Latest Developments and Enforcement Initiatives in Securities and Shareholder Litigation
2015 was a pivotal year in securities and shareholder litigation, with significant developments including the Supreme Court's ruling in Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund regarding liability for opinion statements and decisions from Delaware courts that spotlighted financial advisor liability, shaped appraisal claims and effectively foreclosed disclosure-only settlements. Companies and their counsel should take note of these changes to ensure that they are minimizing exposure to liability and prepared to strategically handle new litigation.
This LIVE Webcast examines cutting-edge issues in securities and shareholder litigation. A panel of thought leaders and practitioners organized by The Knowledge Group will review recent court rulings affecting securities and shareholder litigation practices and offer practical advice for approaches to defending these cases.
Key issues that will be covered in this course are:
- Securities Filing and Settlement Trends in 2016
- Omnicare’s Practical Implications
- Delaware Courts’ Rejection of Disclosure-Only Settlements
- Financial Advisor Liability
- Appraisal Litigation
- Recent Significant Securities Case Decisions
- Securities Filing and Settlement Trends in 2016 [Sarah M. Lightdale, Special Counsel, Cooley LLP]
- 2015 marked a sharp upswing in federal securities class action cases. So far in 2016, that trend is continuing. This is the result of a combination of factors, including increased activity against life science, newly-IPO’d and foreign companies, and more M&A litigation filed in federal court.
- Median and average settlement amounts in the first half of 2016 are up slightly from 2015, while the percentage of investor losses represented by settlements continues to decline.
- Disclosure-Only Settlements - Policing Trulia [Stephen D. Dargitz, Partner, Manion Gaynor & Manning LLP]
- The Delaware Court of Chancery has thus far shown a willingness to enforce Trulia’s policy against awarding substantial fees for makeweight disclosures of no real benefit to stockholders, declining to approve some settlements and awarding de minimis fees in some “mootness” applications. However, Trulia did not ban outright the practice of disclosure-only settlements, and disclosures deemed to be clearly material have provided adequate settlement consideration in certain other cases.
- Trulia’s effect on forum shopping remains to be seen.
- Omnicare’s Practical Implications [Sarah M. Lightdale, Special Counsel, Cooley LLP]
- In Omnicare, the Supreme Court held that a statement of opinion, even if believed by the speaker, may be actionable if the speaker “omits material facts about the issuer's inquiry into or knowledge concerning [the] statement of opinion ... if those facts conflict with what a reasonable investor would take from the statement itself.” Courts applying Omnicare, including the Second Circuit, have so far taken a fairly narrow view of this holding.
- Primacy of the Stockholder Vote [Stephen D. Dargitz, Partner, Manion Gaynor & Manning LLP]
- The pendulum in the Delaware Court of Chancery has continued to swing back toward deference to a fully informed stockholder vote.
- In the Kenneth Cole litigation, the New York Court of Appeals adopted the MFW standard for those transactions that satisfy the MFW conditions.
- In the recent Volcano opinion, Corwin was extended to stockholders’ acceptance of a tender offer in a two-step transaction.
- Advisor liability for aiding and abetting is limited by the cleansing effect of an uncoerced disinterested vote / tender offer.
- 2016 Amendments to the Delaware appraisal statute and recent case law [Stephen D. Dargitz, Partner, Manion Gaynor & Manning LLP]
- The Delaware Court of Chancery generally continues to strike a balance between providing a meaningful remedy to minority stockholders and discouraging deadweight litigation. However, the Court also has expressed a new openness to “tracing” whether shares to be appraised were voted in favor of a merger.
- Recent Significant Securities Case Decisions [Sarah M. Lightdale, Special Counsel, Cooley LLP]
- IBEW Local 98 v. Best Buy (April 12, 2016) – 8th Circuit applies Halliburton II to overturn class certification
- Merrill Lynch v. Manning (May 16, 2016) – Supreme Court holds that provision of exclusive federal jurisdiction in the Exchange Act does not generally extend to claims brought under state law
Who Should Attend:
- In-house Counsel
- White Collar Attorneys
- Securities Litigation Attorneys
- Corporate Attorneys
- Litigation Officers
- Corporate Executives
- Public and Private Companies
Sarah Lightdale is Special Counsel in Cooley's securities litigation practice. She has extensive experience in complex commercial disputes, with a particular focus on defending companies and directors and officers in shareholder litigation regarding mergers and acquisitions, securities class actions and derivative cases. She has represented public and private companies, investment banks, private equity and venture capital firms, boards of directors and individuals in a variety of actions in state and federal courts and arbitration. She also has substantial experience conducting internal investigations and defending clients in investigations by the US Securities and Exchange Commission.
Sarah Lightdale is Special Counsel in Cooley's securities litigation practice. She has extensive experience in complex commercial disputes, with a …
Stephen D. Dargitz is a partner with MG&M’s Commercial and Business Litigation group in Wilmington, Delaware. His practice includes complex commercial, corporate and securities disputes, with an emphasis on those relating to mergers and acquisitions.
Mr. Dargitz also frequently provides advice on issues of corporate governance arising under Delaware law, including the fiduciary obligations of directors and officers. In addition to being a co-author of Mergers & Acquisitions Deal Litigation Under Delaware Corporation Law (2012), he has served on the board of editors of Folk on the Delaware General Corporation Law (5th ed. 2007, 6th ed. 2013).
Stephen D. Dargitz is a partner with MG&M’s Commercial and Business Litigation group in Wilmington, Delaware. His practice includes complex …
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About Cooley LLP
Clients partner with Cooley on high-stakes litigation and transformative deals, as well as complex IP and regulatory matters where innovation meets the law. Cooley had the most active securities litigation defense practice in the US in 2015. Our litigators have defended hundreds of securities cases and derivative actions all across the country, hundreds of regulatory proceedings and internal investigations, and have taken, unlike most law firms, numerous cases to trial, where we prevailed on behalf of our clients. Cooley has 900 lawyers across 12 offices in the United States, China and Europe.
About Manion Gaynor & Manning LLP
Manion Gaynor & Manning LLP (MG&M) is a national law firm focused on Commercial and Business Litigation and Products Liability and Complex Tort Litigation, with fully integrated offices in Boston, Hattiesburg, Lake Charles, Los Angeles, New Orleans, Providence, San Francisco Walnut Creek, and Wilmington.
Our focus on providing strategic, responsive legal counsel in each of our core practices has made us the law firm of choice for clients facing high-stakes litigation. Clients value our guidance on sophisticated matters ranging from complex commercial and business disputes, toxic tort and products liability, intellectual property, real estate, employment, to white collar and regulatory matters. Our unwavering commitment to excellence is premised on the concept that there is an optimal resolution for every case—whether through voluntary dismissal, summary judgment, reasonable settlement or trial. We rapidly assess and efficiently achieve our clients’ desired outcome with a streamlined, efficient operating model and a thorough understanding of their specific industry and goals. We deliver practical insight on our clients’ most important matters and ensure a successful partnership through a culture of close collaboration.
Our firm and, therefore, our clients’ defense, are truly integrated. Across offices—across the country—we work as a unified team actively developing collective knowledge, and providing optimal service. MG&M leverages the unique experience and skills of our lawyers to their best and highest use, protecting and advancing the interests of our clients wherever they do business.