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A federal district court in Missouri recently enjoined Missouri Securities Division rules that require financial firms and professionals to obtain clients’ signatures on state-prescribed documents before providing advice that “incorporates a social or nonfinancial objective.”  The permanent injunction issued in Securities Industry and Financial Markets Association v. Ashcroft, No. 23-cv-4154 (W.D. Mo. Aug. 14, 2024), vindicates a noteworthy response from the securities industry to the anti-ESG backlash that has emerged in some states in the past few years and has politicized investment decisionmaking.

The Second Circuit yesterday affirmed the insider trading conviction of the principal of a potential acquiror who, in breach of a nondisclosure agreement with a potential target company, had provided a tippee with nonpublic information about an impending acquisition of the target. The decision in United States v. Chow held that:

  • The nondisclosure agreement (“NDA”) between the transaction parties created a duty to keep information about the potential transaction confidential and not to use it for any purpose other than the transaction;
  • The defendant tipper violated that agreement by providing information to the tippee, who purchased significant amounts of the target’s shares before the transaction was announced;
  • The evidence supported the jury’s finding that the tipper had intentionally provided material, nonpublic information (“MNPI”) to the tippee; and
  • The tipper had received a sufficient personal benefit in exchange for providing MNPI.

In 2020, trillions of dollars flooded ESG funds, and many analysts are expecting this trend to continue in 2021. BlackRock, the largest asset manager in the world, plans to have $1.2 trillion in ESG assets in the next 10 years, and an estimated one-third of all U.S. assets under management are already sustainably invested.  Given the importance of ESG to the securities markets, we herein present an elementary primer, explaining ESG issues and how they are affecting companies and their public disclosures—your ABC’s of ESG, so to speak.

As U.S. law has become less willing to entertain certain types of lawsuits on behalf of worldwide classes of plaintiffs, litigants have looked for other forums that might allow the prosecution – or at least the resolution – of claims on a global, classwide basis, ideally through opt-out classes. The Netherlands has emerged as an option in recent years because the Dutch Act on Collective Settlement of Mass Claims (the “WCAM”) authorizes the settlement, but not the prosecution, of classwide claims on an opt-out basis.

Much ink has been spilled since the Supreme Court’s 2010 decision in Morrison v. National Australia Bank about the federal securities laws’ applicability to foreign transactions in foreign securities.  But what happens when non-U.S. residents sue in the United States under foreign law based on U.S. securities transactions?

An apparently frustrated Delaware Vice Chancellor recently approved yet another disclosure-only settlement of yet another challenge to a merger, but seemed intent on signaling that such proposed class-action settlements might not fare so well in the future.  Vice Chancellor Glasscock’s September 17, 2015 decision in In re Riverbed Technology, Inc. Stockholders Litigation (Del. Ch. Ct.) repeatedly stressed that, while certain factors mildly favored approval of the proposed settlement, the weight of those factors would “be diminished or eliminated going forward in light of this Memorandum Opinion and other decisions of this Court.”