Recent Developments

Snap IPO Triggers Outcry Over Non-Voting Shares

On March 1, 2017, Snap Inc. made history by becoming the first U.S. company to go public by selling only non-voting shares. Of the 200 million shares offered in the IPO for the company behind the popular mobile messaging app Snapchat, absolutely none have any right to vote on directors, executive compensation, a corporate sale or other key corporate matters. Rather, those rights rest exclusively in the hands of Snap insiders. Many institutional investors and shareholder advocates are alarmed about Snap's dual-class structure that deprives shareholders of a voice. Many want to avoid owning such shares, but worry that if Snap is added to an established index, then ownership may become inevitable. To avoid such a scenario, several investor groups are advocating that index providers exclude Snap from major stock indices.

Supreme Court To Decide Liability for Failing to Disclose Known Trends

The U.S. Supreme Court recently accepted an appeal to resolve a circuit split over whether companies have an actionable duty to disclose known trends or uncertainties that could affect their business. The case—Leidos, Inc. v. Indiana Public Retirement System, No. 16-581 (U.S.)—may significantly impact the ability of investors to hold companies liable for omitting information from their financial reporting.

SEC Limits Power to Issue Subpoena

The Acting Chair of the U.S. Securities and Exchange Commission recently moved to limit who at the SEC can authorize the issuance of subpoenas. The abrupt change, which the SEC did not announce publicly, removes the ability to issue subpoenas from approximately 20 senior officials in the SEC's Enforcement Division—limiting that power to just the Director of that division.

House Passes Legislation That Would Constrict Class Actions; Opponents Turn Their Attention to the Senate

Last week, the House of Representatives passed sweeping legislation that would upend the class action landscape. If the Senate passes the "Fairness in Class Action Litigation Act," injured investors and consumers could potentially run into colossal difficulties, if not outright dead-ends, in seeking efficient relief through class actions or the legal system itself.

In a Made for TV Moment, President Trump Selects His Supreme Court Nominee: Judge Neil Gorsuch

It seems fitting that President Trump, as a former reality television star, would announce his pick for the Supreme Court during prime time with 33 million viewers tuning in. At 8:00 pm EST, a day after tweeting that he chose his nominee and would announce his selection on Tuesday evening, President Trump took to the lectern to introduce Judge Neil M. Gorsuch to the world.