Shearman & Sterling LLP (JD Supra United States)

On November 20, 2020, lawyers for a former investment banker, indicted in the United States District Court for the Eastern District of New York for his alleged role in the 1MDB matter, filed a Motion to Dismiss (“MTD”) the indictment against him, which includes charges of conspiracy to launder money and conspiracy to violate the U.S. Foreign Corrupt Practices Act (“FCPA”). Motion to Dismiss the...

On November 22, 2020, Judge Howard C. Nielson, Jr. of the United States District Court for the District of Utah dismissed with prejudice a putative class action asserting claims under the Securities Exchange Act of 1934 against a biotechnology company and certain of its executives. In re PolarityTE, Inc. Sec. Litig., No. 2:18-cv-00510, 2020 WL 6873798 (D. Utah Nov. 22, 2020). Plaintiffs alleged...

On November 23, 2020, the United States Court of Appeals for the Second Circuit vacated a grant of summary judgment to the plaintiff in a derivative action seeking disgorgement of alleged “short-swing profits” in an action under Section 16(b) of the Securities Exchange Act of 1934 against a registered investment advisor, its customer, and the individual defendant who held positions at both...

On November 20, 2020, Vice Chancellor Morgan T. Zurn of the Delaware Court of Chancery dismissed stockholder derivative claims against the directors of Christopher & Banks Corporation.  Gottlieb v. Duskin, C.A. No. 2019-0639-MTZ (Del. Ch. Nov. 20, 2020).  Plaintiffs alleged that the directors breached their fiduciary duties by wrongfully enacting defensive measures to rebuff an unsolicited...

On November 3, 2020, California voters approved several ballot initiatives including Proposition 22, which exempts online-enabled applications and platforms (such as Uber, Lyft, Postmates, DoorDash and Instacart) from a state law intended to provide full employee protections to certain service providers (including many gig-workers) who may have been classified as independent contractors. Nearly 60

On November 16, 2020, Judge Haywood S. Gilliam, Jr. of the Northern District of California granted a motion to dismiss a Section 10(b) claim under the Securities Exchange Act of 1934 (the “Exchange Act”), as well as a Section 20(a) claim under the Exchange Act as it relates to the Section 10(b) claim, against a lead-acid battery recycler (the “Company”) and three of its senior officers. In re...

The oil and gas industry in the United States is highly dependent upon an intricate set of agreements that allow oil and gas to be gathered from privately owned land. Historically, the dedication language in oil and gas gathering agreements—through which the rights to the oil or gas in specified land are dedicated—was viewed as being a covenant that ran with the land. That view was put to the...

This newsletter provides a snapshot of the principal U.S. and selected international governance and securities law developments during the third quarter of 2020 that may be of interest to Latin American corporations and financial institutions. Please see full Newsletter below for more information.

On November 10, 2020, Judge Kiyo Matsumoto of the United States District Court for the Eastern District of New York granted a motion to dismiss a putative securities class action asserting violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against a South African precious metals mining company (the “Company”) and its CEO and CFO. In re Sibanye Gold Ltd. Sec. Litig., No.

On November 10, 2020, Judge Charles R. Breyer of the United States District Court for the Northern District of California dismissed without prejudice a putative class action against a software company (the “Company”) and several of its officers, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Reidinger v. Zendesk Inc. et al., No. 3:19-cv-06

On October 7, 2020, the U.S. Securities and Exchange Commission (SEC) proposed an order (the “Proposed Order”) that would allow natural persons to engage in limited activities assisting issuers in raising capital without registering as a broker-dealer. Currently, a person who identifies and solicits potential investors and receives transaction-based compensation in connection with such activity...

Following our previously published Client Alert titled, “Colombia Relaunches Bid Process for Pacific LNG Import Terminal and Associated Transport Infrastructure,” (“Previous Client Alert”) on October 29, 2020, the Mining and Energy Planning Agency (UPME) released the final version of the tender documents for the USD 700 million LNG regasification facility and related pipeline project, commonly...

The U.K. Financial Conduct Authority has issued a statement confirming the U.K. position from January 1, 2021, for post-trade transparency reporting obligations and position limit regime under the U.K. Markets in Financial Instruments package. The FCA confirms that...

On October 30, 2020, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery upheld breach of fiduciary duty claims brought by former stockholders of TerraForm Power, Inc. (the “Company”) against its majority stockholder, CEO, and several directors. In re TerraForm Power, Inc. Stockholder Litigation, C.A. No. 2019-0757-SG (Del. Ch. Oct. 30, 2020). Plaintiffs alleged that the Company...

On November 4, 2020, Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California granted in part and denied in part a motion to dismiss claims asserted under the Securities Exchange Act of 1934 against a technology company and certain of its executives. In re Apple Inc. Sec. Litig., No. 19-cv-02033-YGR, slip. op. (N.D. Cal. Nov. 4, 2020), ECF No. 118....

