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Delaware Supreme Court Holds That Boards Must Satisfy the MFW Framework in Controller Transactions to Obtain Business Judgment...

In 2014, the Delaware Supreme Court held in Kahn v. M&F Worldwide Corp. (“MFW”) that a court will apply the entire fairness standard of review to freeze-out merger transactions between a controlled corporation and its...more

Delaware Court of Chancery Rescinds Elon Musk’s $55.8 Billion Compensation Package in Cautionary Tale About Director Independence...

On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more

2022 Year in Review: Securities Litigation Against Life Sciences Companies

We are proud to present our seventh annual Securities Litigation Year in Review publication, in which we analyze data for securities class actions filed nationally against publicly traded pharmaceutical, biotechnology,...more

Delaware Court of Chancery Finds for the First Time That Officers’ Fiduciary Duties Include Caremark Duty of Oversight, and That...

On January 25, 2023, in In re McDonald’s Corporation Stockholder Derivative Litigation, Vice Chancellor Travis Laster of Delaware’s Court of Chancery denied a motion to dismiss a derivative lawsuit against David Fairhurst,...more

SEC Adopts Amendments to Rules Governing Rule 10b5-1 Trading Plans

On December 14, 2022, the Securities and Exchange Commission unanimously adopted final rules relating to Rule 10b5-1 plans. Properly structured, a Rule 10b5-1 plan provides an affirmative defense to Rule 10b-5 liability for...more

SEC Enforcement Against Cheetah Mobile Execs Reflects Heightened Scrutiny of 10b5-1 Plans

​​​​​​​On September 21, 2022, the U.S. Securities and Exchange Commission (“SEC”) charged the CEO, Sheng Fu, and former president, Ming Xu, of Chinese-based technology company Cheetah Mobile Inc. (“Cheetah Mobile” or the...more

2021 Year in Review: Securities Litigation Against Life Sciences Companies

Summary of 2021 Trends, Themes, and Takeaways - We are proud to present our sixth annual Securities Litigation Year in Review publication, in which we analyze data for securities class actions filed nationally against...more

SEC Proposes Amendments to Rule 10b5-1 Trading Plans

On December 15, 2021, the U.S. Securities and Exchange Commission proposed amendments to Rule 10b5-1 trading plans, as SEC Chairman Gary Gensler first previewed in June in the wake of increased scrutiny of the plans. A Rule...more

United Food’s “New” Delaware Demand Futility Test: The More Things Change, the More They Stay the Same

On September 23, 2021, in United Food and Commercial Workers Union v. Zuckerberg et al., the Delaware Supreme Court restated and refined the demand futility test for bringing shareholder derivative claims when it affirmed the...more

Supreme Court To Decide Whether Automatic Discovery Stay Applies To Securities Act Cases In State Court

The U.S. Supreme Court has agreed to decide whether the automatic discovery stay established by the Private Securities Litigation Reform Act of 1995 applies to cases under the Securities Act of 1933 when they are brought in...more

SEC Chairman’s Comments Signal Likely Changes to Rule 10b5-1 Trading Plans

Rule 10b5-1 trading plans have faced increased scrutiny since the onset of the COVID-19 pandemic and the corresponding public focus on stock sales by executives of public life sciences companies. On June 7, 2021, SEC Chairman...more

SEC Signals Heightened Scrutiny Of Issuer/Analyst Communications And More Reg FD Enforcement

On March 5, 2021, the U.S. Securities and Exchange Commission filed an enforcement action in the U.S. District Court for the Southern District of New York charging AT&T with repeated violations of Section 13 of the Securities...more

ISS 2021 Policy Updates On Federal Forum And Exclusive State Law Forum Provisions, Board Diversity And Other Matters

Institutional Shareholder Services (“ISS”) published its proxy voting guidelines updates for 2021 (“Policy Updates”) on November 12, 2020. The changes that are likely to be of most interest to companies include new and...more

When Do M+A Discussions Constitute MNPI? Recent SEC Guidance May Shed Some Light

Last month, the SEC announced that a public company had agreed to pay a $20 million penalty to resolve charges related to its repurchase of stock while supposedly in possession of material, non-public information (“MNPI”)...more

Talking The Talk Versus Walking The Walk: Shareholder Suits Aim To Push Board Diversity And Punish Companies Supposedly Failing To...

A lot of attention has been paid to board diversity – or lack thereof – in recent months. California enacted AB-979, which expanded upon California’s earlier gender diversity law and requires boards to make strides in other...more

U.S. SEC Enforcement Co-Director Discusses Agency’s COVID-19-Related Enforcement Priorities, Highlights Formation of Coronavirus...

In a May 12, 2020 Keynote Address at the Securities Enforcement Forum West 2020, U.S. Securities and Exchange Commission (SEC) Co-Director of Enforcement Steven Peikin discussed the SEC’s COVID-19-related enforcement...more

U.S. SEC COVID-19 Statements Highlight the Importance of First Quarter Disclosures – A Review and Practical Guide

Recent statements by the Chair and the Directors of the Division of Corporation Finance and the Division of Enforcement of the U.S. Securities and Exchange Commission (SEC) highlight the challenges that companies face as they...more

The Impact of COVID-19 on Disclosure Obligations for Public Companies in the Life Sciences Industry

The ongoing global outbreak of the novel coronavirus (COVID-19) raises important considerations for life sciences companies subject to U.S. Securities and Exchange Commission (“SEC”) disclosure and reporting requirements. As...more

Important Reminders for U.S. Boards of Directors Navigating COVID-19

While COVID-19 will affect the operations of different companies in different ways, the boards of directors of every company should think critically about their oversight role in the context of this unprecedented global...more

Delaware Supreme Court Finds Federal Forum Provisions Facially Valid

On March 18, 2020, the Delaware Supreme Court issued a decision in Salzberg, et al. v. Sciabacucchi, No. 346, 2019 (Del. Sup. Ct. Mar. 18, 2020), upholding the validity of charter provisions or bylaws that require claims...more

Caremark Round II: Beware Red Flags in Drug Development

On October 1, 2019, the Delaware Court of Chancery applied the Delaware Supreme Court’s recent decision on Caremark board oversight claims in the context of operating in a highly regulated industry to allow derivative claims...more

Shareholder Suits Target Non-Employee Director Compensation at Public Companies

Recent shareholder suits show a heightened scrutiny of routine proxy disclosures in order to challenge non-employee director compensation. Plaintiffs’ attorneys are focusing on non-employee director compensation and...more

Court of Chancery Declares Federal Forum Provisions Invalid

The Delaware Court of Chancery issued a decision on Wednesday in Sciabacucchi v. Salzberg, et al., C.A. No. 2017-0931-JTL (Del. Ch. Dec. 19, 2018) declaring that federal forum selection provisions purporting to require claims...more

SEC Report Cautions Public Companies on Internal Controls and Cybersecurity Risks

The Securities and Exchange Commission (the Commission) has published a report of an investigation (the Report) into whether certain public companies that suffered financial losses as a result of cyber-related fraud violated...more

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