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Audra Soloway and Daniel Sinnreich Featured on Rising Edge D&O Podcast
October 24, 2021
In the inaugural episode of the Rising Edge D&O Podcast, “US Securities Litigation,” litigation partner Audra Soloway and associate Daniel Sinnreich discuss emerging U.S. securities litigation risks and mitigation strategies. Joined by Rising Edge’s Head of Claims Owen Dacey and Director Yoel Brightman, they also discuss the importance of proactive public communications and disclosures. Rising Edge is a UK-based boutique directors and officers insurance firm.
“Securities litigation really follows life,” says Audra. “We can be sure that whatever is the focus of the newspapers is going to appear in our cases.”
Asked to address how companies facing negative announcements can be proactive in fending off litigation, she adds, “companies provide the minimum of what they’re required to say, but they don’t necessarily think about the fact that these documents they’re issuing are creating a record that could be used in a motion to dismiss going forward. Sometimes saying more than what’s absolutely required can be helpful, because if you provide your shareholders with an explanation of what’s really led to this moment in time, those disclosures can then be used to explain to a court later why there’s no actionable misstatement.”
In discussing recent movement in the Delaware courts’ attitude toward historically difficult-to-prove Caremark claims, which allege failures of board oversight, Dan notes that in the first 22 years that the pleading standard was in place, only seven cases survived a motion to dismiss.
“In the last two years, there have been another seven cases that have survived a motion to dismiss, so there does seem to be an increased appetite in Delaware courts,” he says. “The facts [in these cases] tend to be extreme, but what the Delaware courts are saying is there needs to be some evidence of board-level monitoring and oversight, and that a board that is aware of a major issue, especially in a heavily regulated area, can’t ignore multiple red flags.”
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