Publications
-
03.29.2012Supreme Court Rejects Ninth Circuit Rule on Tolling for Short-Swing Trading ClaimsUpdatesIn Credit Suisse Securities (USA) LLC v. Simmonds, No. 10-1261, ___ U.S. ___, 2012 WL 986812 (Mar. 26, 2012), the U.S. Supreme Court unanimously rejected the Ninth Circuit's 30-year-old rule that tolls the statute of limitations for short-swing profit claims under Section 16(b) of the Securities Exchange Act of 1934 until the insider discloses his transactions, typically in an SEC Form 4.
-
02.10.2009D&O Insurance in a Year of UncertaintyUpdatesWhile the downturn in the economy has adversely affected the sellers of directors’ and officers’ liability insurance – much as it has companies in all sectors of the economy – investing in D&O insurance is still a wise course of action. This Update offers nine suggestions for ensuring that a company’s directors and officers are adequately protected in this environment against potential liabilities that D&O insurance normally would pay.
-
02.2009Second Circuit Says No Cutback on Corporate Criminal Liability – Decision Underscores the Importance of Corporate Compliance ProgramsUpdatesIn a closely watched case, the Second Circuit Court of Appeals has refused to cut back on traditional standards for corporate criminal liability. The Association of Corporate Counsel, the U.S. Chamber of Commerce and other groups had asked the court to depart from a century of judicial precedent holding corporations broadly liable for criminal acts committed by employees. The groups argued that such broad vicarious criminal liability was counterproductive and asked the court to bar corporate criminal liability unless prosecutors could show that the corporation lacked an effective compliance program.
-
05.17.2007Supreme Court to Address Scheme Liability TheoryUpdatesThe U.S. Supreme Court recently agreed to determine whether a legal theory known as “scheme liability” can be used to sue for securities fraud entities that, until now, have largely been protected from liability.
-
02.05.2007Shareholder Inspection Demands Surge: Be ReadyUpdates
In 2006 a record number of unhappy shareholders fought in Delaware courts to enforce their demands to inspect corporations' books and records. What caused this dramatic increase? Delaware courts frequently chastised shareholders for failing to use this powerful fact-gathering tool before bringing derivative suits. Many states, including Washington and Delaware, also recently expanded shareholders' statutory inspection rights.
In this Update we highlight two recent Delaware cases, Polygon and Shamrock, that identify important defenses available to corporations responding to inspection demands, and provide practical advice.
-
01.05.2007Second Circuit Applies Stringent Standard for Class Certification in IPO LitigationUpdatesIn a decision with potentially far-reaching effects, the United States Court of Appeals for the Second Circuit recently toughened the standard for granting class certification under Rule 23 of the Federal Rules of Civil Procedure. In In re Initial Public Offering Securities Litigation, No. 05-3349-cv (Dec. 5, 2006), the court reversed an order granting class certification in six consolidated securities fraud actions brought by thousands of investors against major investment banks alleging that they had inflated market prices and received secret commissions when underwriting IPOs. This decision may affect all areas of law influenced by class actions, including employment, antitrust, consumer protection and product liability.
-
12.19.2006Department of Justice Revises Factors Affecting Decision to Indict CompaniesUpdatesThe Department of Justice recently announced that it will revise some controversial policies outlined in a document known as the Thompson Memorandum. The new policies will place procedural limits on attempts by the Department of Justice to require companies under investigation to waive the attorney-client privilege. The policies will also bar federal prosecutors from considering as a factor in charging decisions whether a company is advancing attorneys' fees to employees or other corporate agents. These widely anticipated changes respond to strong criticism of the Thompson Memorandum from many sources and are designed to preempt legislation introduced by Arlen Specter, the outgoing chair of the Senate Judiciary Committee.
-
07.28.2006Decision in Washington Derivative Case Highlights Benefits of Good Governance PracticesUpdatesIn a decision generally protective of directors and officers, a Seattle federal district court recently held that shareholders who seek to bring derivative claims under Washington law must meet requirements similar to those imposed under Delaware law. In re Cray, Inc., 431 F. Supp. 2d 1114 (W.D. Wash. 2006).
-
04.19.2006United States Supreme Court Closes Loophole for Filing Class Action Securities Fraud Lawsuits in State CourtUpdatesIn a significant decision favorable to defendants in securities fraud lawsuits, Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 126 S. Ct. 1503 (2006), the United States Supreme Court has unanimously decided to close a loophole that plaintiffs' lawyers have used to bring securities fraud lawsuits in state court. This loophole existed as a result of how some appellate courts had interpreted the language of the Securities Litigation Uniform Standards Act of 1998 (SLUSA).
-
01.19.2006In the Penalty Box or Skating By? New Guidelines Shape SEC EnforcementUpdatesIn recent years the SEC has dramatically increased the size of civil penalties it seeks from companies accused of violating the federal securities laws. Critics questioned the SEC's lack of standards for determining such penalties and argued that the SEC's approach simply heaped additional punishment on the very same shareholders who were victimized by the company's violations.
-
10.14.2005A Neer Miss for CFOs and CEOs — Federal Court Finds No Private Right of Action Under Sarbanes-Oxley Section 304UpdatesIn the first case to directly address the question, a federal district court has held that private parties have no right to enforce Section 304 of the Sarbanes-Oxley Act of 2002. Neer v. Pelino, No. 04-CV-04791-SD (E.D. Pa. Sept. 27, 2005). Instead, the court held that only the SEC can enforce Section 304.
