Posts tagged as:

securities litigation

  • After bank trespass, Occupy Philadelphia benefits from jury nullification and a cordial judge [Kevin Funnell]
  • Cato commentaries on Cyprus crisis [Steve Hanke and more, Dan Mitchell, Richard Rahn podcast]
  • “NY Court Reinstates Foreclosure, Chides Judge For `Robosigning’ Sanctions” [Daniel Fisher] “Impeding Foreclosure Hurts Homeowners As Well As Lenders” [Funnell]
  • SEC charging Illinois with pension misrepresentation? Call it a stunt [Prof. Bainbridge]
  • “Plaintiff Lawyers Seek Their Cut On Virtually All Big Mergers, Study Shows” [Fisher] As mergers draw suits, D&O underwriting scrutiny escalates [Funnell] “Courts beginning to reject M&A strike suits” [Ted Frank]
  • Will Dodd-Frank conflict minerals rules actually help folks in places like Congo? [Marcia Narine, Regent U. L. Rev. via Bainbridge, earlier here]
  • “Securities Lawyers Gave To Detroit Mayor’s Slush Fund”; city served as plaintiff for Bernstein Litowitz [Fisher]

Never mind the (alleged by former employee) lurid sex stuff, says Daniel Fisher, let’s talk about this law firm’s shortcomings in filing securities actions [Forbes]

“I mean, frankly, I am totally puzzled, given that plaintiffs’ bar in this area uses the Wall Street Journal as their source of clients and cases, right? You guys read it every day, looking for scandal, right? Other people read People Magazine, but you read the Wall Street Journal.” – Judge Naomi Reice Buchwald (S.D.N.Y.), during a proceeding on the LIBOR class actions. [Staci Zaretsky, Above the Law] “And in other news, the Sun rose today.” [@LawyerKitty]

The Economist on an unplanned (at least one hopes it was unplanned) effect of Dodd-Frank:

THE Dodd-Frank law of 2010 requires a “say-on-pay” vote for shareholders of American companies. Clever lawyers scent a payday for themselves.

One law firm in particular, Faruqi & Faruqi, has filed a series of class-action suits demanding more information about how companies decide what to pay their senior executives. It seeks to prevent its targets from holding their annual meetings until the extra information turns up. One such suit, against Brocade Communications, a Californian company, forced the suspension of the annual meeting last February. Brocade quickly settled. Faruqi’s fees were $625,000. Several other companies, not wanting to delay their meetings, have settled similar suits.

Prof. Bainbridge is reminded of the specialized group of non-lawyers in Japan known as sokaiya, who extract money from target companies by threatening (among other things) to disrupt annual meetings.

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Banking and finance roundup

by Walter Olson on January 31, 2013

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Banking and finance roundup

by Walter Olson on January 14, 2013

  • But not before extracting $8.5 B: “Finding Little Evidence Of Foreclosure Fraud, Feds Give Up” [Daniel Fisher, Forbes; Kevin Funnell] Can Baltimore distinguish vindication from extortion? [Funnell]
  • Dear grandstanders in Congress and press: by law AIG’s board had to consider request to join bailout suit [Bainbridge, John Carney]
  • “Plaintiff Lawyers in Citigroup Case Seek Big Markup For Outside Attorneys” [Daniel Fisher, more, ABA Journal]
  • “Everyone knows” CRA (Community Reinvestment Act) lending was too small in volume to be a major factor in bubble. Is everyone right? [NBER paper, SSRN via Cowen, Tuccille]
  • Beware the CFPB’s Civil Investigative Demand (CID) power [Funnell, more]
  • “Investor class action system needs review – judge” [Nate Raymond, Reuters]
  • “Are the New Wave Say-on-Pay Lawsuits ‘Gaining Steam’?” [Kevin LaCroix]

Putting the 2010 bill to work:

Now, lawyers have found a new way to bring lawsuits over executive pay, resulting in a handful of legal settlements. But the settlements to date have produced no changes in executive compensation and no money for investors. In fact, the main financial beneficiary so far has been a small New York law firm that brought the bulk of the cases.

[Nate Raymond, Reuters; Prof. Bainbridge]

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Banking and finance roundup

by Walter Olson on November 14, 2012

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“The U.S. Chamber’s Institute for Legal Reform today released a study on merger-related litigation that concludes plaintiff lawyers take advantage of the court system to extract tens of millions of dollars a year in fees from companies at the expense of shareholders. A loophole in the federal law designed to cut down on securities class-action abuses allows lawyers to file suits challenging mergers in multiple state and federal courts, the study found, making it impossible for companies to consolidate the litigation in one place and increasing the odds they’ll pay the lawyers a fee to go away.” [Daniel Fisher, Forbes]

July 27 roundup

by Walter Olson on July 27, 2012

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The Economist on “Why American firms cannot do deals without being sued”:

In 2005, 39% of M&A deals were challenged by lawsuits, one study found. By 2011 a hefty 96% of acquisitions worth more than $500m were attracting suits…

J. Travis Laster of Delaware’s Chancery Court [has] become an outspoken public critic of “worthless”, “sue-on-every-deal” lawsuits. In March he told one group of plaintiffs’ lawyers: “I don’t think for a moment that 90%—or based on recent numbers, 95%—of deals are the result of a breach of fiduciary duty.”

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According to the Harvard Law School online catalog, the SRP is “a newly established clinical program” that “will provide students with the opportunity to obtain hands-on experience with shareholder rights work by assisting public pension funds in improving governance arrangements at publicly traded firms.”

Marty Lipton and others at Wachtell, Lipton don’t like the idea and criticize it here. More at NYT DealBook (via Bainbridge).

