Directors and Officers Litigation

Our attorneys have experience representing public and private companies (as well as investment banks and accounting firms) and their respective officers, directors, employees, partners, and affiliates in cases filed in federal and state courts. Our clients are major international, national, and regional public and private companies and their individual officers and directors. Our attorneys have handled all types of directors and officers litigation, including recovery actions brought by trustees of bankrupt publicly-traded companies, class actions under the federal securities laws, and claims charging directors, officers, and general partners with breach of fiduciary duty and related misconduct.

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Some of the Directors and Officers Litigation matters handled by our attorneys:

Represented telecommunications company and officer in post-bankruptcy plan litigation relating to preclusive effect of prior releases in securities class actions and bankruptcy reorganization, resulting in favorable settlement.

Defended underwriters, corporations and individual officers and directors in multiple securities claims arising under various sections of the Securities Act of 1933 and 1934.

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The Financial Conduct Authority (the “FCA”) issued a prohibition order against Mr Frensham based on his conviction for an offence which did not involve financial fraud or dishonesty and was unrelated to regulated activity. Following a referral, the Upper Tribunal considered such a prohibition for the first time in Frensham v The Financial Conduct Authority [2021] UKUT 0222 (TCC). Although the Tribunal concluded that the conviction alone was insufficient to make a prohibition order, the FCA’s decision was nonetheless upheld due to Mr Frensham’s failure to be open and transparent with the FCA during the course of the criminal investigation and later regulatory proceedings brought by the Chartered Insurance Institute (“CII”), which meant that he lacked integrity. In short, the Tribunal concluded that “it is not the fact that a criminal offence has been committed that is fatal to an applicant’s case but the manner in which he deals with the consequences that follow. In this case, we have found that the way Mr Frensham dealt with those consequences demonstrated a lack of integrity which entitles the Authority to exercise the prohibition power in order to further its statutory objectives”.

The Tribunal’s carefully reasoned judgment provides essential guidance both to the FCA and to firms assessing an individual’s fitness under the Senior Managers and Certification Regime (“SMCR”), and more generally under the Individual Conduct Rules (“COCON”), on how non-financial misconduct committed in an individual’s private life, where unrelated to their regulated activity, should be approached. This C&G Client Alert reviews the facts and the law, and analyses key lessons from the case.

As we have previously noted, exclusive forum bylaws potentially offer protection from the risks of multi-jurisdictional litigation.  Recent developments include the withdrawal of an appeal from a Delaware Court of Chancery decision that found such bylaws facially valid and additional feedback from proxy advisory firms.  This alert provides an overview of questions that remain unresolved and provides guidance to companies and stockholders considering exclusive forum bylaws.