-
09.13.2005Too Fine a Point? Court Dismisses SEC Regulation FD EnforcementUpdatesA judge in the U.S. District Court for the Southern District of New York recently dismissed the SEC's first Regulation FD enforcement action to be tested in federal courts. In dismissing the action against Siebel Systems and two of its officers, the Court took the SEC to task for its overly aggressive enforcement of Regulation FD.
-
08.26.2005Delaware Court — Disney Directors Breached "Aspirational Ideals" of Good Corporate Governance, but Not Their Fiduciary DutiesUpdatesIn early August 2005, the Delaware Court of Chancery issued its opinion after a widely publicized three-month trial in In re The Walt Disney Company Derivative Litigation, absolving Disney's directors of liability in connection with the 1995-1996 hiring and firing of former Disney president Michael Ovitz. Ovitz received a severance package of approximately $140 million after his unsuccessful 14-month tenure at Disney.
-
07.01.2005U.S. Supreme Court Reverses Criminal Conviction of Arthur Andersen in Enron ScandalUpdatesIn a unanimous decision, the U.S. Supreme Court recently reversed Arthur Andersen's criminal conviction for violating a federal witness tampering statute by encouraging its employees to shred Enron documents pursuant to a document retention policy. Arthur Andersen LLP v. United States, 125 S. Ct. 2129, 2005 WL 1262915 (U.S. May 31, 2005). In doing so, the Supreme Court avoided direct evaluation of the conduct that led to the accounting firm's conviction.
-
06.30.2005Delaware Court Rejects $2.9 million Settlement Agreement in Executive Compensation and Corporate Waste Case: in re The Fairchild Corporation Shareholder Derivative LitigationUpdatesThe Delaware Court of Chancery recently rejected as inadequate a proposed settlement in a derivative action brought against directors and officers of the Fairchild Corporation. This Update highlights the key issues in the Court's rejection and offers practical guidance.
-
04.22.2005Supreme Court Decision Should Help Discourage Abusive Securities Litigation Cases: Dura Pharmaceuticals Inc. v. Broudo Rejects Ninth Circuit's Position on Loss Causation for Securities Fraud ClaimsUpdatesThe pattern is familiar. A public company makes some positive announcements about a product. After some time passes, the company announces bad news about the product, leading to a decline in the stock price.
-
02.11.2005Board Self-Evaluations: Do the Benefits Outweigh the Potential Pitfalls?UpdatesNew York Stock Exchange listing standards require boards of listed companies to conduct self‑evaluations at least annually to determine whether the board and its committees are functioning effectively. Although Nasdaq Marketplace Rules are silent on board self‑evaluations, a growing number of companies are considering such evaluations as a matter of best practices.
-
01.19.2005Happy New Year? Recent Securities Litigation Settlements Highlight Increasing Risks to Corporate DirectorsUpdatesThe Sarbanes-Oxley Act and recent changes in Securities and Exchange Commission and stock exchange requirements have imposed ever greater responsibilities on corporate directors. As these additional responsibilities expose directors to increasing risks, companies have struggled to attract and retain qualified candidates to serve as independent directors.
-
09.08.2004Securities and Corporate Governance Litigation Group Update: Seventh Circuit Limits Safe Harbor for Forward-Looking StatementsUpdatesThe Private Securities Litigation Reform Act of 1995 established a safe harbor for forward-looking statements. A company cannot be liable for making a forward-looking statement if, among other factors, the statement "is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement."
-
07.22.2004Securities and Corporate Governance Litigation Group Update: Delaware Supreme Court Clarifies Distinction Between Derivative and Direct Stockholder ClaimsUpdatesIn recent years there has been an upsurge in the number of stockholder derivative lawsuits. This type of lawsuit differs fundamentally from a securities class action.
-
03.24.2004Securities and Corporate Governance Litigation Alert: Delaware Chancery Court Issues Ruling on Corporate Opportunity Doctrine In re eBay Inc. Shareholders LitigationUpdatesOn January 23, 2004, Chancellor Chandler of the Delaware Court of Chancery held that eBay directors may be liable for usurping a corporate opportunity. In this derivative action, eBay shareholders allege that certain of eBay's directors improperly received allocations of shares in hot IPOs being underwritten by Goldman Sachs in order to induce such eBay directors to steer business to Goldman Sachs.
-
02.17.2004Securities and Corporate Governance Litigation Alert: Court Rules That Insurance Carrier May Rescind D&O Insurance Policy After Securities LawsuitUpdatesThe stock market bubble and crash from 1998 to 2001 and the ongoing stream of corporate scandals like Enron, WorldCom and Tyco have put corporate governance under the microscope. The actions of business leaders are now at the lowest levels of trust and highest levels of scrutiny in recent memory.
Presentations
-
02.23.2015Liability of Corporate Officers and Directors From the Perspective of a Lawyer Who Defends ThemSpeaking EngagementsSeattle University / Seattle, WA
-
11.07.2014The Unwelcome Companion to a Merger or Acquisition Transaction: LitigationSpeaking Engagements
The Seminar Group
-
05.02.2014 - 05.03.201434th Annual Northwest Securities InstituteSpeaking Engagements
-
03.10.2014The Role of the Corporate Director: From the Perspective of Lawyers Who Defend ThemSpeaking EngagementsSeattle University / Seattle, WA
-
10.27.2010Accounting for LawyersSpeaking Engagements