Patricia Gorham November 18, Legal Quick Hit: Trends in Securities Fraud Litigation

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1 Patricia Gorham November 18, 2015 Legal Quick Hit: Trends in Securities Fraud Litigation

2 Trends Post Halliburton II Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S.,134 S. Ct (June 23, 2014) Supreme Court declined to overrule Basic v. Levison s fraud on the market presumption of reliance. Defendants may defeat the presumption of reliance at the class certification stage, with evidence that alleged misrepresentation did not affect market price of stock. The number of securities fraud class actions had fallen while the case was pending and rebounded 14% after the decision issued.

3 Omnicare Decision Highlighted 2015 Year Omnicare, Inc. v. Laborer s Dist. Council Constr. Indus. Pension Fund, 135 S. Ct (2015) Clarified pleading standards for Section 11 opinion statement cases focus on whether speaker had a reasonable basis for expressing opinion. Lower courts are considering applicability of holding to Section 10(b) fraud cases: Nakkhumpun v. Taylor, 782 F.3d 1142 (10 th Cir. 2015) In re Merck & Co., Inc. Sec., Derivative & ERISA Litig., No. CIV.A SRC2015, WL (D.N.J. May 13, 2015) In re Genworth Fin. Inc. Sec. Litig., No. 3:14-CV-682, 2015 WL (E.D. Va. May 1, 2015) In re Amarin Corp. PLC, Sec. Litig., No. 13-CV-6663 FLW TJB, 2015 WL (D.N.J. June 29, 2015)

4 General Trends in Federal Securities Fraud Class Actions Trends based on NERA s 2014 and Cornerstone s 2015 mid-year analyses. There continue to be a steady number of filings. For 2015, pace is 226 cases. New cases are being filed closer to the end of proposed class periods. Filings related to the financial crisis are down. Filings against foreign companies continue to grow. Number and median size of settlements are down.

5 Energy Companies and Securities Litigation Trends Filings against energy companies declined to average historical levels at year-end Filings are increasing in the technology and consumer sectors.

6 Examples of Energy Industry Cases In re Petrobras Sec. Litig., No. 14-CV-9662 JSR, 2015 WL (S.D.N.Y July 30, 2015) Underlying foreign corruption allegations Misrepresentation and omission allegations Judge Rakoff denied motion to dismiss in July Class action complaint, Stephens v. Uranium Energy Corp., No. 4:15-CV-1862 (S.D.Tex. June 29, 2015) Allegations of undisclosed paid stock promoters Complaint for violation of the federal securities laws, Atkinson v. ForceField Energy, Inc., No. 1:15-CV (S.D.N.Y. April 17, 2015) Allegations of undisclosed paid stock promoters

7 Regulatory Enforcement Driving Securities Litigation [F]ederal securities litigation continues to be largely driven by the actions taken by regulators. PwC 2014 Securities Litigation Study SEC fiscal year 2015 results Continuing increase in actions Disgorgement and penalties $4.2 billion Data mining techniques Coordination with DOJ CFTC / FERC activity accelerating

8 Regulatory Trends Continued focus on financial reporting Reserve reports and fair value Estimated value of foreign exploration concession Accounting Internal controls Disclosures Gatekeepers Whistleblowers

9 Emerging Regulatory Trends Market participants, exchanges, traders International fraud / corrupt practices Cybersecurity First-of-their-kind cases

Patricia A. Gorham, Partner 404.853.8298 patricia.gorham@sutherland.com Patti has significant securities fraud class action experience.

10 Patricia A. Gorham, Partner Patti has significant securities fraud class action experience. She represents public companies, officers and directors, special committees, and audit firms in shareholder suits involving cutting-edge issues of SLUSA preemption, loss causation, and omission pleading standards. Patti conducts internal investigations, represents clients in connection with grand jury, criminal and regulatory investigations, and defends False Claims Act allegations. Patti is Editor of the American Bar Association s Professional Liability Litigation Committee newsletter, serves on the Board of Governors of the State Bar of Georgia, and is a Director of the Georgia Legal Services Program.

11 SUTHERLAND S ENERGY AND ENVIRONMENTAL PRACTICE Sutherland s Energy and Environmental Group has more than 60 lawyers representing every major sector of the energy industry. Our 40-year history of excellence in serving the regulatory, compliance and policy needs of our clients is matched by the commercial and operational experience we bring to increasingly complex transactions. Complemented with our team of wellregarded, high-profile litigators, Sutherland s energy practice is well positioned to provide the full range of legal services to our energy clients. Our clients include crude oil and natural gas refiners and producers, domestic and multinational traders, energy lenders and marketers, hedge funds and financial institutions, independent power producers and electric cooperatives, international oilfield service providers, and renewable energy developers.

Catherine M. Krupka Alison C. Graab March 19, Legal Quick Hit: Recent Trends in Energy Regulatory Investigations

Catherine M. Krupka Alison C. Graab March 19, 2014 Legal Quick Hit: Recent Trends in Energy Regulatory Investigations 1 Under the current theory of Enforcement at FERC, you re guilty until proven innocent.