For the full list, please go here.

As always, readers are encouraged to send information on securities litigation related events to us via the "Contact Us" link on the upper left hand side of this blog.

Securities Litigation & Enforcement Institute 2008
September 15 - 16, 2008
PLI New York Center - New York, NY

Highlights:

• Strategies for prosecuting and defending the securities fraud action
• The implications of Stoneridge’s rejection of “scheme liability”
• Developments in auditor liability
• Update on options backdating claims

The conference brochure is not yet available, but for more details, visit the conference webpage.

The Subprime Mortgage Crisis: From A to Z

September 18-19, 2008
Renaissance Mayflower Hotel, Washington, DC

Highlights:

• A full-scale assessment of the legal fallout and ramifications of the subprime mortgage crisis
• Examination of the receivership of IndyMac Bank
• Discussion of how the legal landscape has been and is being changed

The conference brochure is available here or for more details, visit the conference webpage.

Securities Litigation & Enforcement Institute 2008
October 20 - 21, 2008
PLI California Center - San Francisco, CA

Highlights:

• Latest government enforcement initiatives and how to deal effectively with the government
• What the subprime crisis means for securities litigation
• The latest on corporate governance litigation

The conference brochure is not yet available, but for more details, visit the conference webpage.

As noted by Kevin LaCroix at The D&O Diary, the lead plaintiffs in the GM case were two international institutional investors, both affiliates of DekaBank.

A reader asked whether that made GM the largest settlement where a non-US institutional investor was the lead plaintiff.

The short answer is no, but the long answer is far more interesting.

According to the most recent Top 100 Securities Class Action Settlements Report (a publication that we put out for clients each quarter), the largest securities class action settlements where a non-US institutional investor was the lead plaintiff would be the two Nortel Networks cases, where the Ontario Public Service Employees’ Union Pension Plan Trust Fund and Ontario Teachers’ Pension Plan Board were among the lead plaintiffs.

But most commentators (this one included) generally look at non-North American parties when we are looking to examine the role of non-US investors in US securities class actions.

The next largest settlement where a non-US institutional investor was the lead plaintiff is the Delphi case, which, with total settlements of just over $322 million is slightly larger than the total settlement in the GM securities class action.

In the Delphi case, Raiffeisen Kapitalanlage-Gesellschaft (Austria’s largest asset manager) and Stichting Pensioenfonds ABP (a pension fund for Dutch government and educational sector employees) were among the co-lead plaintiffs.

The initial reader question raised more questions for us over at SLW World Headquarters - namely who gets to scream "We're #1" with regard to some of the other securities class action settlements over the years.

So without further ado, here is a quick rundown of some of the largest securities class action settlements:

Taft-Hartley fund as Lead Plaintiff - Tyco International, Ltd.

The Plumbers & Pipefitters National Pension Fund, United Association Office Employees Pension Plan, United Association of Local Union Officers & Employees Pension and United Association General Officers Pension Plan were among the lead plaintiffs.

Private Institutional Investor as Lead Plaintiff - Toss Up

Voyageur Asset Management was one of the lead plaintiffs in the Tyco litigation, but at the class certification stage, they were not appointed as a class representative by Judge Barbadoro.

The next largest settlement with a private institutional investor as a lead plaintiff was the Royal Ahold litigation, where Generic Trading of Philadelphia, LLC, was co-lead plaintiff.

Both of these cases (and a host more) should be sufficient ammunition should my quixotic quest ever need to be revived.

And of course, the largest securities class action settlement where there were no institutional investors serving as lead plaintiffs was the Bank of America litigation stemming from the NationsBank / BankAmerica merger in 1998.

And for those that wanted something a little more lighthearted, this article recounts the history of the foam #1 finger.

Hot off the presses is The 10b-5 Guide: A Survey of 2007 Securities Fraud Litigation from Weil, Gotshal & Manges.

Just as 2007 saw a substantial increase in the number of new federal securities class actions, the 2007 Weil guide needs more room (253 pages) to discuss all that is brewing in the wide world of securities class actions.

The guide is quite wide-ranging, discussing everything from pleading standards, loss causation and class certification to developments in the lead plaintiff appointment process and that ever popular cocktail party conversation topic, the Securities Litigation Uniform Standards Act of 1998, or SLUSA to the cognoscenti.

The guide, just as with the 2006 version, breaks down these the information by both topic and circuit.

