Securities Litigation Law Firms Look for Next Lawsuit Trends
Lockton report points to sources of future litigation, advises companies on
how to protect themselves
KANSAS CITY, Mo., May 6, 2014
KANSAS CITY, Mo., May 6, 2014 /PRNewswire/ --In their recent white paper, The
Next Big Thing: Predicting the Changing Securities Litigation Landscape,
Lockton's Mark Weintraub and Rodger Laurite assess the current state of
securities litigation, identify potential sources of future lawsuits, and
advise insureds on how to prepare.
As the number of public companies has decreased during the past 15 years and
as novel litigation trends wane, pressure on the securities plaintiff's bar is
growing. Market dynamics, increased competition, and an impending Supreme
Court ruling have law firms desperately searching for the next big securities
law trend. As such, companies need to know how to safeguard themselves from
While there is no way to see the future, the report encourages companies to:
oPay attention to relevant, upcoming Supreme Court case outcomes
oStay aware of emerging litigation trends based on SEC regulatory changes
oBe sure directors & officers policy wording is broad
This summer, the Supreme Court is expected to issue a ruling that will impact
the future of securities litigation. In Halliburton Co. v. Erica P. John Fund,
Inc., the court will revisit the "fraud on the market" presumption that
markets are efficient and investors rely on the company to disclose material
facts. This presumption assumes all investors involved in a lawsuit relied on
specific information and does not require proof for each individual. Whether
upheld or overturned, the outcome will shape the future of securities
As data increasingly becomes a company's most valuable asset, Weintraub and
Laurite note opportunities surrounding cyber risk. They point to the infamous
Target breach as an example, as shareholders have filed two suits against the
company's directors and officers, claiming breach of fiduciary duty and waste
of corporate assets.
"The lawsuit dynamics surrounding the Target cyber breach can easily develop
into a new litigation trend as the foregoing pattern can be replicated
whenever a company suffers a significant cyber event," said Weintraub. The
report encourages companies to consistently review their policies and
procedures surrounding data management and storage and follow the SEC
guidelines for cyber-related disclosures.
While most D&O policies cover claims against individuals, they only cover an
entity for limited securities-related claims. To be fully protected, a company
should ensure their policy includes a broad definition of "securities claim"
and does not limit coverage for follow-on civil litigation.
More than 4,950 professionals at Lockton provide 35,000 clients around the
world with risk management, insurance, and employee benefits consulting
services that improve their businesses. From its founding in 1966 in Kansas
City, Missouri, Lockton has attracted entrepreneurial professionals who have
driven its growth to become the largest privately held insurance broker in the
world and 9th largest overall. Independent researcher Greenwich Associates has
awarded Lockton its Service Excellence Award for risk management for large
companies. For five consecutive years, Business Insurance has recognized
Lockton as a "Best Place to Work in Insurance."To see the latest insights
from Lockton's experts, check Lockton Market Update.
Contact: Dean Davison, Lockton Companies, +1 816 960 9309 (office), +1 816 810
0982 (mobile), firstname.lastname@example.org
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