Unanimous Supreme Court Decision Limits Scope of Direct Listing Lawsuits
The US Supreme Court unanimously ruled that a shareholder suing under Section 11 of the Securities Act of 1933 must demonstrate that their shares are traceable to the allegedly misleading registration statement – a holding that will limit the scope of lawsuits brought by investors who purchase shares from companies […]
Cornerstone Research Report Highlights Rise in SEC Accounting and Auditing Enforcement
According to a new report by Cornerstone Research (a leading consulting and expert testimony firm), the Securities and Exchange Commission initiated 55% more actions involving accounting and auditing enforcement in fiscal year 2022 than it did in FY 2021. The report examines recent trends in the SEC’s enforcement of accounting […]
Supreme Court Hears Oral Argument in Slack Direct Listing Case
The Supreme Court heard oral argument on Monday in Slack Technologies v. Pirani, which presents the question of whether shareholders in a direct listing have standing to sue under Sections 11 and 12 of the Securities Act of 1933. As we discussed in a previous post, the Ninth Circuit held […]
Fourth Circuit Issues Decisive Opinion Affirming Dismissal of Securities Class Action Against MacroGenics
Biotech companies are often faced with a dilemma – they need to raise capital to develop novel therapies, and in doing so, they often express honest optimism about interim and topline results from their drugs in development. But they cannot be reasonably expected to disclose all results or interpretations of […]
DOJ Issues Further Guidance, Warnings on Ephemeral Messaging Apps
At the March 2023 American Bar Association National Institute on White Collar Crime, senior Department of Justice officials offered their most expansive guidance yet about the dangers of using ephemeral messaging for company communications. Officials noted that when conducting an investigation, DOJ prosecutors will consider a company’s use of ephemeral and […]
Oklahoma Firefighters Pension & Retirement Systems v. Six Flags:
Fifth Circuit Opinion Reviving Securities Class Action Creates Tension with Other Circuits on Key Issues
Introduction On January 18, 2023, the Fifth Circuit unanimously reversed the Northern District of Texas’s dismissal of a securities class action contending that Six Flags and two of its executives misled investors by projecting impossible timelines for opening new theme parks in China, which were anticipated to be highly profitable. […]
Considering Texting About Work? Beware.
As the rise in remote work has led to an increased reliance on mobile devices to stay connected – with cellphones at our fingertips virtually 24/7 – the use of third-party messaging applications to communicate about work has become commonplace. From WhatsApp to Telegram, corporate executives, financial services professionals and […]
Buyer (and Seller) Beware: SEC Adopts Final Rules on 10b5-1 Trading Plans
The Securities and Exchange Commission has long focused on pursuing potential insider trading violations, and its recent enforcement efforts serve as a stark reminder that the Commission has made insider trading cases a priority. Consistent with these efforts, on December 14, 2022, the SEC unanimously voted at an open meeting […]
US Supreme Court to Hear Direct Listing Appeal
On December 13, 2022, the US Supreme Court granted Slack’s petition for a writ of certiorari, which urged the Court to review the Ninth Circuit’s ruling that shareholders in a direct listing have standing to sue under Sections 11 and 12 of the Securities Act of 1933. The Court’s opinion […]
The ‘State’ of Delaware
At the Berkeley Fall Forum on Corporate Governance in November 2022, Cooley partner Sarah Lightdale and University of California, Berkeley professor Stavros Gadinis co-moderated a panel with Chancellor Kathaleen St. J. McCormick and Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery, where they discussed notable developments in […]