We should learn to cultivate the unwillingness to tolerate the unwitting, untold lie in the soul, and the wit and wisdom to transmute the unavoidable lying of any utterance into the telling lies that reveal truth… The first lecture of the school year is, by an old tradition, dedicated to the freshmen among us. Whether you […]
Nikko Management Asset increased its share in Twitter Inc. (TWTR) by 1085.68% based on its latest 2019Q1 regulatory filing with the SEC. Nikko Asset Management Americas Inc. bought 2.01M shares as the company's stock rose 21.79% to the market. At the end of 2019Q1, the institutional investor had 2.20 million shares of the technology company, […]
For a little more than a year I lived in Palestine. This text is not about that time but rather a phenomenon I first encountered there. That would be, in an overarching sense, the experience of the normalization of the expectation of the abnormal event. In this context, an abnormal event refers to an incident […]
RADNOR, Pa., June 17, 2019 /PRNewswire/ — The law firm of Kessler Topaz Meltzer & Check, LLP alerts investors that a securities fraud class action lawsuit has been filed against Box, Inc. (NYSE: BOX) (“Box”) on behalf of those who purchased or otherwise acquired Box securities between November 28, 2018 and June 3, 2019, inclusive (the […]
“So it’s great news for the Art Market and Artprice to see Sotheby’s – the only listed auction operator — being acquired by Patrick Drahi, a 55-year-old global entrepreneur with a portfolio of telecommunications, media and digital companies. The offer price, which represents a premium of 61% to Sotheby’s closing price on June 14, 2019, and […]
NEW YORK, June 17, 2019 /PRNewswire/ — The Bluerock Total Income+ Real Estate Fund (“TI+,” tickers: TIPRX, TIPPX, TIPWX, TIPLX) has paid a second quarter distribution of $0.3983 per share, or 1.31% for the quarter, based on the share price of $30.35 (A-shares) for shareholders of record as of June 14, 2019. This distribution amount […]
FILE PHOTO: Lyft President John Zimmer and CEO Logan Green applaud as Lyft lists on the Nasdaq at an IPO event in Los Angeles, California, U.S., March 29, 2019. REUTERS/Mike Blake
June 17, 2019
By Suzanne Barlyn
(Reuters) – Companies going public in the United States face insurance costs that have increased as much as 200% in the last three years to cover their executives against lawsuits alleging they misled investors.
A rise in securities class-action cases involving initial public offerings is spurring IPO insurers to double and triple prices for directors and officers coverage, or “D&O” coverage, insurers and brokers told Reuters.
A $5 million policy that cost $200,000 in 2016 can now easily cost $500,000 to $600,000, said Paul Schiavone, head of North American Financial Lines for Allianz Global Corporate & Specialty, an Allianz SE unit.
“You want to be part of the market, but there are also lots of risks in IPOs,” said Schiavone. “If things don’t go well in a year, you have the investors saying, ‘I want my money back.’”
The tightening insurance market follows a 2018 U.S. Supreme Court decision that allows some securities lawsuits to proceed in state court in addition to federal court.
“Since then, the market has gotten absolutely more challenging,” said Jennifer Sharkey, President of the Northeast Management Liability Practice for insurance broker Arthur J. Gallagher & Co.
Investors who used to wait months to see how a new stock would perform now waste little time to see if promises made in offering documents come to fruition – and are swift to accuse the executives of misleading investors if they do not.
“You have a lot more aggressive lawyers and investors out there who are looking where the cash is,” said Jeff Lubitz, who heads Securities Class Action Services for Institutional Shareholder Services. “And now, it looks like they will have multiple choices on how to jump on this.”
The changes come amid a spate of mega-IPOs, including recent offerings by ride-sharing rivals Uber Technologies Inc and Lyft Inc. There were 205 IPOs in 2018, up 14% from 2017, according to accounting and consulting firm EY.
Many larger companies have ample funds to pay the premiums, but smaller companies that need the insurance in order to attract reputable board members may feel the strain, insurance brokers said.
There have been 25 lawsuits related to IPOs so far this year, against 19 companies. Six companies that launched IPOs face suits in both state and federal court, including Lyft, BrightView Holdings Inc, and US Xpress Enterprises.
Shareholders slapped Lyft with a lawsuit about three weeks after its stock began trading on March 28 and quickly tanked more than 20%. The suit alleges that Lyft misled investors by overstating its market share. A Lyft spokeswoman declined to comment.
As the pace quickens and litigation picks up in two court systems, insurers are on the line to pay tens of millions of dollars in defense costs and substantial settlements.
IPO-related settlements have totaled $929 million since 2017, including a $250 million settlement by Alibaba Group Holding Ltd in April, after an earlier $75 million state court settlement. Last year, LendingClub Corp settled a suit for $125 million, according to ISS.
About 25 insurers sell D&O coverage to companies going public, including American International Group Inc, Chubb Ltd, AXA XL, Beazley PLC, and Allianz SE. The insurers, collectively, can offer about $150 million coverage, according to broker Aon Plc.
Insurers are chopping coverage limits and requiring IPO clients to pick up more costs before a policy kicks in. And they are requiring companies to pay a percentage of the eventual loss, said Rachel Turk, D&O team leader for Beazley.
(Reporting by Suzanne Barlyn in New York, Editing by Neal Templin and Rosalba O’Brien)
(Reuters) – Companies going public in the United States face insurance costs that have increased as much as 200% in the last three years to cover their executives against lawsuits alleging they misled investors. FILE PHOTO: Lyft President John Zimmer and CEO Logan Green applaud as Lyft lists on the Nasdaq at an IPO event […]
(Reuters) – Companies going public in the United States face insurance costs that have increased as much as 200% in the last three years to cover their executives against lawsuits alleging they misled investors. A rise in securities class-action cases involving initial public offerings is spurring IPO insurers to double and triple prices for directors […]
NICHOLAS B. MILLER: “Reconstituting the networks of the complex and mobile individuals through which indenture globally spread as a legal form of labor can sharpen our understanding of how migration practices and policies became universalized over the course of the nineteenth century, extending well beyond the framework of individual empires.” (1,745 words)
Title IX and what it means for safety on campus By: Abigail Nilsson Staff Writer Back in early February, RIC students received an email from President Sanchez informing the community that obscenities were yelled at a female walking across the campus. Following this episode, campus police and security were increased. No more emails have been […]
On Friday, shares of Twitter, Inc. (NYSE:TWTR) marked $36.15 per share versus a previous $36.34 closing price. With having a -0.52% loss, an insight into the fundamental values of Twitter, Inc., investors would also find a great ally in the technical patterns of the stock movements showed in stock charts. TWTR showed a rise of […]
[ad_1] #stocksupdate #globalstocks #globalstocksupdate #stocksnews © -. More choice for IPO lawsuits in U.S. spur 200% increase in some executive insurance By Suzanne Barlyn (-) – Companies going public in the United States face insurance costs that have increased as much as 200% in the last three years to cover their executives against lawsuits alleging […]