I’m a trial lawyer for injured people and businesses at The Beasley Firm. Founded in 1958, we have recovered over $2 billion for our clients through hundreds of verdicts and settlements in excess of $1 million. We’re listed in Super Lawyers, Best Lawyers in America, U.S. News’s Top Lawyers, [...]
Alas, National Banks Have Virtually No Fiduciary Duties To Depositors And Are Almost Impossible To Sue
I've sued several multinational banks for breaches of fiduciary duty and breaches of contract, and have always been amazed their lack of any accountability or responsibility. It's not just a handful of instances of banks selling a company's loan to their competitor and bank lawyers lying to federal regulators. They live in a different world from you and I. In one of my cases, a bank fired a financial adviser because he was covering his gambling losses by stealing from clients. All well and good, until the bank covered up the whole mess and didn't tell any of his clients ... Continue Reading
The New Wave Of Breach Of Fiduciary Duty Forum-Shopping By Corporate Boards of Directors
[UPDATE: In related news, a federal judge in San Francisco recently ignored a forum selection bylaw that tried to force derivative suits to be filed in the Delaware Chancery Court. "A bylaw unilaterally adopted by directors...stands on a different footing [from contractual forum agreements]," Judge Seeborg wrote. "Particularly where, as here, the bylaw was adopted by the very individuals who are named as defendants, and after the alleged wrongdoing took place, there is no element of mutual consent to the forum choice at all, at least with respect to shareholders who purchased their shares prior to the time the bylaw was ... Continue Reading
Mark Zuckerberg On His Co-Founder: “just take the lawsuit…I’m just going to cut him out and then settle with him”
I already made one post out of The Social Network (i.e., Why Mark Zuckerberg Won't Sue For Defamation Over The Facebook Movie), which is one more than I expected, but apparently there's another legal issue in there. Gawker and Business Insider published a scoop yesterday on the "dirty tricks" that Mark Zuckerberg used to force co-founder Eduardo Saverin out of the company. Relevant to our interests: As that first summer went on and TheFacebook.com grew more popular than anyone imagined, the company needed money to keep running. Finding investors wasn't hard. As early as July, Silicon Valley bigwigs like Mark Pincus, ... Continue Reading
eBay v. Newmark: Al Franken Was Right, Corporations Are Legally Required To Maximize Profits
[UPDATE: Francis Pileggi has his take (courtesy of a guest blogger), as does Steven Davidoff at DealBook.] [UPDATE II: Todd Henderson has a riposte. He's right that most companies can engage in modest philanthropic efforts without worry, but if a company starts putting its money where its mouth is on philanthropy, they'll get eBay'd, just like craigslist was. Craigslist didn't engage in "purely philanthropic ends," they tried to protect the frugal, community-centric corporate culture that was a hallmark for their success. The Court held: no, sorry, can't do that, because that conflicts with your duty to maximize shareholder value. Thus, the duty ... Continue Reading
Wall Street Law Firms Band Together To Complain About Judge Rakoff – And Are Ignored
Via the Am Law Daily, the Wall Street Journal had an article about an effort by Bank of America's lawyers — at Wachtell, Davis Polk, and Cleary Gottlieb — to keep Judge Jed Rakoff from presiding over a shareholder class action against them: Bank of America Corp. tried to keep cases pending against it from landing with U.S. District Judge Jed Rakoff, in the hopes of avoiding another dramatic confrontation with the judge over the bank's handling of the Merrill Lynch & Co. takeover. It got the outcome it wanted, though not necessarily thanks to its efforts. The nation's largest bank ... Continue Reading
Public Pension Funds Complain About Private Equity Fees – Why Not Sue Under Jones v. Harris Associates?
The New York Times reports: Private equity deal-makers, those kings of corporate buyouts, made billions for themselves when times were good. But some of their biggest investors, public pension funds, are still waiting for the hefty rewards they were promised. The nation’s 10 largest public pension funds have paid private equity firms more than $17 billion in fees since 2000, according to a new analysis conducted for The New York Times, as the funds flocked to these so-called alternative investments in hopes of reaping market-beating returns. But few big public funds ended up collecting the 20 to 30 percent returns ... Continue Reading
Studies Confirm Public Pension Securities Fraud Lawsuits Are Driven By Fraud, Not Pay-For-Play
Kevin LaCroix at The D&O Diary reports, On March 24, 2010, Cornerstone Research released its annual study of securities class action lawsuit settlements. The most recent study, which is entitled "Securities Class Action Settlements: 2009 Review and Analysis" and is written by Ellen M. Ryan and Laura E. Simmons, can be found here. Cornerstone’s March 24, 2010 press release concerning the study can be found here. The study reflects a number of interesting observations about median and average securities class action lawsuit settlements that were approved during 2009. The study also includes a useful analysis of the factors that affect settlement ... Continue Reading
Jones v. Harris Brings Out Another Harvard Law Professor Who Knows More About Writing Columns Than Litigating Cases
[Updated to clarify a distinction between securities suits and investment company act suits.] This week, the Supreme Court heard arguments in Jones v. Harris. Briefly, the Oakmark complex of mutual funds "hired" Harris Associates as investment advisers, paying Harris 1% (per year) of the first $2 billion of the fund’s assets, 0.9% of the next $1 billion, 0.8% of the next $2 billion, and 0.75% of anything over $5 billion. I write "hired" because the situation is murky: Harris is directly affiliated with Oakmark. Importantly, the fee charged by Harris to Oakmark is more than double the fee it charges unaffiliated ... Continue Reading
Supreme Court To Review Enron “Honest Services” Mail Fraud Conviction
SCOTUSBlog reports: The Supreme Court agreed on Tuesday to rule on claims that “searing media attacks” on longtime Enron executive Jeffrey K. Skilling tainted his criminal trial and conviction on various fraud charges. The case of Skilling v. U.S. (08-1394) also raises an issue on the scope of the federal law punishing the failure to provide “honest services” as a corporate executive. In his petition to the Supreme Court, Skilling argued, In closing argument, the government declared that Skilling and Lay committed honest-services fraud because they violated a duty to Enron’s “employees”—a duty the government described as “a duty of good ... Continue Reading
Small Businesses More Likely To Have Corporate Veil Pierced Than Large Companies
That's the conclusion of new scholarship by law professors Dave Hoffman and Cristy Boyd, in a draft just published here on SSRN, with blogging about it here. After analyzing 690 cases that sought to pierce the corporate veil between 2000 and 2005, they conclude: The part that extra-legal influences play in veil piercing cases should caution corporate lawyers and scholars. Although jurists have focused on the influence of law and lawyers' craft on the likelihood of defending the veil, we find that two previously ignored factors – ideology, and firm size, play as important a role, if not more so. ... Continue Reading
