ETHICAL ISSUES IN COMPLEX SECURITIES LITIGATION

CD: Could you provide an overview of securities litigation activity over the past 12 months? What key trends have you observed in this space?

Johnson: One significant trend in securities litigation over the last 12 months has been the increase in state court actions asserting claims under the Securities Act 1933 Act following the Supreme Court’s 2018 decision in Cyan Inc. v. Beaver County Employees Retirement Fund. In fact, the Securities Act cases filed in state court increased 40 percent last year from the prior year. Interestingly, 22 of the 49 cases filed in state court last year also had a parallel case in federal court. Another noteworthy trend was the increase in the number of securities class action filings alleging missed earnings, which came up in 30 percent of the complaints filed. By contrast, event-driven litigation asserting #MeToo claims and claims related to the opioid crisis declined dramatically from 2018, although I expect we will continue to see plaintiffs pursuing other event-driven claims, such as claims based on cyber security breaches, in 2020.

Thomas: The UK securities litigation market has experienced an increase in activity, with a lot more potential cases being evaluated by funders and law firms to determine if successful actions could be brought under the statutory regimes of section 90 or 90A of the Financial Securities and Markets Act 2000 (FSMA). Omers Administration Corporation & Others v Tesco Plc is the first case to be brought under section 90A FSMA, with the trial due to begin on 2 June 2020. This follows the RBS rights issue litigation which was the first case to be brought under section 90 FSMA. A further development has been the first financial antitrust cases, relating to the foreign exchange rigging scandal, to be brought under the collective action regime introduced by the Consumer Rights Act 2015 allowing opt-out class actions on the grounds of competition infringement.

Apr-Jun 2020 issue

Debevoise & Plimpton LLP

MoloLamken LLP

Skadden, Arps, Slate, Meagher & Flom LLP

Stewarts