Securities Law Alert
In This Edition:• Supreme Court: Providing a Gift of Inside Information to a Trading Relative or Friend Is Sufficient toEstablish the Personal Benefit Requirement for Tipping-Based Insider Trading Liability• First Circuit: (1) Plaintiffs Asserting a Section 11 Claim Based on Aftermarket Purchases Must Specifically
Plead Traceability; (2) Defendants Must Disclose Relevant “Troubling Developments” When Making
Optimistic Statements• Delaware Supreme Court: Plaintiffs Raised a Reasonable Doubt as to the Disinterestedness of a Director
Who C0-Owned a Plane with the Controlling Stockholder and Two Directors Who Had Business
Relationships with the Controlling Stockholder

Year in Review:• Supreme Court and Circuit Court Decisions Addressing the ERISA Pleading Standards of Fifth Third
Bancorp v. Dudenhoeffer• Supreme Court: Federal Courts Have Exclusive Jurisdiction Over Suits “Brought to Enforce” the Securities
Exchange Act• Circuit Court Decisions Addressing the Requirements for Pleading Scienter• Circuit Court Decisions Addressing Disclosure Requirements Under Section 10(b)• Circuit Court Decisions Addressing the Safe Harbor for Forward-Looking Statements• Circuit Court Decisions Addressing the Requirements for Pleading Loss Causation Under Section 10(b)• Circuit Court Decisions Addressing Limitations Periods• Circuit Court Decisions Addressing Constitutional Challenges to SEC Administrative Enforcement
Proceedings• Other Noteworthy Circuit Court Decisions• Significant New York Court of Appeals Decisions
December 2016
Simpson Thacher & Bartlett LLPSupreme Court: Providing a
Gift of Inside Information toa Trading Relative or Friend
Is Sufficient to Establish the
Personal Benefit Requirement
for Tipping-Based Insider
Trading Liability
On December 6, 2016, the Supreme Court
unanimously held that the personal benefit
necessary to establish a breach of duty andinsider trading liability under Dirks v. S.E.C.,
463 U.S. 646 (1983)1 is satisfied where atipper gives inside information to a trading
relative or friend. Salman v. United States,2016 WL 7078448 (Alito, J.). The Court’s
narrow decision resolved a recent split
between the Second and Ninth Circuits on thescope of the personal benefit requirement.2

Simpson Thacher’s“[s]ophisticatedgroup of securities
litigators expertly handl[es]the representation of major
financial institutions andprivate equity clients.”– Chambers USA
2016

The Salman Court considered a case in which“the tipper provided inside information toa close relative, his brother.” The tipper’s
brother then passed the information along toa friend, who then traded on that information.
The Court found the following oft-cited
passage in Dirks directly resolved the casebefore it:[T]here may be a relationship between
the insider and the recipient thatsuggests a quid pro quo from the latter,or an intention to benefit the particular
recipient. The elements of fiduciary duty
and exploitation of nonpublic information
also exist when an insider makes a giftof confidential information to a trading
relative or friend. The tip and trade
resemble trading by the insider himself
followed by a gift of the profits to therecipient.
Dirks, 463 U.S. 646.
1. In Dirks, the Supreme Court held an insider can only faceliability under Section 10(b) and Rule 10b-5 for disclosing
material inside information to a third party—or tipping—if theinsider “receive[d] a direct or indirect personal benefit from thedisclosure, such as a pecuniary gain or a reputational benefit thatwill translate into future earnings.”
2. In United States v. Newman, 773 F.3d 438 (2d Cir. 2014)(Parker, J.), the Second Circuit held the Government must prove“an exchange that is objective, consequential, and represents atleast a potential gain [to the tipper] of a pecuniary or similarly
valuable nature.” Several months later, the Ninth Circuit held
the Government may establish the existence of a personal benefit
by presenting “evidence of a friendship or familial relationshipbetween tipper and tippee.” United States v. Salman, 792 F.3d
1087 (9th Cir. 2015) (Rakoff, J.).

