Corporations facing civil litigation or regulatory investigations often find themselves simultaneously beset with stockholder derivative actions premised on the same underlying facts. For instance, a corporation, together with certain of its directors and officers, may be sued in a securities fraud or employment discrimination class action case, or be the subject of a Securities and Exchange Commission or Department of Justice investigation, only to then see a stockholder derivative case filed based on the same events.
Reproduced with permission from Securities Regulation & Law Report, 46 SRLR 1677, 08/25/2014. Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com