Thanks again to co-author Paul Ferrillo for sending us a copy, which you can download here.

Once again, it is time to update the options backdating numbers, with the announcement this week that Monster Worldwide Inc. had agreed to settle an options backdating securities class action for $47.5 million.

Of the 39 options backdating cases that have been filed as securities class actions, 24 have now reached a resolution. Of the resolved cases, 10 of those cases have been dismissed and 14 have settled.

The fourteen settlements total $1.36 billion, for an average of $97.7 million. But, removing the largest settlement (UnitedHealth Group) lowers the average back to $36.41 million.

As always, our complete analysis can be accessed in this presentation.

For the full list, please go here.

As always, readers are encouraged to send information on securities litigation related events to us via the "Contact Us" link on the upper left hand side of this blog.

35th Annual Advanced Postgraduate Course in Federal Securities Law
July 24-25, 2008, Omni Hotel, San Francisco, CA

Highlights:

• Developments in Securities Litigation
• Handling an Enforcement Investigation
• Accounting, Auditing, and Internal Control Developments

The conference brochure is available here or for more details, visit the conference webpage.

Securities Class Actions From a Former Practitioner’s Perspective and Experience
July 31, 2008
The Waldorf-Astoria Hotel, New York, New York

Highlights:

• Insider's view of the field of securities class action litigation
• Examination of the "predictable" defenses utilized by major law firms
• Suggestions of viable defenses that have not routinely been employed

The conference brochure is available here or for more details, visit the conference webpage.

MELTDOWN! The Impact of the Subprime Crisis on Professional & General Liability
August 13, 2008
The PLI California Conference Center, San Francisco, CA

Highlights:

• Overview of the subprime mortgage industry
• Professional and general liability claims that are likely to be brought
• How regulators are addressing these problems

The conference brochure is available here or for more details, visit the conference webpage.

D&O Liability Insurance
October 7-8, 2008
InterContinental, Cologne, Germany

Highlights:

• Impact of US Style Class Actions on the European D&O Liability Market
• Changes to the European D&O Market as a Result of the Sub-Prime Crisis & Credit Crunch

The conference brochure is available here or for more details, visit the conference webpage.

SLW's author is speaking at the C5 event. Readers using priority service code "780I09.S" will receive a 10% discount.

Of the 38 options backdating cases that have been filed as securities class actions, 23 have now reached a resolution. Of the resolved cases, 10 of those cases have been dismissed and 13 have settled.

The thirteen settlements total $1.32 billion, for an average of $101 million.

However, removing the newest (and largest) kid on the options backdating settlement block (UnitedHealth Group) lowers the average back to $35.48 million.

As kindly pointed out by representatives from Coughlin Stoia, lead counsel in the UnitedHealth case, that settlement is:

- more than double the previous total recoveries

- more than 20 times the average recovery in other settled cases

- more than 5 times the previous largest settlement

As we noted earlier, the options backdating cases have settled much more quickly on average, than other cases. The thirteen cases have settled in an average of 567 days. Removing the two outliers, Mercury Interactive, and Brocade, which were filed earlier and added the options backdating allegations in a later amended complaint, drops the average time from filing of initial complaint to tentative settlement for the remaining 11 cases to 498 days.

And the ratio of settlements to dismissals is somewhat out of line with historical averages as well. Most studies (and a quick check of our database) indicate that the percentage of new securities class actions that are dismissed is between 33-40 percent.

With this group of cases, we can look at the data two ways. Dismissals as a percentage of total cases or dismissals as a percentage of cases that have reached a final, or quasi-final resolution.

Under the former analysis, just over 26% of these cases have been dismissed. That number is artificially low, as not all of the cases have yet had a ruling on the motion to dismiss.

Under the latter method, 47.6% of these cases have been dismissed. This number is artificially high, as a number of these cases have already survived a motion to dismiss.

Our complete analysis can be accessed in this presentation.

It is time to update the analysis for a few reasons. One, there have been some new settlements, notably Brocade Communications which at $160 million, topped the largest prior options backdating related class action settlement, Mercury Interactive. Second, our research (and some gentle prompting from The D&O Diary) has led us to revise our count of cases.

Of the 38 options backdating cases that have been filed as securities class actions, 10 of those cases have now been dismissed and 11 have now settled.

The eleven settlements total $418 million, for an average of $38 million.

