February 26th, 2011
On Wednesday earlier this week, the New York State Bar Association’s International Section held a seminar in London on the topic of Transatlantic Litigation. I was one of the co-organisers and one of the two speakers.
Our aim for the event was to provide a forum for the debate of recent developments in transatlantic litigation, featuring two current topics of interest from English and American perspectives, namely shareholder derivative actions and freezing injunctions.
Due to overwhelming interest we relocated from our original venue to the Law Society of England & Wales’ Hall to host the barristers, solicitors and attorneys from various jurisdictions among others. Thanks again to all who were there for their attendance and lively, high calibre contributions to the discussions on the night.
My talk focused on derivative actions in an Anglo-American context:
“I am a litigator. When there is a problem, I sue first.” That, as I recall it, is the quote by one of the lawyers on a panel a few years ago. These two lines have stuck with me since. They remind me at times how, or perhaps why, though the American legal system may have originated from the English one, the practice of law in one is certainly different from the way of doing things in the other.
It is great to see that among us here today there are practitioners from both sides of the pond. I went to law school here in England after which I qualified as an attorney in New York State - and I am actually Dutch – so I may technically be an ‘American lawyer’, but I feel I belong to one side as much as the other and I believe I am sensitive to both.
I would like to acknowledge Jonathan [Armstrong, NYSBA International Section Vice Chair] for his suggestion I co-organise this event with my fellow speaker and Daniel [Saoul, fellow speaker] for his efforts in making it happen. I would like to thank the New York State Bar Association and the Young Lawyers and Trial Lawyers Sections for their assistance and the Law Society for having us on short notice. Our original venue held thirty attendees so it was a pleasant surprise we had well over seventy registered attendees and had to relocate, with apologies to those on the waiting list.
I will briefly discuss the US and UK derivative actions - or derivative claims as they are called in the UK - the difficulties in bringing and maintaining a derivative action in the United States on behalf of a UK corporation and very briefly touch on a number of such cases. In conclusion I will submit that looking back some details may have changed and that, looking ahead, what is still the same is more relevant.
In the US, a derivative action is an action brought by…
To continue reading, see the full remarks.
March 31st, 2010
Last week and in January, the Stanford Law School Securities Class Action Clearinghouse, in cooperation with Cornerstone Research, published two annual securities class action reviews: Filings 2009 and Settlements 2009, respectively. (press releases: filings, settlements)
Unfortunately, the settlements review does not separately discuss settlements of cases in which the defendant is a non-US issuer. (Such as Taiwan’s Himax Technologies Inc.’s. (NASDAQ:HIMX; settlement notice)) The findings of this review are covered by The National Law Journal, The Wall Street Journal Law Blog, The 10b-5 Daily and others. Two main findings, in short: 103 settlements, up from 97 in 2008, and an increase in the average settlement value to $37 million, up from $28 million.
The filings review however does provide a brief note and a statistic on non-US issuers. Its Class Action Filings-Foreign Index, indicating the number of filings against foreign issuers relative to total filings, fell to 12.4% (21 of 169) in 2009 from 13.5% in 2008 and 16.4% in 2007. It is expected this ratio is to decline further next year:
[M]any recent filings against foreign [non-US] issuers were related to the credit crisis. As the credit crisis-related activity continues to subside, lawsuits against foreign issuers may fall back to the levels observed before the crisis. (p.11)
(Note, though not a new filing in 2009, an action against Vodafone Plc (LON/NYSE:VOD) that was dismissed end of 2008 was re-opened early 2009, to be dismissed again in January this year.)
February 25th, 2010
In the next few weeks I will be attending the following events: an LSE lecture and Weil Gotshal webcast on the 4th, Barroway Topaz’ annual conference on the 11th and the NYSBA’s litigation roundtable on the 16th.
On 4 March, the London School of Economics and Political Science hosts the fifth and final lunchtime lecture in its Thinking Like a Social Scientist (Lent Term) series: Risk versus responsibility in the regulation of the company. (It follows today’s penultimate lecture, Risk-Based Regulation: Rethinking from a Lawyers’ Perspective.)
‘This lecture will explore the tensions that exist in company law between, on the one hand, holding managers accountable to shareholders and ensuring that they do not use corporate power for their own benefit, and on the other, ensuring that regulation that holds them accountable does not excessively interfere with managerial authority which is central to value creation through the corporate form.’ (details) Podcasts of LSE events are normally available within two working days after the event.
Later on the 4th, Weil Gotshal & Manges LLP’s webcast Aligning Compensation with Shareholder Value: Avoiding Bonusgate takes place, the first in its 2010 Litigation Seminar Series. Topics discussed by the panel will include recent and historic court decisions and new “say on pay” proposals. (CLE accredited; details; LinkedIn event)
Former UK Prime Minister and leader of the Labour Party Tony Blair is this year’s keynote speaker at the fifth annual Rights & Responsibilities of Institutional Investors conference in Amsterdam, 11 March. Barroway Topaz Kessler Meltz & Check LLP and Institutional Investor co-host. This year’s case studies examine the Bank of America takeover of Merrill Lynch and the German Model Case Act (KapMuG) in general and the Hypo Real Estate Holding AG case in particular. (details; programme)
And on the 16th, London-based Duane Morris LLP partner and New York State Bar Association’s International Section Vice-Chair Jonathan P. Armstrong ‘will look at the litigation climate in the UK with an emphasis on those issues which affect business between the UK and the US [followed by] a roundtable discussion on the state of cross-border litigation.’ (details; LinkedIn event)
One event that will not return is the two-day European Securities Litigation Conference that took place in London in March last year. (previous post) Sad.