Reader J.B. emails to say:

Whatever one thinks of Wachtell’s substantive critique of the attack on classified/staggered boards, it’s kind of interesting for a law school to be promoting a “clinical program” in which the kids get to work for institutional investors with bajillions of dollars in assets (and, you know, the wherewithal to retain sophisticated counsel at market rates) rather than the sort of boring old indigent individuals that are the traditional law school clinic client base.

A different view: Max Kennerly.

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February 29 roundup

by Walter Olson on February 29, 2012

  • Jackpot justice and New Jersey pharmacies (with both a Whitney Houston and a Ted Frank angle) [Fox, PoL, our Jan. 3 post]
  • New Mexico: “Trial lawyers object to spaceport limits” [Las Cruces Bulletin]
  • Dodd-Frank: too big not to fail [The Economist] Robert Teitelman (The Deal) on new Stephen Bainbridge book Corporate Governance After the Financial Crisis [HuffPo] Securities suits: “trial lawyers probably won’t be able to defend a defective system forever” [WSJ Dealpolitik]
  • Uh-oh: U.K. Labour opposition looks at unleashing U.S.-style class actions [Guardian] “U.K. Moves ‘No Win, No Fee’ Litigation Reforms to 2013″ [Suzi Ring, Legal Week]
  • More on controls on cold medicines as anti-meth measure [Radley Balko, Megan McArdle, Xeni Jardin, earlier here, here, here]
  • Recognizable at a distance: “In Germany, a Limp Domestic Economy Stifled by Regulation” [NY Times]
  • Fewer lawyers in Congress these days [WSJ Law Blog]

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Merger announcements often trigger a spate of press releases announcing that securities plaintiff’s firms are “investigating” the situation. Even if the evidence of wrongdoing is absent and the financial analysis thin, lawsuits may be the next step, because that’s where the money is [David Nicklaus, St. Louis Post-Dispatch]

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February 8 roundup

by Walter Olson on February 8, 2012

  • Popular proposal to curb Congressional insider trading (“STOCK Act”) could have disturbing unintended consequences [John Berlau, CEI "Open Market"] A contrary view: Bainbridge.
  • Here’s Joe’s number, he’ll do a good job of suing us: “Some Maryland hospitals recommend lawyers to patients” [Baltimore Sun, Ron Miller]
  • Bribing the states to spend: follies of our fiscal federalism, and other themes from Michael Greve’s new book The Upside-Down Constitution [LLL, more, yet more] “Atlas Croaks, Supreme Court Shrugs” [Greve, Charleston Law Review; related, Ted Frank]
  • “… Daubert Relevancy is the Sentry That Guards Against the Tyranny of Experts” [David Oliver on new First Circuit opinion or scroll to Jan. 23]
  • Goodbye old political tweets, Eric Turkewitz is off to trial;
  • State laws squelch election speech, and political class shrugs (or secretly smiles) [George Will]
  • Too bad Carlyle Group got scared off promising experiment to revamp corporate governance to curb role of litigation [Ted Frank, Gordon Smith] AAJ should try harder to use people’s quotes in context [Bainbridge]

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February 6 roundup

by Walter Olson on February 6, 2012

  • “A 4-Page Playdate Waiver? Is This the New Normal?” [Lenore Skenazy, Free-Range Kids; our 2000 post on "Rise of the High-School Sleepover Disclaimer"]
  • Spirit Airlines sets what it calls DOTUC fee, for “Dept. of Transportation Unintended Consequences” [Stoll]
  • How fairly are fathers treated in family court? [Nina Shapiro, Seattle Weekly via Alkon]
  • “‘Insider’ Trading by the Representative Plaintiff in Shareholder Litigation” [Bainbridge]
  • “Donation controversy focuses attention on Madison County asbestos litigation” [St. Louis Post-Dispatch, Chamber-backed LNL]
  • Update: Appeals court reinstates Duluth doc’s defamation claims [DNT, earlier here, here, here; "bedside manner" criticism]
  • U.K.: “‘Psychic’ Sally Morgan Sues Critics for £150,000 After Refusing $1 Million to Prove Her Powers” [D.J. Grothe, HuffPo] “She’ll be calling witnesses such as ‘an uncle, or father, or a man… with a b in his first name’.” [@thegagthief]

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January 18 roundup

by Walter Olson on January 18, 2012

  • A federal fishing raid, the Pew Charitable Trusts and a biased Business Week account [Nils Stolpe on Gloucester, Mass. fisheries, via Stoll]
  • Intimidating the judiciary? “Group Opposing Citizens United Pushes ‘Occupy the Courts’ Protest” Jan. 20 [Debra Cassens Weiss, ABA Journal] Mob rallies at Michigan governor’s private home [Meegan Holland, MLive] “Occupy” forces Gingrich to cancel event [Daily Caller] Earlier here, here, here, etc.
  • “Paper Airplane? Late for School? Shouting Too Loud? You’re Under Arrest!” [Free-Range Kids, Texas]
  • Spielberg in “Raiders of the Lost Ark” paid homage to earlier movie sequences without sweating permissions. Oh, for those days [Joho] “Cultural gems that should be in the public domain today” [Atlantic Wire, Tabarrok]
  • UPS settlement exaggerates benefits to class members [Ted Frank; related, CCAF] “Federal Judges Have Harsh Words, Rulings for Class Action Plaintiffs’ Lawyers” [Lammi/WLF]
  • “Justice Breyer Calls Recusal Controversy a ‘Non-Issue’” [ABA Journal]
  • “Add Plaintiff-Lawyer Fees To The Cost Of Most Mergers” [Daniel Fisher, Forbes on Cornerstone Research report]

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Neither Stephen Bainbridge nor Larry Ribstein is particularly impressed by it.

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