The Salman Court reiterated the factual
finding that the tipper had intended toprovide his brother with inside information
for his brother’s benefit, and found that thiswas precisely the type of “gift giving” Dirks
found sufficient to satisfy the “personal
benefit” requirement. Salman, 2016 WL
7078448. Following the logic in Dirks, theCourt noted that the tipper’s conduct—
sharing information with his brother so
the latter could reap financial gains—was
analogous to the tipper himself trading on theinside information and providing his brotherwith the proceeds as a gift.
The Court clarified that “[t]o the extent theSecond Circuit [in Newman] held that the
tipper must also receive something of a‘pecuniary or similarly valuable nature’ inexchange for a gift to family or friends . . . thisrequirement is inconsistent with Dirks.”
Notably, the Salman Court expressly
acknowledged that “[i]t remains that case that
‘determining whether an insider personallybenefits from a particular disclosure, aquestion of fact, will not always be easy forcourts.’” Id. (quoting Dirks, 463 U.S. 646).

First Circuit: (1) Plaintiffs
Asserting a Section 11 Claim
Based on Aftermarket
Purchases Must Specifically
Plead Traceability;(2) Defendants Must
Disclose Relevant “Troubling
Developments” When Making
Optimistic Statements
On November 28, 2016, the First Circuit
held that plaintiffs who assert Section 11
claims based on aftermarket purchases mustspecifically plead facts demonstrating thatthose shares are traceable to the offeringcorresponding to the allegedly misleading
registration statement at issue. In re ARIAD
Pharm., Inc. Sec. Litig., 2016 WL 6933788(1st Cir. 2016) (Howard, C.J.). The court heldthat “general allegations [of traceability] alone
are not sufficient to avoid dismissal.”
The First Circuit also revived a securities
fraud claim alleging that defendants had
expressed optimism concerning FDA approval2with a favorable label without mentioning
the FDA’s request for a label with a black box
warning. The court found defendants’ failure
to disclose relevant “troubling developments
created an impermissible risk of misleading
investors.”

To Plead a Section 11 Claim,
Aftermarket Purchasers Must
Allege Particularized Facts Showing
the Shares Are Traceable to theOffering at Issue
The First Circuit explained that a Section 11
claim “may be maintained only by those whopurchase securities that are the direct subjectof the prospectus and registration statement.”
The court noted that “in order to state a claim,
the plaintiffs need not have purchased sharesin the offering.” Aftermarket purchasers
also have standing to bring Section 11 claims“provided they can trace their shares back to
the relevant offering.”
While satisfying the traceability requirement
is straightforward in cases where “all of acompany’s shares have been issued in asingle offering under the same registration
statement,” the First Circuit observed thatthe inquiry “becomes more complicatedwhere . . . the company has issued shares
under multiple registration statements.”
In those cases, a plaintiff must establishthat “her shares were issued under the
allegedly false or misleading registration
statement, rather than some otherregistration statement.”
The First Circuit rejected the argument that“mere ‘general allegations’ that [plaintiffs’]shares are traceable to the offering inquestion are sufficient to avoid dismissal.”

The court explained that in order to survive
dismissal under the pleading standard set
forth in Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007), plaintiffs cannot simply
allege a “formulaic recitation” of the elementsof a claim (quoting Twombly, 550 U.S. 544).
Rather, plaintiffs must provide “enough facts
to state a claim to relief that is plausible on its
face.” Id. The First Circuit held that “almostby definition, a general allegation that aplaintiff’s shares are traceable to the offeringin question is nothing more than a ‘formulaic
recitation’ of that element.”

Plaintiffs Sufficiently Pled Scienter
Where Defendants Allegedly
Expressed Optimism Concerning
the Likelihood of FDA Approvalon Favorable Terms Without
Disclosing the FDA’s Request for aBlack Box Warning
The First Circuit reversed dismissal of asecurities fraud claim brought in connection
with defendants’ expressions of optimism
concerning the likelihood that the FDA would
approve the company’s new leukemia drugwith a favorable label. Several weeks earlier,the FDA had allegedly rejected the company’s
proposed label and instructed the company
to submit a revised label for the leukemia
drug that included a black box warning, yet
defendants allegedly made no mention of
the FDA’s concerns. The First Circuit foundplaintiffs’ allegations were “sufficient tosupport a strong inference of scienter.” Thecourt reasoned that although “management
may have held out hope of achieving”
FDA approval with a favorable label, “theexpression of that hope without disclosureof recent troubling developments created animpermissible risk of misleading investors.”

