Will COVID-19 Cause Securities Litigation?

Written by John Durrant

As of May 5, 2020, the COVID-19 pandemic has accompanied a precipitous descent in the domestic securities markets, followed by a surprisingly sharp rebound. Such volatility may well give rise to several different types of potential liability against companies and their officers and directors, including:

  • Securities fraud claims under the Exchange Act of 1934 (the “Exchange Act”).
  • Claims related to offerings of securities under the Securities Act of 1933 (“Securities Act”).
  • Claims under the various state securities claims, i.e., the “Blue Sky” laws.
  • Derivative suits arising under state law.

Business leaders may well say, “Wait, we didn’t cause COVID-19; we didn’t shut down the economy; how can we be held liable?” Continue reading “Will COVID-19 Cause Securities Litigation?”