Dan O’Connor and Joe Cleemann Publish Article on Control Person Liability in Bloomberg Law Reports
Boston-based securities litigation partner Dan O’Connor and New York-based litigation associate Joe Cleemann recently authored “Control Person Liability” for Bloomberg Law Reports. The article ran in the April 25 issue of the Securities Law Report, and in the May 2 issue of the Securities Litigation & Enforcement Law Report.
The authors explain that an unheralded “13-word parenthetical phrase” in the Dodd-Frank Act gives the SEC unequivocal authority to bring monetary and injunctive claims against directors, officers, and other control persons for violations committed by their subordinates. The passage of the amendment to Section 20(a) of the Securities Exchange Act of 1934 also means the SEC can now litigate these actions in courts that once barred or discouraged such claims.
Commenting on the implications of this new regulatory environment, the authors write, “There are two things control persons should consider doing to protect themselves from the threat of liability: (1) prevent violations and lay the groundwork for strong affirmative defenses; and (2) examine D&O insurance.”
To view the full article, including a detailed outline on next steps for control persons to protect themselves, please click here.
Ropes & Gray has one of the largest and most experienced securities litigation practices in the country. The firm serves as general or special counsel to more than 100 public companies and advises more than 500 mutual funds or fund boards.