All posts by Cooley

Early SEC Enforcement Trends from Chairman Gary Gensler’s First 100 Days

Gary Gensler was sworn in as chair of the Securities and Exchange Commission on April 17, 2021. Chairman Gensler has promised to strengthen transparency and accountability in the financial markets. Under Chairman Gensler, we expect the SEC’s Division of Enforcement – led by Gurbir Grewal, who began work at the agency on July 26 – […]

Can Hypothetical Risk Factors Be Misleading?

In In re Alphabet Securities Litigation, the State of Rhode Island, as lead plaintiff, filed a Rule10b-5 action against Google LLC, its holding company Alphabet, Inc., and certain executives, alleging that the defendants failed to timely disclose certain cybersecurity defects and vulnerabilities. The district court granted defendants’ motion to dismiss the […]

Have Your Cake, and Closing Too: Invoking Prevention Doctrine, Delaware Chancery Court Grants Seller’s Request for Specific Performance in COVID-Related M&A Dispute

Chancellor McCormick’s opinion in Snow Phipps Group, LLC, et al. v. KCake Acquisition, Inc., et al. (Del. Ch. April 30, 2021) is 125 pages long, but she helpfully digests the holding in a single sentence on page 3: “Chalking up a victory for deal certainty, this post-trial decision resolves all issues in […]

Why Event-driven Securities Litigation Has Become a Thing – and a Lucrative One Too

If Matt Levine has a mantra in his “Money Stuff” column on Bloomberg, it’s this: everything is securities fraud. “You know the basic idea,” he often says in his most acerbic voice, “A company does something bad, or something bad happens to it. Its stock price goes down, because of the […]

SPAC Enforcement Risks Increase with Enhanced SEC Scrutiny

What happened In a recent client alert, we discussed the dramatic rise in offerings of special purpose acquisition companies (SPACs) and some of the attendant litigation and enforcement risks. A raft of recent public statements and actions by Securities and Exchange Commission (SEC) staff reflect the agency’s enhanced scrutiny of these […]

SEC Brings Rare Charges in Alleged Regulation Fair Disclosure Violation

What happened The SEC recently brought charges against AT&T and three mid-level executives for selectively providing information to Wall Street analysts in alleged violation of Regulation Fair Disclosure (Reg FD). According to the complaint filed in the Southern District of New York, AT&T learned in March 2016 that a “steeper-than-expected” decline […]

SEC v. Ripple

On December 22, 2020, the Securities and Exchange Commission filed a complaint in the Southern District of New York (SDNY) against Ripple Labs, Inc., and Ripple executives Bradley Garlinghouse and Christian A. Larsen in their individual capacities.1 The complaint alleges that (i) the defendants engaged in unregistered sales of securities […]

SPAC Trend Gives Rise to Securities Enforcement and Litigation Risks

What is a SPAC Special purpose acquisition companies (SPACs) are on the rise. A SPAC is a publicly traded shell company with no underlying operating business that seeks to merge with a target operating company. According to Nasdaq, in 2015, SPACs made up approximately 12% of the IPO market, but by […]

New SEC Leadership to Focus on Enforcement

What happened President Joe Biden announced that he would nominate Gary Gensler to serve as the next chairman of the US Securities and Exchange Commission. Gensler formerly served as head of the Commodity Futures Trading Commission, where he developed a reputation as a tough regulator in the wake of the financial crisis. […]

Delaware Puts the Conduct of Business Covenant on Center Stage in COVID-Related M&A Dispute

In the months following the onset of the COVID-19 pandemic, a slew of parties filed lawsuits in US courts relating to M&A transactions that were signed prior to March 2020 and that buyers were seeking to terminate as a result of the pandemic. In these lawsuits, buyers commonly alleged one […]