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Class Actions

Shareholders Weigh Derivative Suits to Push Governance Change

Jaclyn Jaeger May 15, 2012

A shareholder derivative lawsuit brought this month by the California State Teachers Retirement System—its first ever—against Walmart is creating concern among companies that such suits could become a more common tool to push for governance changes. "The focus of this action, unprecedented in CalSTRS history, is corporate governance reform," said CalSTRS Chief Executive Officer Jack Ehnes.

How Individuals Can Win Non-Prosecution Agreements With the SEC

Jaclyn Jaeger April 10, 2012

The SEC announced a landmark non-prosecution agreement last month, declining to prosecute a person (rather than a corporation) after he provided significant assistance during an investigation. The agency also issued guidance on how to win such credit. But rather than give executives a pathway to their own personal NPA, the guidelines illustrate just how difficult it will be to earn such a pass. More details inside.

Delaware Court to Rule on Exclusive-Forum Bylaws

Jaclyn Jaeger February 22, 2012

Investor activists are waging a courtroom battle this spring against scores of companies that have adopted bylaws designating Delaware as the exclusive legal forum for deciding shareholder litigation. If the Delaware Chancery Court upholds such "forum bylaws," expect more companies to follow suit, says Steven Haas, a lawyer with law firm Hunton & Williams.

If the SEC Forces Companies to Admit Guilt ...

Jaclyn Jaeger February 14, 2012

The SEC has been under pressure for a while to change its policy of allowing defendants to settle charges without admitting guilt, and now a court could force its hand on the issue. A policy change would have dire consequences for companies, since it would set up a difficult decision to admit guilt or to fight lengthy court battles with the SEC. More details inside.

'Price Reduction Clauses' Raise False Claims Act Perils

Jaclyn Jaeger October 18, 2011

A $200 million False Claims Act settlement Oracle reached with the federal government is yet another reminder of compliance perils when selling complex products to Uncle Sam. At issue is the price-reduction clause, which requires contractors to offer the lowest price given to other comparable customers. In industries where pricing isn't always transparent, compliance is no easy task.

Supreme Court Decision Provides Legal Cover to Executives

Jaclyn Jaeger September 20, 2011

The Supreme Court ruled in June that a mutual fund investment adviser wasn't liable for false statements made by the fund itself. Now, several courts have extended the protections established in the Janus case to individuals. While the case may protect corporate officers in some situations, it doesn't protect them from liability related to deceptive conduct. More details inside.

Asbestos-Related Filings Decline

Jaclyn Jaeger August 11, 2011

Corporate litigation departments can breathe easier these days: The asbestos-related lawsuits that have flooded courts for years finally seem to be receding. That being said, plenty of businesses—especially insurers—still face long periods of liability and large reserves for future settlements. Details inside.

How Tyco Manages Third-Party Risk

Karen Kroll August 02, 2011

After settling allegations of violating the Foreign Corrupt Practices Act several years ago, Tyco decided to get a better grip on its third-party business partners. Building a system to monitor more than 32,000 relationships was no easy task, but the benefits go far beyond compliance: "It's dramatically changed the culture of the organization," says Matthew Tanzer, chief compliance counsel. An in-depth look is inside.

Supreme Court Splits Decisions on Two Securities Cases

Jaclyn Jaeger June 28, 2011

Corporate America and shareholder activists have split two recent decisions from the U.S. Supreme Court about class-action lawsuits. One ruling could clear the path for shareholders to bring class actions without first demonstrating causation of losses; the other could shield companies from lawsuits based on the actions of their affiliates. Details inside.

Supreme Court Strikes a Blow to Class-Action Lawsuits

Jaclyn Jaeger May 10, 2011

Good news for the legal department: The U.S. Supreme Court has ruled that companies can indeed force customers to settle disputes via arbitration rather than class-action lawsuits, and contracts saying so are valid. The decision could chill consumer class actions and complicate securities and employment class-action cases. Details inside.