February 24th, 2010
It is with great pleasure and pride that I am announcing the opening of my own law practice, Kranenburg.
While in law school in London I came across the US area of law of securities fraud class action litigation, but the subject wasn’t taught in class here. I read about a case settlement in the press, it must’ve been 2004. I was fascinated. Since then I’ve been following the cases and legal developments and gotten to know the players. That led to a summer associateship in 2005 and, since 2006 as long-suffering readers are aware, the writing about securities litigation in the form of this weblog, on Twitter and in publications such as the Financial Times and Legal Week.
On 21 January 2010 I took the oath to become a fully qualified attorney and counselor-at-law licenced and admitted to practice law in all courts of the US State of New York. It shouldn’t be much of a surprise to learn that my practice will focus on representing private and institutional investors in securities class actions, derivative suits and deal litigation. Notably though, like this weblog, from a European’s point of view. The emphasis is on representing European clients in US proceedings from my office in the City, London’s financial district, working with other firms as co-counsel where appropriate.
In addition, I serve as liaison counsel to firms and attorneys in handling the European side of discovery in cases and assisting in any matters that require being handled with locally by US-qualified counsel.
Please update the contact details you have for me and of course I welcome your queries. When in London, make sure you drop by.
Werner R. Kranenburg
Attorney & Counselor-at-Law
No. 1 Poultry
London EC2R 8JR
+44 20 3174 0365 (telephone)
January 13th, 2010
As usual, NERA Economic Consulting and Stanford Law School, in cooperation with Cornerstone Research, have released reports looking back at the year’s securities fraud class action activity (NERA press release, report; Stanford press release, report).
In its latest annual report, NERA does not separately track or comment on filings against foreign issuers, except for a footnote on the Vivendi trial (p. 11). Stanford does. (Both reports are discussed in-depth by learned friends at the 10b5 Daily (here and here) and D&O Diary and elsewhere, such as at the AmLaw Daily and Bloomberg.)
In Stanford’s 2009 Mid-Year Assessment the Class Action Filings-Foreign Index (CAF-F Index) was introduced, which tracks filings against non-US issuers relative to total filings. It found that “[t]he frequency of filings against issuers with non-U.S. headquarters has increased in recent years” from 6.8% of filings during 1997 through 2003, to 13.3% of filings during the next five years, peaking at 13.8% (31 filings) in 2008. This is all the more noteworthy since “the share of foreign companies listed on the major U.S. exchanges [NYSE and NASDAQ] has actually decreased” from 13.3% to 10.7% between 2002 and 2008. (p.7)
A key finding of its year-end report is however that “[a]fter peaking at 16.4 percent in 2007, the percentage of filings against foreign issuers declined to 13.5 percent in 2008 and to 12.4 percent in 2009.” (p.11)
What’s more: in Canada, class action filings will be up this year (Financial Post, thanks to AB Data); also see NERA’s Trends in Canadian Securities Class Actions (study).
March 2nd, 2009
After following the action from the sidelines for a while I finally caved in and created a Twitter account about a fortnight ago now. (See my first ‘tweet‘, as posts are called there.) Twitter is a ‘micro-blogging’ site where one can post messages for others to ‘follow’; a message may contain just 140 characters, much like a text message.
The aim of the dual blogging destinations - WV&Z/Twitter - is to add a short, quick-fire message function to the more in-depth, long form With Vigour and Zeal. (So it’s certainly not a replacement!) On Twitter too, I will post on European collective action developments but it will be in a mixture of other legal topics and personal stuff as well unlike the ‘purer’ WV&Z here which remains exclusively focused on collective actions with a European angle.
Some of the things already posted on my Twitter profile are an update on the Northern Rock compensation case (here; see previous post) and comments on Santander’s Madoff settlement in Miami (such as here). Personally, I announced going to a discussion at the New York Public Library last week featuring among others Prof. Lawrence Lessig (here, and followed up here).
To follow me on Twitter, if you have a Twitter account, simply go to my profile and click on the ‘Follow’ button. If you don’t have a Twitter account, you may receive the RSS feed, or, of course, simply drop in if and when to check out what’s new.
Thanks to Bruce Carton, again, for announcing my arrival on Twitter. His Securities Docket has a list of securities counsel to follow on Twitter. Also see the more general LexTweet and Justia Legal Birds for listings of lawyers and others on Twitter.
March 2nd, 2009
It’s been a few months since Lovells LLP has published its latest Class Actions Bulletin but it’s still the latest one and still packed with interesting articles, so it’s still revelant to post here.
