FRT’s Fast Five: Week Ending December 25, 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. Australia’s Litigation Funding and Market Disclosure Rules Set for Overhaul
A government plan to give company directors a permanent reprieve on continuous disclosure obligations has been given a tick of approval by a parliamentary committee investigating litigation funders. The committee’s final report released on Monday was generally scathing of the litigation funding sector, which it accused of using the justice system for the primary motive of generating a return on investment. The committee made 31 recommendations to the government, including an overhaul of regulatory requirements introduced by Treasurer Josh Frydenberg in August, which were strongly opposed by litigation funders. It is understood the government will use the report’s recommendations as impetus for further legislative changes in the new year. Click here to read the full article.
Whether the cases involve issuers of securities or dealers and advisers in securities, experience demonstrates that trends in securities litigation are driven by the state of the economy, investment product innovation and related regulatory initiatives. These key drivers tell us that, in looking to 2021 and beyond, Canadian securities market participants can expect to be subject to claims influenced by the COVID-19 related market turmoil and securities regulators’ ongoing focus on enhanced disclosure and registrant conduct standards. Businesses that view current market conditions through the lens of past litigation and regulatory trends will be better equipped to calibrate their business practices accordingly—as well as respond to the next wave of securities litigation. Click here to read the full article.
In Wong v. Restoration Robotics, Inc., Case No. 18-CIV-02609 (Cal. Super. Ct. Sept. 1, 2020), the Superior Court of California for the County of San Mateo dismissed claims against an issuer and its directors and officers, asserted under the Securities Act of 1933, in favor of a federal forum-selection provision (FFP) in the issuer-defendant’s certificate of incorporation. This was the first state court case to opine on the enforceability of FFPs in the wake of the Delaware Supreme Court’s decision in Salzberg v. Sciabacucci (Blue Apron), and the U.S. Supreme Court’s decision in Cyan, Inc. v. Beaver Cty. Emps. Ret. Fund. Since the Restoration Robotics decision, two more California state courts have upheld the enforceability of FFPs, in In re Uber Technologies Securities Litigation and In re Dropbox, Inc. Securities Litigation. These three decisions together have significant implications for issuers, as well as for the D&O insurance industry. Click here to read the full article.
4. 9th Circ. OKs Dismissal of PayPal Investors’ Data Breach Suit
The Ninth Circuit affirmed a lower court’s dismissal Thursday of a proposed class action brought by PayPal investors alleging that the company concealed information and attempted to mislead shareholders concerning a 2017 data breach. In a three-page, unpublished opinion, a three-judge panel determined that PayPal’s initial announcement notifying the public of security vulnerabilities, rather than an actual security breach, was not purposefully misleading, since PayPal admitted that the issue was of enough concern to suspend operations of the subsidiary linked to the incident. Click here to read the full article (subscription may be required).
5. BSG Mining Billionaire Can’t Trim $1.85B Fraud Lawsuit
Two companies tied to an Israeli billionaire failed to beat back a former business partners’ $1.85 billion fraud lawsuit after a London judge refused Friday to pare down allegations related to a failed joint venture agreement in Africa. High Court Judge Andrew Baker rejected an application for summary judgment filed by Nysco Management Corp. and its subsidiary, Balda Foundation, seeking to trim claims filed by Brazilian mining company Vale SA over a mining project in Guinea. Arbitrators in London have already awarded Vale and a subsidiary $2.2 billion, and Judge Baker ruled Friday that nothing in their award or an underlying share purchase agreement precludes claims against Nysco and Balda. BSG Resources has yet to pay the arbitration award, and Vale has sued Steinmetz and several companies directly. As a part of the lawsuit, Vale and Vale International claim Nysco and Balda owe $370 million, a chunk of the $500 million transferred to BSGR for the mining rights. Click here to read the full article.
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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.
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