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Delaware Supreme
Court: Plaintiffs Raised a
Reasonable Doubt as to theDisinterestedness of a Director
Who C0-Owned a Plane with
the Controlling Stockholder
and Two Directors Who Had
Business Relationships with
the Controlling Stockholder
On December 5, 2016, the Delaware Supreme
Court revived a derivative action broughtin connection with claims concerning stock
sales by the company’s former CEO andcontrolling stockholder (the “controller”) andother company insiders. Sandys v. Pincus,
2016 WL 7094027 (Del. 2016) (Strine, C.J.).
In addition to the three board members who
were interested in the transactions at issue,
the Delaware Supreme Court found thecomplaint raised a reasonable doubt as to the
independence of three other directors basedon allegations that one director co-owned aplane with the controller and two directors
had “interlocking [business] relationships”
with him.

Allegation of a Director’s
Co-Ownership of an Airplanewith the Controlling Stockholder
Is Sufficient to Support anInference That the Director Cannot
Act Impartially
The Delaware Supreme Court found theco-ownership of an airplane “create[d] apleading stage inference that [the director]
cannot act independently of [the controller].”
The court reasoned that “[c]o-ownership ofa private plane involves a partnership in apersonal asset that is not only very expensive,
but also requires close cooperation in use.”
The court found the arrangement “suggestiveof the type of very close personal relationshipthat, like family ties, one would expect toheavily influence a human’s ability to exercise
impartial judgment.”
The Delaware Supreme Court recognizedthat plaintiff offered only cursory allegations
regarding the implications of the airplaneco-ownership. Nevertheless, the court foundthat even under the “elevated” pleading
standard that applies “in the demand excusal

context,” a plaintiff does not have to “pleada detailed calendar of social interaction toprove that directors have a very substantial
relationship rendering them unable to act
independently of each other.” The court
explained that “[a] plaintiff is only required
to plead facts supporting an inference . . . thata director cannot act impartially.” Here,the Delaware Supreme Court found thefacts alleged “support[ed] an inference
that [the director] would not be able to act
impartially when deciding whether to move
forward with a suit implicating a very closefriend with whom she and her husband
co-own a private plane.”

Allegations of a Director’sBusiness Relationships with theControlling Stockholder Raise an
Inference That the Director Cannot
Act Impartially
The Delaware Supreme Court then considered
allegations that two directors had “a mutually
beneficial network of ongoing business
relations” with both the controller and an
outside director who sold company stockin the transactions at issue. The court
found that “it is reasonable to expect” that“a mutually beneficial ongoing business
relationship . . . might have a material
effect on the parties’ ability to act adversely
toward each other.” The court observed that“[c]ausing a lawsuit to be brought against
another person is no small matter, and is thesort of thing that might plausibly endangera relationship.”
The Delaware Supreme Court also foundit significant that the board had allegedly
already determined that both directors did
not qualify as independent directors pursuant
to the NASDAQ Listing Rules. The court
stated that “[t]he NASDAQ rules’ focus onwhether directors can act independently of
the company or its managers has important
relevance to whether they are independent
for purposes of Delaware law.” The Delaware
Supreme Court determined that “if a director
cannot be presumed capable of acting
independently because the director derives
material benefits from her relationshipwith the company,” then the director“necessarily cannot be presumed capableof acting independently of the company’scontrolling stockholder.”