The LIBOR transition is not simply a “bank problem.” With the looming transition deadline of year-end 2021, we specifically designed a guide for corporates entitled, How Best to Navigate the LIBOR Transition: Challenges and Solutions for Corporate Treasurers and CFOs, where we discuss the following five key steps for a successful transition: - Take Stock of LIBOR-based Products, as Issuers and

The 2020 Election Results and Implications for the Financial Services Industry - Former Vice President Joseph R. Biden Jr. has won the 2020 presidential election and the Democratic Party will remain in control of the House of Representatives. Though it is yet uncertain whether President-elect Biden and the Democratic Party will win the ability to propose and pass wide-sweeping legislation,...

In our last general discussion on the Main Street Lending Program (the “Program”), we focused on providing an overview of the Program and some key commercial and legal matters for borrowers and lenders to consider when making a determination as to whether procuring a loan under one of the Program’s facilities was the preferred option for such business. Since that publication, the Program has been

The amended complaint alleges that the Company—a manufacturer and seller of doors and windows—engaged in an anticompetitive scheme when it acquired one of its two competitors and then conspired with its remaining competitor to raise prices of doorskins, which account for up to 70% of the cost to manufacture a molded door.  Plaintiffs asserted that…

On October 27, 2020, the U.S. Department of Justice (“DOJ”) announced that a Chicago-based company that produces and sells distilled beverages (the “Company”), agreed to pay a monetary penalty of approximately $19.6 million to resolve the DOJ’s investigation into alleged violations of the U.S. Foreign Corrupt Practices Act (“FCPA”).  As part of its resolution with the DOJ, the Company also...

This quarter, the U.S. announced new sanctions and trade restrictions on China in response to its perceived intrusions on Hong Kong’s autonomy and reported human rights abuses in Xinjiang. The Trump Administration acted unilaterally to curtail Iran’s acquisition of conventional military weapons after receiving little international support for a snapback of U.N. sanctions. And, in a last-ditch...

On October 21, 2020, Judge Beth Labson Freeman of the United States District Court for the Northern District of California dismissed a putative securities class action against a large online cloud-based storage provider (the “Company”), certain of its officers and directors, certain of its controlling shareholders, and the underwriters of its IPO, for alleged violations of Sections 11 and 15 of...

On October 15, 2020, Judge Martha M. Pacold of the United States District Court for the Northern District of Illinois granted a motion to dismiss a putative securities class action asserting violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 against a large packaged foods company (the “Company”), as well as

The European Commission has published a Communication on its EU digital finance strategy for the coming years. The global economy has been transformed by digital innovation, and this includes financial services. The Commission's strategic objective is to embrace digital finance for the benefit of consumers and businesses while ensuring digital transformation is soundly regulated. To achieve this...

On October 13, 2020, the U.S. Department of Treasury (“Treasury”) and the Internal Revenue Service (the IRS) released final regulations (T.D. 9927) (the “Regulations”) under sections 1502 and 1503 of the Internal Revenue Code of 1986, as amended (the “Code”), regarding the absorption of consolidated net operating losses (CNOLs) carryovers applicable to consolidated groups that include one or more

On October 2, 2020, Vice Chancellor Kathaleen S. McCormick of the Delaware Court of Chancery denied a motion to dismiss breach of fiduciary duty claims brought by stockholders of Mindbody, Inc. (the “Company”) against two of its officers in connection with the Company’s $1.9 billion sale to a private equity firm.  In Re Mindbody, Inc., Stockholders Litigation, C.A. No. 2019-0442-KSJM (Del. Ch....

On October 14, 2020, Judge Alison J. Nathan of the United States District Court for the Southern District of New York dismissed with prejudice a putative class action asserting claims under the Securities Exchange Act of 1934 against a pharmaceutical company, certain of its executives, and investors that participated in a go-private merger with the company.  Altimeo Asset Management v. WuXi...

On October 14, 2020, Judge Alison J. Nathan of the United States District Court for the Southern District of New York dismissed with prejudice a putative class action asserting claims under the Securities Exchange Act of 1934 against a lending company and certain of its executives. Burr v. Equity Bancshares, Inc., No. 19-cv-4346 (AJN), slip op. (S.D.N.Y. Oct. 14, 2020). Plaintiffs alleged that...

On October 8, 2020, Judge Michael W. Fitzgerald of the United States District Court for the Central District of California dismissed a putative class action asserting claims under the Securities Exchange Act of 1934 against a food company and certain of its executives. Larry Tran v. Beyond Meat, Inc., et al., No. 20-CV-00963-MWF-AFM, slip op. (C.D. Cal. Oct. 8, 2020). Plaintiffs alleged that the...

On October 12, 2020, the Internal Revenue Service issued Revenue Procedure 2020-44 (the Revenue Procedure) providing additional guidance related to the transition from an interbank offered rate (IBOR) to another replacement rate. Previously, the government issued proposed regulations on October 9, 2019 (the Proposed Regulations), which provide that a transition from an IBOR to another replacement