June 13, 2023
Survey of Securities Defense Counsel
The D&O Diary recently shared a guest post from Ed Whitworth and Yera Patel of Inigo summarizing the results of a recent survey they conducted of securities defense counsel. The full summary is worth a read, but here are some of the top takeaways:
– Derivative settlements are continuing to increase in severity. The Caremark standard is holding but continues to be eroded in places. Derivative cases are an increasingly attractive option for the Plaintiff Bar.
– SEC investigations are going formal much earlier and naming individuals at the outset. These cases are therefore becoming much more expensive to defend.
The report also includes some predictions for 2023, which Ingio will assess next year once the data is available:
– Dismissal rates will fall by at least 5% in 2023 relative to the average for the past 10 years.
– Securities class action filing rates will be higher in 2023 than in both 2022 and 2021.
– There will be at least five derivative settlements of more than $100m each in 2023.
– Bankruptcy filings will increase, leading to more breach of fiduciary duty and fraudulent transfer claims.
– SEC investigations will be a major exposure for companies and insurers over the next 24 months.
– Meredith Ervine