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Year
in Review
Supreme Court and Circuit
Court Decisions Addressing
the ERISA Pleading Standardsof Fifth Third Bancorp v.
Dudenhoeffer
In a Dissenting Opinion, Justice
Valihura Expresses Her View
That Plaintiff Failed to Rebut the
Presumption of Independence
That Applies in the Demand
Futility Context
Justice Valihura dissented from Chief JusticeStrine’s opinion based on her view that theallegations were insufficient to rebut thepresumption of independence that applies inthe demand futility context.
With respect to the two directors who hadbusiness relationships with the controllingstockholder, Justice Valihura observed that“plaintiff failed to plead any facts about
the size, profits or materiality” to the two
directors of the alleged “investments orinterests” that raised a potential conflictof interest. She also noted “the lack of any
explanation as to why [the two directors] wereidentified as ‘not independent’ for NASDAQ
purposes.”
With respect to the director who co-owned
an airplane with the controlling stockholder,
Justice Valihura stated that plaintiff alleged
only a “business relationship” between
the director and the controller based on
their co-ownership. She emphasized that“[n]othing more is alleged, let alone facts
suggesting [any] kind of familial loyalty andintimate friendship.” While Justice Valihura
acknowledged that “it may be reasonable toinfer some kind of collaborative relationshipgiven the nature of the asset,” she stated thatshe did “not believe the bare allegation in the[c]omplaint [rose] to the level of creating areasonable doubt as to [the director’s] ability
to carry out her fiduciary duties.”

Supreme Court: Courts Must Apply
the ERISA Pleading Standards ofFifth Third
In Fifth Third Bancorp v. Dudenhoeffer,
134 S. Ct. 2459 (2014), the Supreme Court
outlined the standards for pleading an ERISA
breach of the duty of prudence claim against
the fiduciary of an employee stock ownershipplan (“ESOP”).
In Amgen v. Harris, 136 S. Ct. 758 (2016)(per curiam), the Supreme Court explainedthat in evaluating a duty of prudence claim
based on inside information under theFifth Third standard, courts must “consider
whether the complaint has plausibly allegedthat a prudent fiduciary in the defendant’s
position could not have concluded that
stopping purchases—which the market mighttake as a sign that insider fiduciaries viewedthat employer’s stock as a bad investment—or publicly disclosing negative information
would do more harm than good to the fundby causing a drop in the stock price and aconcomitant drop in the value of the stockalready held by the fund” (quoting Fifth
Third, 134 S. Ct. 2459).
Applying this standard, the Supreme Court
held the Ninth Circuit had “failed to properly
evaluate” an ERISA complaint brought byparticipants in Amgen-sponsored plans. The
Ninth Circuit had found it “quite plausible”
that removing the Amgen Common StockFund as an investment option under theAmgen Plans would not have resulted in“undue harm to plan participants” (quoting
Harris v. Amgen, 788 F.3d 916 (9thCir.2014)). The Supreme Court conducted its
own review of the complaint and determinedthe complaint “lacked sufficient facts andallegations” to satisfy Fifth Third’s standards.
5

Second Circuit: Lehman ERISA
Suit Dismissed Under PleadingStandards of Fifth Third
In Fifth Third, the Supreme Court held that“where a stock is publicly traded, allegations
that a fiduciary should have recognized frompublicly available information alone that themarket was over- or undervaluing the stock
are implausible as a general rule, at least in
the absence of special circumstances.” 134 S.
Ct. 2459.
On March 18, 2016, the Second Circuit reliedon Fifth Third to affirm dismissal of an ERISA
action brought by former participants in an
ESOP that invested exclusively in sharesof Lehman Brothers Holdings. Rinehart v.
Lehman Bros. Holdings, 817 F.3d 56 (2d Cir.
2016) (per curiam).3 The Second Circuit held
Fifth Third’s pleading standard applies to
ERISA claims based upon public informationsuggesting “excessive risk” as well as toclaims based on “market value.” The court
further ruled that the SEC’s July 2008 orders
prohibiting short-sales of certain financial
firms’ securities, including Lehman stock, did
not constitute “special circumstances” within
the meaning of Fifth Third.
In addition, the Second Circuit held thata plaintiff alleging ERISA claims based ona fiduciary’s failure to investigate inside
information must allege (1) facts showing
how that investigation would have uncovered
relevant nonpublic information, and (2) analternative action that the fiduciary could
have taken that “a prudent fiduciary in thesame circumstances would not have viewed as
more likely to harm the fund than to help it”(quoting Fifth Third, 134 S. Ct. 2459).