As noted earlier, these cases have settled much more quickly on average, than other cases. The eleven cases have settled in an average of 531 days. Removing the two outliers, Mercury Interactive, and Brocade, which were filed earlier and added the options backdating allegations in a later amended complaint, drops the average time from filing of initial complaint to tentative settlement for the remaining 9 cases to 439 days.

And the ratio of settlements to dismissals is somewhat out of line with historical averages as well. Most studies (and a quick check of our database) indicate that the percentage of new securities class actions that are dismissed is between 33-40 percent.

With this group of cases, we can look at the data two ways. Dismissals as a percentage of total cases or dismissals as a percentage of cases that have reached a final, or quasi-final resolution.

Under the former analysis, just over 26% of these cases have been dismissed. That number is artificially low, as not all of the cases have yet had a ruling on the motion to dismiss.

Under the latter method, 47.6% of these cases have been dismissed. This number is artificially high, as a number of these cases have already survived a motion to dismiss.

Our complete analysis can be accessed in this presentation.

The full list (hat tip - Conglomerate) in alphabetical order of the initial author is below along with links to the articles.

Baker, Tom and Sean J. Griffith. The Missing Monitor in Corporate Governance: The Directors’ & Officers’ Liability Insurer. 95 Geo. L.J. 1795-1842 (2007).

Bebchuk, Lucian A. The Myth of the Shareholder Franchise. 93 Va. L. Rev. 675-732 (2007).

Choi, Stephen J. and Robert B. Thompson. Securities Litigation and Its Lawyers: Changes During the First Decade After the PSLRA. 106 Colum. L. Rev. 1489-1533 (2006).

Coffee, John C., Jr. Reforming the Securities Class Action: An Essay on Deterrence and Its Implementation. 106 Colum. L. Rev. 1534-1586 (2006).

Cox, James D. and Randall S. Thomas. Does the Plaintiff Matter? An Empirical Analysis of Lead Plaintiffs in Securities Class Actions. 106 Colum. L. Rev. 1587-1640 (2006).

Eisenberg, Theodore and Geoffrey Miller. Ex Ante Choice of Law and Forum: An Empirical Analysis of Corporate Merger Agreements. 59 Vand. L. Rev. 1975-2013 (2006).

Gordon, Jeffrey N. The Rise of Independent Directors in the United States, 1950-2005: Of Shareholder Value and Stock Market Prices. 59 Stan. L. Rev. 1465-1568 (2007).

Kahan, Marcel and Edward B. Rock. Hedge Funds in Corporate Governance and Corporate Control. 155 U. Pa. L. Rev. 1021-1093 (2007).

Langevoort, Donald C. The Social Construction of Sarbanes-Oxley. 105 Mich. L. Rev. 1817-1855 (2007).

Roe, Mark J. Legal Origins, Politics, and Modern Stock Markets. 120 Harv. L. Rev. 460-527 (2006).

Subramanian, Guhan. Post-Siliconix Freeze-outs: Theory and Evidence. 36 J. Legal Stud. 1-26 (2007). (NOTE: This is an earlier working draft. The published article is not freely available, and at SLW we generally respect the intellectual property rights of others.)

In our earlier review, of the 36 options backdating cases that have been filed as securities class actions, 7 had settled and 3 had been dismissed.

Run the clock for a few months, and 9 of those cases have now been dismissed and 9 have now settled.

The nine settlements total $255.58 million, for an average of $28.4 million.

As noted earlier, these cases have settled much more quickly on average, than other cases. The nine cases have settled in an average of just 440 days. Removing the outlier, Mercury Interactive, which was filed earlier and added the options backdating allegations in a later amended complaint, drops the average time from filing of initial complaint to tentative settlement for the remaining 8 cases to 397 days.

And the ratio of settlements to dismissals is somewhat out of line with historical averages as well. Most studies (and a quick check of our database) indicate that the percentage of new securities class actions that are dismissed is between 33-40 percent.

With this group of cases, we can look at the data two ways. Dismissals as a percentage of total cases or dismissals as a percentage of cases that have reached a final, or quasi-final resolution.

Under the former analysis, exactly 25% of these cases have been dismissed. That number is artificially low, as not all of the cases have yet had a ruling on the motion to dismiss.

Under the latter method, 50% of these cases have been dismissed. This number is artificially high, as a number of these cases have already survived a motion to dismiss.

In any event, things remain interesting in the sometimes long-forgotten world of options backdating.