Topics include the EU Commission’s collective action benchmarks and recent studies, the latest on collective actions in France and the Netherlands, alternative forms of collective actions in Germany (other than the KapMuG), a piece on ‘corporate responsibility - a step in the right direction or towards increased group litigation?’ in England and Wales and ‘Class Actions - a pan-European perspective’.
An update on the article on the Dutch ‘Class Action’ Act - which states that “the Court of Appeal has not yet declared the Royal Dutch settlement as binding upon all shareholders. A hearing is expected before the end of 2008″ - is that the hearing has taken place on 20 November and that the decision is pending.
January 14th, 2009
The trial pitting former shareholders of Northern Rock Plc against the UK Government has kicked off yesterday. (previous post) The Government nationalised the bank early last year and the issue of this judicial review is the level of compensation its shareholders are due under the Banking (Special Provisions) Act 2008. A selection of the many press articles on the case: Legal Week, The Lawyer, FT and The Times.
Among other players are Lord David Pannick QC of Blackstone Chambers (instructed by White & Case LLP) for SRM Capital, one of the bank’s two biggest shareholders at the time (also see The Times); George Bompass QC of 4 Stone Buildings (instructed by Edwin Coe LLP) for the 150,000 individual shareholders that account for 25% ownership; and Lord Anthony Grabiner QC of One Essex Court (instructed by Slaughter and May) for the Commissioners Of Her Majesty’s Treasury.
The trial is scheduled for three-and-a-half days, to end Friday, at the Administrative Court (situated at the Royal Courts of Justice). Catch it while you can.
January 14th, 2009
On 2 October 2007, Hypo Real Estate Holding AG’s (FRA: HRX) shares were trading well above €40 a share. That day, HRX completed the acquisition of Deutsche Pfandbriefbank AG (DEPFA) for more than €5 billion. (press release) At the close of trading yesterday, the shares were at just above €2, the combined group worth just over €400 million.
The board of directors of HRX allegedly withheld price-sensitive information in relation to this acquisition and since then in relation to the combined group’s state of affairs. It wasn’t until 29 September 2008, when HRX announced a ‘major new funding facility’ (press release), that the real, dire financial situation the group was in became clear. In the period between those dates, it had among other things released an operating performance update (7 November), its preliminary 2007 figures (15 January) and several interim reports (31 March, 30 June). The resulting decline of its share price damaged investors, according to the law firm Winheller Rechtsanwälte in this press release (in German, in English; details, in German).
Winheller therefore urges shareholders to claim damages under sections 37b and 37c of the Gesetz über den Wertpapierhandel (in German; Securities Trading Act). Those two sections provide the legal basis for claims against issuers of financial instruments that trade on German exchanges, due to omission of price-sensitive information or publication of untrue information. The statute of limitations for such claims is no longer than three years from the omission or publication, respectively, though it could be as short a period as one year from when the ommission or untruth was known to the third party (WpHG §37b(4), §37c(4)). Hence Winheller’s advice to file a claim no later than 15 January 2009 (this Thursday), one year after publication of the 2007 figures, though arguably the omissions and/or publications continued and were not known until the announcement of 29 September 2008 and therefore a claim by 29 September this year could still be within the limitations period.
Further to these same allegations, last month the district attorney’s office in Munich (with the involvement of Germany’s financial services regulator, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) searched Hypo Real Estate’s offices and the homes of former executives and a former chairman (Bloomberg).
January 8th, 2009
The alternative name for this post could’ve been “Does exactly what it says on the tin”. (hint) If you’re not familiar with that phrase, translate that to the more straightforward “What you see is what you get”. (explained or watch) For the three events listed below are literally named after their respective programme contents.
Securities Docket hosted its first webcast Tuesday, entitled 2008 Year in Review - Securities Litigation and Enforcement. (details; via BrightTALK, registration required) It’s free to play from the archive.
Barroway Topaz Kessler Meltzer & Check LLP’s fourth annual Rights & Responsibilities of Institutional Investors conference is forthcoming. It will be held on 12 March in Amsterdam at the Renaissance Hotel. (details) This year’s keynote speaker is former US Secretary of State Madeleine K. Albright.
The Ronseal prize however goes to the Euromoney Institutional Investor Plc’s inaugural European Securities Litigation Conference. (Main sponsor: Bernstein Litowitz Berger & Grossmann LLP) It takes place on 30 and 31 March in London at the Radisson Edwardian Marlborough. (details, programme)
This conference boasts a number of familiar speakers as well as interesting new ones and covers a wide spectrum of topics, all related to European securities litigation. An outlook on 2009 and the coming ‘wave of actions’, an update on litigation funding, perspectives from regulators and in-house counsel, a discussion of hedge funds’ roles in collective actions and dealing with the difficulties of (lack of) discovery are all in there, as is the big one: ‘how will trustee obligations propel pension funds into securities litigation cases?’
Change of venue: European Securities Litigation Conference has changed its venue to the Radisson Edwardian Mayfair.