Fifth Circuit: Fifth Third Mandatesa “More Harm Than Good”
Standard for ERISA Breach of Dutyof Prudence Claims Based on Inside
Information, Not a “More Good
Than Harm” Standard
On September 26, 2016, the Fifth Circuit
stated that “[u]nder the Supreme Court’s
formulation” in Fifth Third, a plaintiff
asserting an ERISA breach of the duty ofprudence claim based on inside information“bears the significant burden of proposing
an alternative course of action so clearly
3. Simpson Thacher represents the former members of theLehman Brothers Employee Benefit Plans Committee in thisaction.

beneficial that a prudent fiduciary could notconclude that it would be more likely to harm
the fund than to help it.” Whitley v. BP, 838
F.3d 523 (5th Cir. 2016) (Clement, J.). In thecase before it, the Fifth Circuit determinedthe district court had instead erroneously
considered whether “no prudent fiduciary
would have concluded that” the alternative
actions “would do more good than harm.”

Supreme Court: Federal
Courts Have Exclusive
Jurisdiction Over Suits“Brought to Enforce” theSecurities Exchange Act
Section 27 of the Securities Exchange Act
confers federal district courts with exclusive
jurisdiction over all suits “brought to enforce
any liability or duty created by [the ExchangeAct] or the rules and regulations thereunder.”On May 16, 2016, the Supreme Court held
“the jurisdictional test established by [Section
27] is the same as the one used to decide if acases ‘arises under’ a federal law” pursuant to
28 U.S.C. § 1331, the general federal question
statute.4 Merrill Lynch, Pierce, Fenner &Smith v. Manning, 136 S. Ct. 1562 (2016)(Kagan, J.).
Section 1331’s “arising under” test provides
for federal jurisdiction when (1) “federal
law creates the cause of action asserted[,]”or (2) a state-law claim “necessarily raise[s]a stated federal issue, actually disputed
and substantial, which a federal forum
may entertain without disturbing any
congressionally approved balance of federal
and state power.” Applying the second prongof this “arising under” test to Section 27, theSupreme Court stated that federal courts
would have exclusive jurisdiction over “astate law cause of action . . . ‘brought toenforce’ a duty created by the Exchange Act
because the claim’s very success depends on
giving effect to a federal requirement.” The
Court further stated that a state-law action“could also fall within § 27’s compass” if
it “necessarily depends on a showing thatthe defendant breached the Exchange Act.”
However, the Court found Section 27 “stops
short of embracing any complaint that
4. Section 1331 provides federal district courts with “original
jurisdiction of all civil actions arising under the Constitution,
laws, or treaties of the United States.”6

happens to mention a duty established by the
Exchange Act.”

Circuit Court Decisions
Addressing the Requirements
for Pleading ScienterFirst Circuit: Publication ofErroneous Interim Clinical Study
Results, Standing Alone, Does
Not Give Rise to an Inferenceof Scienter
On October 3, 2016, the First Circuit affirmed
dismissal of a securities fraud action alleging
that a pharmaceutical company and severalof its executives “turned a blind eye” to “study
results that seemed too good to be true” inorder to reap “a windfall on the sale of theirstock.” Local No. 8 IBEW Ret. Plan & Tr. v.
Vertex Pharm., 838 F.3d 76 (1st Cir. 2016)(Kayatta, J.). The court found the inference
that the company knowingly or recklessly
published the inaccurate study results was
not “strong enough to equal the alternative
inference that [the company] was negligent inviewing very good results as being even better
than they in fact were.”With respect to plaintiffs’ argument that [thecompany] itself described the study results
as “unexpected,” the First Circuit explainedthat “many studies of new pharmaceuticalproducts result in surprises, both good andbad.” The court also found there was no “legal
requirement . . . that obligated the company
to double-check the interim results before
announcing them.”
Finally, the First Circuit rejected plaintiffs’
theory that defendants were financiallymotivated to overlook “the erroneousinterpretation of the interim results
because of the stock price spike precipitatedby the error.” The court explained that“[a]nnouncing good results on such a
study would have been clearly better for[the company] than announcing great results
only to reduce them to good results by shortly
thereafter confessing error, thereby harming
the company’s credibility and its reputation
for competence.”

