Developments in Outside Director Liability
As the various corporate scandals have unfolded, one of the concerns has been whether changing laws and attitudes may mean that outside directors face increased exposure to shareholder claims and...
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In a recent post (here), The D & O Diary examined the SEC’s decision not to pursue an enforcement action against the outside directors of the Hollinger International and examined what this move...
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Outside Director Exposure: A Recent Settlement Raises Alarms
Since the well-publicized settlements in the Enron and WorldCom cases, where individual directors were required to contribute toward settlement out of their own assets without recourse to indemnity or...
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Outside Directors: Optimal Insurance for Changing Liability Exposures
In a recent post on his SEC Actions blog entitled “Trends in Securities Class and Derivative Actions Suggest Proactive Steps for Directors and Officers” (here), Thomas Gorman of the Porter Wright law...
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Outside Director Liability: SEC Enforcement Action
From the earliest days of the options backdating scandal, one of the recurring questions has been the potential extent of outside director liability exposure (refer, for example, here). On September...
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Court Approves Outside Directors’ Massive Settlement in Peregrine Systems...
In what may be the largest ever outside director securities lawsuit case settlement, on July 13, 2009, Southern District of California Judge Roger R. Benitez preliminarily approved the six settling...
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Outside Director Exposure for Disclosure Violations
From time to time, the SEC reiterates its view of the critical role companies’ outside directors play in safeguarding investors’ interests. Nevertheless, it has been relatively rare for SEC to pursue...
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Surprise Director Resignations and Securities Litigation Risk
The unexpected resignation of an outside director may indicate that a company is about to experience tough times, according to a recent academic study. The research shows that a company experiencing a...
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Should Directors Be Held Liable More Often?
In an interesting and provocative June 7, 2011 post on the DealBook blog (here), University of Connecticut Law Professor Steven Davidoff voiced his frustration that public company directors are not...
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Outside Director Accountability
Outside corporate directors named as defendants in D&O litigation are rarely required to pay settlements or judgments out of their own personal assets, as prior research has shown. But the question...
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