On March 25, 2019 car rental giant Hertz Corporation filed a complaint against its former CEO (Mark Frissora), CFO (Elyse Douglas), and General Counsel (John Zimmerman) pursuant to its Compensation Recovery Policy (“Hertz Clawback Provisions”).Hertz Corp. v. Frissora, No. 2:19-cv-08927 (D.N.J. Mar. 25, 2019). In the complaint, Hertz invoked its Hertz Clawback Provisions against its three former executives to recover incentive compensation that was paid to the executives between 2011 and 2013. Id. at 1. Specifically, the Hertz Clawback Provisions, which were denoted in all three of the prior executives’ employment contracts, required its former executives to forfeit any previously awarded incentive compensation if their “gross negligence and misconduct” resulted in a restatement in the company’s financial statements. 

In Plumbers & Steamfitters Local 773 Pension Fund v. Danske Bank A/S, No. 19-cv-235 (S.D.N.Y. Jan. 19, 2019), Plumbers & Steamfitters Local Pension Fund (“Plaintiffs”) filed a class action suit against Danske Bank A/S (“Defendant”). The complaint was filed on behalf of all purchasers of Defendant’s American Depositary Receipts (“ADRs”) between January 9, 2014 and October 23, 2018. Plaintiffs claimed Defendant engaged in a series of untrue and misleading statements in response to allegations of illicit banking activities stemming from Defendant’s Estonia branch during the class period, thereby violating Rule 10b-5 of the Securities Exchange Act of 1934 (“the Act”).

In Akorn, Inc. v. Fresenius Kabi AG (Del. Ch. 2018 WL 4719347), the plaintiff pharmaceutical company (“Akorn”) brought suit against Fresenius seeking specific performance of its signed merger agreement. Fresenius argued it was permitted to terminate the merger agreement because Akorn’s actions, performance, and misrepresentations following execution of the agreement constituted a materially adverse effect (“MAE”) under the terms of the merger agreement and thus excused Fresenius’s obligation to perform. The court held that Fresenius legally terminated its merger agreement with Akorn because: (1) Akorn made material misrepresentations with regard to its business operations and the status of its regulatory compliance before the closing date, (2) Akorn did not materially comply with or perform its obligations under the merger agreement prior to the effective closing date, and (3) Akorn suffered a general MAE that allowed Fresenius to terminate the agreement.

In SEC v. Cade, No. 2:18-cv-01323-JEO (N.D. Ala. Aug. 17, 2018), the SEC filed an initial complaint against Catlin Cade (“defendant”) alleging a violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and SEC Rule 10b-5 by trading shares of Golden Enterprises, Inc. (“Golden”) on the basis of material nonpublic information.

According to the allegations, a director of Golden learned of nonpublic information pertaining to a contemplated merger between Golden and a second company. The director separately owned and controlled a different privately held company (“Director’s Company”)

The precipitous rise of cryptocurrencies has numerous implications for securities trading, the most fundamental of which is when, and if, any given cryptocurrency exchange is required to become a registered exchange as defined by the SEC.

A cryptocurrency is a digital currency that can be traded and exchanged (Ian King, Investopedia). One defining feature of cryptocurrency is that it is decentralized, meaning it is not issued by a central bank or regulatory agency. Id.This foundational aspect of cryptocurrencies is desirable to investors because unlike traditional fiat currencies that are subject to governmental control and manipulation, cryptocurrencies and their values operate independently from a central authority.