SECURITIES LITIGATION: COORDINATING AN INVESTIGATION

CD: What do you consider to be among the key trends and developments in securities litigation over the last 12 months or so? To what extent has there been an uptick in such cases?

Williams: Over the past 12 months, the Securities and Exchange Commission (SEC) has continued to focus on the priorities outlined by its chairman, Jay Clayton, of protecting retail investors, holding individuals accountable, monitoring cyber security and digital assets, and pursuing remedies that further the agency’s enforcement goals. The SEC has focused its efforts on bringing cases involving misconduct that impacts ‘main street’ investors, including cases against investment advisers for conflicts of interest and misallocation of fees and expenses, cases against public companies for financial reporting disclosure violations and accounting fraud, and actions against individuals and entities involved in the unlawful offering of digital assets. I expect these trends to continue in the coming months as the agency also dedicates resources towards rooting out securities law violations arising out of the coronavirus (COVID-19) pandemic.

Lund: The amount of securities litigation being pursued before English courts continues to increase. One key development which is responsible for this increase is the growing prevalence of third-party litigation funding in the UK. The fact that large numbers of shareholder claimants will be individuals means third-party funding is particularly attractive, as it allows claimants to participate without having to contribute to the costs of the proceedings themselves. Group litigation orders (GLOs) – being one of the legal mechanisms by which collective actions can be brought in the UK – provide an ‘opt-in’ procedure by which claimants can elect to join an action and provide an effective vehicle for proceedings involving shareholders. Other contributing factors to the growth of shareholder actions include the continuing development of law firms’ group litigation practices, the advent of boutique claimant firms which proactively encourage claimants to opt-in to groups and an increased familiarity with the use of GLOs as an effective case management tool.

Jul-Sep 2020 issue

Kirkland & Ellis LLP

Skadden, Arps, Slate, Meagher & Flom LLP

Weil, Gotshal & Manges (London) LLP