Recent Developments

Ireland Goes Its Own Way And Rejects Third-Party Litigation Funding

Since 2010, when the U.S. Supreme Court ruled in Morrison v. Australia National Bank Ltd., 561 U.S. 247 (2010) that purchasers of securities that were traded on a non-U.S. exchange could not bring claims under U.S. federal securities laws, we have observed two key trends. First, there has been a significant increase in securities litigation brought on a group basis in Europe, Canada, Australia, Japan and other non-U.S. jurisdictions. Second, and relatedly, third-party litigation funding has greatly expanded in various countries ...

EpiPen Purchasers Accuse Pharmacy Benefit Managers of ERISA Violations in Class Action Lawsuit

A group of EpiPen purchasers have sued their pharmacy benefit managers, known as PBMs, in federal court in Minneapolis. In a lawsuit filed by Berman DeValerio, the EpiPen purchasers claim the PBMs—Express Scripts, CVS Health, and Prime Therapeutics—bear responsibility for the massive increase in the amounts EpiPen purchasers paid out-of-pocket for EpiPen. A copy of the Complaint is available here. The EpiPen purchasers allege that instead of pushing for lower prices from Mylan, the drug company that markets and sells EpiPen, the PBMs demanded rebates from Mylan—and kept a significant amount of those rebates for themselves.

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.