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. Zuora Board, Benchmark Face Insider Sales Suit Over RevPro Deal

A Zuora Inc. investor sued its officers and directors in Delaware, claiming some of them—along with its backers at venture capital firm Benchmark—sold millions worth of stock when they knew its price was inflated by its scheme to hide problems integrating a software acquisition. “The company’s marketing was loaded with improper statements concerning the ability of Zuora’s suite of products to operate smoothly with each other,” but in fact it “was experiencing severe risks to its overall business,” the lawsuit says. Click here to read the full article.

2. Shareholders Fight Steinhoff Over Proposed Settlement

The Steinhoff group is being accused of favouring contractual claimants like Christo Wiese. The army of lawyers advising Steinhoff will have to do something more persuasive than to constantly remind the 90 claimants that they will all lose out if they can’t reach an agreement. They will have to address the suspicion that the proposed global settlement sees former chair Christo Wiese getting far more than his fair share. By one estimate, Wiese’s recovery rate is between eight and 15 times more than that of Steinhoff shareholders who bought in the market. The parties behind that estimate, who speak on behalf of at least 20% of Steinhoff’s shareholders, last week vowed to continue fighting the proposed settlement. Click here to read the full article.

3. SEC Opens Review of Corporate Climate Change Disclosures

The Securities and Exchange Commission on Wednesday said it would review how companies are disclosing the risks they face from climate change, as the agency looks to refresh its more than decade-old guidance on the issue. The regulator will evaluate and speak with companies about the extent to which they are complying with current climate disclosure guidance, first issued in 2010, and eventually update it to build “a more comprehensive framework that produces consistent, comparable, and reliable climate-related disclosures,” the SEC said. Click here to read the full article (subscription may be required).

4. When Domestic Securities Fall Outside Scope Of Federal Law

On Jan. 25, the U.S. Court of Appeals for the Second Circuit issued an opinion in Cavello Bay Reinsurance Ltd. v. Stein affirming the dismissal of a claim under Section 10(b) of the Exchange Act, holding that a private sale of restricted shares between two Bermudan companies was “so predominantly foreign” as to be impermissibly extraterritorial under the facts presented. The decision is notable because it provides additional guidance on the factors that are relevant to considering when a domestic transaction may be so predominantly foreign that it falls outside the scope of the federal securities laws under the U.S. Supreme Court’s 2010 decision in Morrison v. National Australia Bank Ltd. The decision underscores that, in an increasingly remote world, participants in securities transactions must pay careful attention to how their agreements are structured in considering whether their transactions may be subject to the liability provisions of the federal securities laws. Click here to read the full article (subscription may be required).

5. SPAC Securities Class Action Comes for Recently Public Health Care Company

Clover Health is an insurance company focusing on Medicare Advantage that uses its proprietary software platform to offer PPO and HMO plans to eligible consumers. It fits the mold for many would-be SPAC acquisitions: a technology company with its own platform servicing a growing industry. Chamath Palihapitiya must have thought so as well, as Clover Health announced its plans to merge with his SPAC – Social Capital Hedosophia Holdings Corp. III (“SCH”) – on October 6, 2020. The business combination was completed three months later, on January 7, 2021. However, less than one month later, a sole plaintiff filed a purported federal securities class action against Clover Health Investments, SCH, and relevant officers and directors in the United States District Court for the Middle District of Tennessee. Click here to read the full article.

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