Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.

1. US Supreme Court Spurns Google Bid to Avoid Shareholder Lawsuit

The US Supreme Court on Monday declined to hear Alphabet Inc’s GOOGL.O attempt to nix a lawsuit by shareholders accusing the Google parent company of fraudulently concealing a security glitch that left private user data exposed. The justices left in place a lower court’s ruling that revived the lawsuit brought over the 2018 incident that the company was slow to disclose, turning away Alphabet’s appeal. The lawsuit, led by the state of Rhode Island, was filed after the Wall Street Journal published an article in October 2018 that said Google concealed the exposure of private data for nearly 500,000 users of Google+ because it feared regulatory scrutiny and reputational harm. The lawsuit accused the company of making false or misleading statements in violation of the U.S. Securities Exchange Act. Click here to read the full article.

2. Securities Class Actions in the COVID-19 Era: Multiple Waves and No Sign of Receding

The coronavirus pandemic has brought three largely distinct waves of securities fraud class action lawsuits. In the first wave, plaintiffs targeted industries whose products or services were directly involved in responding to the virus or industries that the virus immediately affected. In the second wave, plaintiffs sued similar types of companies as those in the first wave, however, plaintiffs appeared to broaden the scope of their allegations to include challenges to companies’ representations about how COVID-19 impacted projections of future economic performance. In the third and most recent wave—filed between Nov 2020 and Dec 2021—plaintiffs filed similar suits to those in the second wave but began targeting companies in a wider set of industries. In addition, toward the end of the third wave, plaintiffs began to expand the bases for their claims, challenging companies’ specific predictions about post-pandemic consumer behavior. Click here to read the full article.

3. Meta Painted Rosy Ad Effect of Apple Changes, Investors Say

Meta Platforms Inc. was not up front about the negative impact Apple’s privacy changes would have on its advertising business, causing the stock price to sink more than $85 per share last month, investors allege in a proposed class action filed Tuesday in California federal court. Meta and its executives said they had a plan to mitigate the effects of the 2021 iOS changes that allow users to limit who can track their data, but it wasn’t until Feb. 2, 2022, that investors learned there was a $10 billion impact on the company’s revenue, according to the complaint filed by Plumbers and Steamfitters Local 60 Pension Trust. Click here to read the full article (subscription may be required).

4. After 30 Years, Australian Class Action Regime Still Plagued With Uncertainty

Over the last 30 years, the Australian class action regimes have undoubtedly improved access to justice, helped to resolve disputes more efficiently, and reduced the costs of litigation, both for the parties and the courts. However, the procedure has also been open to abuse and, from time to time, uncertainties about procedural issues result in lengthy and costly interlocutory disputes. While the current spotlight on the role of litigation funding in Australia and, in turn, returns to group members is warranted, other aspects of the regimes (particularly involving multiple and competing class actions and “soft” class closure orders) are ripe for reform to ensure that the class action regimes provides certainty for all parties and that any unnecessary hurdles are removed to allow efficient settlement negotiations. Click here to read the full article.

5. SPACs: Significant Increase in US Shareholder Class Actions Causes Some Insurers to Restrict Coverage

According to leading international law firm RPC, a fourfold increase in US shareholder class action lawsuits relating to special purpose acquisition companies (SPACs) has caused some insurers to restrict coverage. The number of class actions relating to SPACs rose to 33 in 2021 – 22, up from just eight in 2020 – 21. RPC said the rise in class action lawsuits is partly due to shareholders feeling misled when companies underperform after going public. RPC said the rise in shareholder litigation, as well as recent increased regulatory scrutiny from the Securities and Exchange Commission, has resulted in some insurers of directors and officers withdrawing coverage for SPACs in the US. Click here to read the full article (subscription may be required).

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