The IQPC event, 4th Securities Litigation: Enforcement, Regulation, and Litigation in the Securities Arena will be held May 28 - 30, 2008 at the Millennium Broadway Hotel, in New York City.

Highlights include:

• Discussing the increase in class action filings and civil suits going to trial
• Examining the impact of Stoneridge and other recent decisions on the lower courts and class distinctions
• Determining the effects of the subprime crisis on civil suits and government enforcement
• Reviewing enforcement actions of the SEC, states and SROs concerning broker/dealers and investment banks

Readers are entitled to a 20% discount. Simply use the code "RMSL" during the registration process.

The conference brochure is available here or for more details, visit the conference webpage.

As always, for our full list of conferences, webcasts, and events, please go here.

Additionally, readers are encouraged to send information on securities litigation related events to us via the "Contact Us" link on the left hand side of this blog.

According to press reports (here), the seven New Jersey public pension funds that filed the first Tyco opt-out case have settled their claims against Tyco International Ltd., Tyco chief legal officer Mark Belnick and directors Richard Bodman, John Fort III, James Pasman Jr. and Wendy Lane for $73 million.

The settlement does not include claims alleged against former CEO L. Dennis Kozlowski and former CFO Mark Swartz, former director Frank Walsh Jr. and Tyco's outside accounting firm PricewaterhouseCoopers LLP and its Bermuda affiliate, PricewaterhouseCoopers.

The New Jersey public funds were represented by Shalov Stone Bonner & Rocco LLP and Riker Danzig Scherer Hyland & Perretti LLP.

A copy of the 348 page, 1343 paragraph second amended complaint filed by the NJ public funds can be found here.

And of course, an updated scorecard of the Tyco opt-out cases can be found here.

For the full list, please go here.

As always, readers are encouraged to send information on securities litigation related events to us via the "Contact Us" link on the upper left hand side of this blog.

The Subprime Meltdown and Its Impact On The Canadian Landscape
May 6, 2008
The Queen Elizabeth Hotel, Montreal, Quebec

Highlights:

• Impact of claims on the Canadian insurance market
• US and Canadian aspects of the Subprime Meltdown

The conference brochure is available here or for more details, visit the conference webpage.

The Subprime Meltdown and Its Impact On The Canadian Landscape
May 15, 2008
The Hilton Toronto, Toronto, Ontario

• U.S. and Canadian contexts of the sub-prime meltdown
• Exploration of the asset backed commercial paper crisis

The conference brochure is available here or for more details, visit the conference webpage.

4th Securities Litigation: Enforcement, Regulation, and Litigation in the Securities Arena
May 28 - 30, 2008
Millennium Broadway Hotel, New York, NY

Highlights:

• Discussing the increase in class action filings and civil suits going to trial
• Examining the impact of Stoneridge and other recent decisions on the lower courts and class distinctions
• Determining the effects of the subprime crisis on civil suits and government enforcement
• Reviewing enforcement actions of the SEC, states and SROs concerning broker/dealers and investment banks

The conference brochure is available here or for more details, visit the conference webpage.

Mealey's Subprime Mortgage Litigation & Insurance Conference
June 19-20, 2008
The Ritz-Carlton Hotel, Pentagon City, Virginia

Highlights:

• An update on the latest United States Litigation
• Juror Perceptions of the Subprime Mortgage Mess
• Defense Expense and Claims Management Issues Arising from Subprime Litigation

The conference brochure is available here or for more details, visit the conference webpage.

Buried notice is how securities litigators describe the practice of "burying" the notice to class members of a new federal securities class action as required under the PSLRA, i.e., publishing it in a place that it is unlikely (or at least less likely) to be seen by class members.

It is a practice that has but two logical explanations:

1. The practitioners of this particular art form are attempting to keep the publicity surrounding their case to a minimum, in an effort to be appointed lead counsel.

2. The lawyer involved is not a member of the traditional plaintiffs' bar and is taking the notice statute ("shall cause to be published, in a widely circulated national business-oriented publication or wire service") at face value.

I am saddened to report that this practice is still alive and well.

Here is a scanned image of Page 18 of the November 23, 2007 issue of the Financial Times. Note at the bottom the "notice" regarding a new securities class action filed on behalf of purchasers of BP, p.l.c. securities.

The titan of the plaintiffs' bar that placed the ad and is going up against BP (market cap as of this afternoon - $218 Billion) - The Law Offices of William F. Salle.

