FRT’s Fast Five: Week Ending April 10, 2020

FRT Marketing
April 10, 2020

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. Zoom Sued for Fraud Over Privacy, Security Flaws

Zoom Video Communications Inc. was accused by a shareholder of hiding flaws in its video-conferencing app, part of a growing backlash against security loopholes that were laid bare after an explosion in worldwide usage. In a complaint filed Tuesday in San Francisco federal court, the company and its top officers were accused of concealing the truth about shortcomings in the app’s software encryption, including its alleged vulnerability to hackers, as well as the unauthorized disclosure of personal information to third parties including Facebook Inc. Investor Michael Drieu, who filed the suit as a class action, claims a series of public revelations about the app’s deficiencies starting last year have dented Zoom’s stock price — though the shares are still up 67% this year as investors bet that the teleconferencing company would be one of the rare winners from the coronavirus pandemic. Click here to read the full article.

2. Directors Seek Safe Harbour on Duties and Disclosure (Australia)

AMP chairman David Murray and Wesfarmers chairman Michael Chaney are leading a coalition of heavy-hitting directors pushing for a temporary and targeted safe harbour against regulatory lawsuits and class actions. The Australian Institute of Company Directors has written to Treasurer Josh Frydenberg, urging an emergency amendment to the Corporations Act for directors in relation to earnings guidance and forward-looking statements. The Morrison government has already announced a moratorium on insolvent trading laws but boards are concerned that offering any guidance or updating the market amid the market volatility exposes them to later legal action. AMP’s board, chaired by David Murray wants protections for directors. However, the push is expected to be controversial given boards have long sought greater protections on directors’ duties and disclosure which have been fiercely opposed by investor and governance groups. Click here to read the full article (subscription may be needed).

3. Insurers Braced for Claims From Covid-19 Legal Action

Insurers are bracing themselves for billions of dollars of claims because of legal action over the coronavirus pandemic. Industry experts say that shareholders and creditors in the US and other countries will soon start suing company managers over the way they have handled the crisis, and that insurance policies will bear much of the brunt. “There would be very significant losses that could be claimed,” said Beth Thurston from insurance broker Marsh. “Class action lawsuits have resulted in [claims] of tens, if not hundreds, of millions of dollars in the past.” Click here to read the full article (subscription may be needed).

4. Economic Considerations in “Foreign Issuer” Securities Cases

Circuit courts have taken differing views on applying the second prong of Morrison: what type of “domestic transactions” are suitable for adjudication under the Exchange Act, and what limitations (if any) apply to this second prong? On June 24, 2019, the Supreme Court declined to explicitly address this issue by denying the petition for certiorari in Stoyas v. Toshiba Corporation, a U.S. securities class action related to an alleged accounting scandal. This has created a situation where even foreign companies that played no active role in fostering the trading of their securities in the United States may face class action suits under the Exchange Act that survive motions to dismiss. Given the potential increased exposure for foreign issuers in light of Toshiba, this article provides a brief background on how securities issued by foreign companies can be transacted domestically, and then highlights some specific considerations and challenges raised in “foreign issuer” cases that can be addressed via economic analysis in securities litigation. Click here to read the full article.

5. Fiduciary Duties and Board Options in a Time of Pandemic

The rapid spread of COVID-19, increasingly stringent government orders in response, and the profound effects on the global economy have raised concerns among corporate directors about how to adequately discharge their fiduciary duties. First and foremost, directors can rest assured that the flexibility and protections afforded to them by the business judgment rule remain as vital today as they did before the COVID-19 pandemic. The COVID-19 pandemic does not alter the business judgment deference afforded to decisions made by a well-informed and non-conflicted board that acts in good faith towards what is best for the corporation and its stockholders. This note is a tool for directors to help them identify some of the issues they should consider to ensure that their decisions are protected by the business judgment rule as they guide their companies during these challenging times. Click here to read the full article.

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About FRT

SETTLED CLAIMS  I  PASSIVE GROUP  I  ANTITRUST  I  FUTURE CLAIMS  I  OPT-IN MONITORING  I OPT-OUT MONITORING

Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability, and transparency available. For more information, go to www.frtservices.com.

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and do not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.

ABOUT FINANCIAL RECOVERY TECHNOLOGIES
SETTLED  I  NON-US GLOBAL OPT-IN  I  ANTITRUST  I  GLOBAL PASSIVE  I  DIRECT OPT-OUT  I  BUYOUTS

Founded in 2008, Financial Recovery Technologies (FRT) is a leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability and transparency available. For more information, go to www.frtservices.com.

 

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and does not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.