Class-Action Settlements Down, but Not for Long

Jaclyn Jaeger March 22, 2011

The number of settlements of class-action securities cases declined to a 10-year low in 2010. But corporate counsels may have little to celebrate. The dollar figure of those settlements was on the rise, and attorneys say the decline in cases won't last. "We're going to see an uptick in settlements," predicts Brian Pastuszenski of Goodwin Procter.

Bruce Carton's 2009 Year in Review

Bruce Carton January 06, 2010

2009 was a year to forget for the Securities and Exchange Commission, Wall Street, the White House, law firms-everywhere, really. However, 2009 was truly the gift that kept on giving for those of us who write about SEC enforcement and securities litigation. Here is my look back at 2009, which...

Rakoff Order in BofA Case: Game-Changer?

Bruce Carton September 16, 2009

On Monday, Judge Jed Rakoff issued his order rejecting the proposed $33 million settlement of the SEC case against Bank of America. The order raises numerous issues for the SEC such as whether it must now amend its case to include individual defendants, and whether it will now take the...

Law Firm Memos From myCorporateResource.com

Bruce Carton August 19, 2009

I recently discovered a new website called "myCorporateResource.com." MCR combs the websites of the top 100 American law firms to find new Client Alerts, which it estimates number approximately 10,000 per year. MCR says that it then "aggregates, reviews, sorts and summarizes this content -for free- to give you a...

Enron... The Play

Bruce Carton August 10, 2009

I'm pretty much flabbergasted to learn that (a) someone saw fit to write a play about the Enron scandal, and (b) it is getting rave reviews!Via Enforcement Action's London bureau (actually, via the Twitter feed of Werner Kranenburg, of London), I learned today that "Enron" the play opened last month...

New Type of Madoff Defendant Emerges: Account Custodian

Bruce Carton April 03, 2009

A new type of defendant emerged in the Madoff fallout this week as customers of Fiserv Investment Support Services, a former unit of Fiserv Inc. (FISV), filed a class action lawsuit on Thursday against Fiserv trying to recoup their lost money. The case has reportedly been filed in federal court...

Liability for Accountants and Others in the Financial Crisis

Bruce Carton March 04, 2009

On February 24, 2009, Stuart Grant of Grant & Eisenhofer P.A. and Michael Young of Willkie Farr & Gallagher LLP discussed the subject of the potential liability of professionals in the financial crisis with Enforcement Action's Bruce Carton. The discussion was part of a webcast in which Grant and Young...

Court Again Allows Claims vs. Parmalat Auditors to Proceed

Bruce Carton February 27, 2009

One month ago, US District Judge Lewis Kaplan sent a shock wave through the auditing world by ruling that a securities class action could proceed against Deloitte & Touche Tohmatsu and Deloitte & Touche LLP for the actions of Deloitte & Touche SpA, which served as Parmalat's auditor in Italy....

Tomorrow's Webcast: Liability of Professionals in the Financial Crisis

Bruce Carton February 23, 2009

On Tuesday, February 24, 2009, at 2:00 pm EST, Enforcement Action's Bruce Carton will moderate a webcast entitled, "Liability of Professionals in the Financial Crisis" featuring two of the top lawyers in the securities litigation field. Stuart Grant of Grant & Eisenhofer P.A. and Michael Young of Willkie Farr &...

Australian Ports in a Storm

Bruce Carton November 14, 2008

While stocks of all types, shapes and sizes continue to get hammered week after week, two Australian companies are reporting surging earnings and bright prospects in the current economic crisis. What industry are these stocks in? The Australian securities class action industry.Last week, IMF (Australia) Ltd., the dominant class action...

Treasury: No Consensus on Limiting Auditor Liability

Bruce Carton October 17, 2008

On October 6, the U.S. Treasury Department's Advisory Committee on the Auditing Profession issued its Final Report. The report was the product of 12 months of work by the Committee, which was headed up by former SEC chairman Arthur Levitt and former SEC Chief Accountant Donald Nicolaisen, and consisted of...

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