Who?

This guy:

This is not the first time that Mr. Salle has published a notice in this manner.

And yet, he doesn't end up becoming lead counsel in this cases that he is theoretically "hiding" by burying them.

Also, he tends to file cases in the Central District of California, which PACER users may know as perhaps the slowest district court in the land to put complaints online or update their dockets, thus giving an additional advantage to any firm that can both bury a notice and file a case in that district.

Lastly, there is little, if any, valid reason to file a complaint against BP (a UK company) in the Central District of California. The far more obvious choices would be Alaska (where one of the defendants is headquartered) or New York (where the securities exchanges are located and the vast majority of non-US companies are sued for alleged securities law violations).

I am not a firm believer in coincidences.

In my humble opinion, Mr. Salle is acting in concert with another firm or firms who don't wish to sully their reputations by directly engaging in this practice themselves.

And because of this ridiculous refusal to follow the established practice of the remainder of the profession, I have to have members of my research team comb through, everyday, page by page, copies of Investors Business Daily, the Wall Street Journal, and the Financial Times, among other publications.

Buried notice practitioners - you have been warned.

We won't get into details, but it piqued our interest, so we set to work slicing and dicing the list.

A few interesting details.

The 100 lawyers graduated from 43 different law schools, with an average graduation year of 1981. Willis H. Riccio is the elder statesmen of the group (Georgetown '58), and as gently pointed out by this alleged friend, I am the new kid on the block (Villanova '00).

Harvard was the clear leader, with 16 graduates on the list. NYU, Yale, Georgetown, and Columbia rounded out the Top 5.

But just because a school is in the Ivy League doesn't mean that its graduates fair better than other law school graduates. Penn only has one graduate on the list, while local competitors Temple and Villanova each have two graduates on the list.

And being on the "Top 10" lists of law schools doesn't guarantee admission to the club, as UC Berkeley has not a single graduate on the list, but a Golden Gate University graduate, from just across the San Francisco Bay, snagged a spot on the list.

As far as ideological breakdown goes (a/k/a Drinking the Kool Aid):

16 lawyers on the list clearly sit on the left side of the "v" - that is they primarily represent plaintiffs.

75 clearly sit on the right side of the "v" - that is they primarily represent defendants.

7 are switch hitters, representing a mix of plaintiffs and defendants.

2 (me and Commissioner Grundfest) aren't representing people in private practice these days, though I am a former plaintiff's attorney.

The Dura Pharmaceuticals litigation has found its way on remand back to the District Court and a lot has changed in the securities class action world in the nine years since the case was first filed.

A lot of ink (well pixels mostly - see The 10b5 Daily and The D&O Diary) has been spilled talking about Tellabs, one of the other high profile securities class action Supreme Court cases from the last decade, but the remand of Dura has received, little if any attention.

The reason may be quite simple - Judge Janis L. Sammartino's opinion partially denying and partially granting the motion to dismiss is relatively unremarkable, save for one thing - there is no mention of loss causation (the main issue before the Supreme Court in Dura) - as that issue was decided in a prior motion to dismiss in June 2006. Judge Sammartino's opinion largely addresses the Tellabs issue - whether the facts as plead by plaintiffs give rise to a “strong” inference of scienter after taking into account "plausible opposing inferences.”

The Court found the inference of scienter offered by plaintiffs to be “cogent and compelling,” supported by

the length of time that defendants knew about the problems in the inhaler’s development, the apparent inability of Dura’s product development team to obtain any meaningful improvement in the inhaler performance, the gravity of the problems with the inhaler (including an early return rate more than thirty times the industry standard), the frequency of the product development meetings, Garner’s specific inquiry about the inhaler’s reliability during one such meeting, and the NDA’s failure for the very reasons identified in the Eisele List and discussed during the product development meetings.

But the adequacy of the scienter allegations did not extend to all of the allegations against all of the individual defendants, and certain claims were dismissed.

A copy of Judge Sammartino's opinion can be found here.

Side note - though Dura has actually disappeared, having been swallowed up by Elan Pharmaceuticals, Inc. back in 2000, the Court has chosen not to rename the case, unlike Judge Cote in the Converium litigation, which has been renamed to reflect the change in corporate name and control.

Full disclosure: Once upon a time, the author worked on the Dura Pharmaceuticals litigation, suggesting at least two non-substantive changes to the plaintiffs' opposition to the cert petition.