overview to those wishing to cruise through the sea of corporate puffery, forward-looking statements, and scienter in the federal securities laws.
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…