SEC Changes Course, Concludes Mandatory Arbitration Provisions Do Not Conflict With Federal Securities Laws
The US Securities and Exchange Commission (SEC) recently changed its longstanding position disfavoring the inclusion of certain mandatory arbitration provisions in corporate certificates of incorporation or bylaws. As Chair Paul Atkins explained, the SEC’s September 17, 2025, policy statement “provides the Commission’s views on whether mandatory arbitration provisions are inconsistent […]
SEC Intensifies Oversight of Foreign Companies that Participate in U.S. Capital Markets
According to NERA, a leading consulting and expert firm, the share of foreign-based companies listed on U.S. stock exchanges has risen steadily in the last decade, from 17.4% in 2016 to 26.9% in 2025. As noted in our September 18 blog post, the U.S. Securities and Exchange Commission (SEC) recently […]
Ninth Circuit Deems Company’s ‘Snappy Slogan’ Inadequate Support for Securities Fraud in Light of Additional Disclosures
On August 20, 2025, the US Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of a securities fraud action in Sneed v. Talphera. With this published decision, Cooley secured a complete victory on behalf of its clients – including Talphera (formerly known as AcelRx Pharmaceuticals), a […]
SEC Creates Cross-Border Task Force to Combat Fraud
On September 5, 2025, the U.S. Securities and Exchange Commission (SEC) announced the formation of a Cross-Border Task Force that will “strengthen and enhance the Division of Enforcement’s efforts to identify and combat cross-border fraud harming U.S. investors.” According to the SEC, the task force will “focus initially on investigating […]
Securities Class Action Trends: AI and Biotech Cases Continue to Rise, Uptick in Alleged Losses and Average Settlement Values
Two leading consulting and expert firms – Cornerstone Research and NERA – recently issued their midyear reports on securities class actions. Both reports noted that the number of filings in H1 2025 remained steady, but identified other key changes in trends, including an increase in alleged losses and average settlement […]
Dissemination of One’s Own Misstatements Does Not Create Scheme Liability, Says New York Court
On July 16, 2025, the US District Court for the Eastern District of New York dismissed a scheme liability claim in an enforcement action brought by the US Securities and Exchange Commission (SEC) against a company’s former chief financial officer (CFO). The SEC alleged that the CFO engaged in “deceptive […]
California Supreme Court Saves Delaware Forum Selection Clauses in Corporate Certificates of Incorporation
On July 21, 2025, the California Supreme Court issued a significant decision clarifying that a forum selection clause in a company’s certificate of incorporation is not unenforceable simply because the selected forum (here, the Delaware Court of Chancery) does not provide the right to a jury trial. In EpicentRx, Inc. […]
Derivative Plaintiffs Cannot Obtain Discovery to Plead Demand Futility, According to Chancery Court
When a company experiences an adverse event, it and its directors and officers are often subject to multiple shareholder lawsuits and demands. These matters proceed on different timelines, creating scenarios in which discovery may have begun in one case while others remain in pre-discovery. As a result, plaintiffs in the […]
Deciding Issue of First Impression, Fourth Circuit Holds Short-Seller Report Could Not Support Loss Causation – in Significant Cooley Win
On April 8, 2025, the US Court of Appeals for the Fourth Circuit affirmed the US District Court for the District of Maryland’s dismissal of all claims in Defeo et al. v. IonQ, Inc. et al., a securities class action asserting violations of § 10(b) and Rule 10(b)(5), § 14(a) […]
In Rare Dismissal of Up-C Reorganization Case, Chancery Court Holds That Claim Is Derivative, Not Direct
On April 10, 2025, the Delaware Court of Chancery granted a motion to dismiss in a breach of fiduciary duty action arising from BGC’s conversion from an Up-C corporation to a traditional full C corporation. While multiple fiduciary duty cases involving Up-C reorganizations have been filed recently in the Delaware Court […]