Fifth Circuit: Courts Cannot Infer
Scienter Based on an Executive’s
Position in the Company Absent“Special Circumstances”
On January 13, 2016, the Fifth Circuit heldthat it could not infer scienter based on a
corporate officer’s position at the company
absent “special circumstances.” Local 731
I.B. of T. Excavators and Pavers Pension Tr.
Fund v. Diodes, 810 F.3d 951 (5th Cir. 2016)(Jones, J.). The Fifth Circuit explained that“[t]he ‘special circumstances’ cases exhibit
some combination of four considerations
that might tip the scales in favor of aninference of scienter.” First, the court notedthat “the smaller the company the more
likely it is that corporate executives would
be familiar with the intricacies of day to
day operations.” A second factor is whether
the transaction in question was “critical tothe company’s continued vitality.” A third
factor is whether “the misrepresented oromitted information at issue would have beenreadily apparent to the speaker.” Finally,a fourth factor is whether the “defendant’s
statements were internally inconsistent with
one another.” The Fifth Circuit found noneof these considerations were present in thecase before it, and concluded that it could notinfer scienter based solely on the executives’positions within the company.

Sixth Circuit: A Corporate
Executive’s State of Mind May Only
Be Imputed to the Corporation for
Scienter Purposes If the Executive
Made a Public Misstatement
On May 24, 2016, the Sixth Circuit held asenior corporate executive’s state of mind
could not be imputed to the corporation
where the executive did not himself makeany public statements. Doshi v. Gen. Cable
Corp., 823 F.3d 1032 (6th Cir. 2016) (Cook,
J.). The Sixth Circuit reasoned that under
its prior decision in In re Omnicare Sec.
Litig., 769 F.3d 455 (6th Cir. 2014), “acorporate executive’s or employee’s state ofmind” may only be imputed “to a corporate
defendant when such a person makes a public
misstatement.” In the case before the court,
plaintiffs alleged only that the executive“submitted [his division’s] financial data to[the company], not that he drafted, reviewed,
or approved [the company]’s erroneous publicfinancial statements.”

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Tenth Circuit: Failure to Disclose
Project Delays and Cost Overruns
Reflected “Benign Optimism”
Rather Than Scienter
On July 6, 2016, the Tenth Circuit held
plaintiffs failed to raise a strong inferenceof scienter in connection with a company’s
alleged misrepresentations of cost overruns
and production delays. Anderson v. Spirit
Aerosystems Holdings, 827 F.3d 1229
(10th Cir. 2016) (Bacharach, J.). The Tenth
Circuit found it was “more probable that the[company] executives were overly optimistic
and failed to give adequate weight to financial
red flags.”
The Tenth Circuit rejected plaintiffs’ efforts toallege scienter based on a “recovery plan” toput one of the projects back on schedule. The
court acknowledged the company’s “eventual
announcement of a forward loss suggest[ed]that [the company] had placed too muchconfidence in the recovery plan.” But the court
explained that “the same [could] always be
said when a company delays announcementof a forward loss based on remedial efforts toincrease profitability or production.”
The Tenth Circuit also held plaintiffs failed toallege scienter based on the CEO’s after-thefact explanation of why the loss had occurred.
The court found the CEO’s statements only
“suggest[ed] an honest mistake in predicting[the company’s] future production and costs,
not an inference of scienter.”

Circuit Court Decisions
Addressing Disclosure
Requirements Under
Section 10(b)Second Circuit: Under Omnicare,
Issuers Need Not Disclose Every
Piece of Information That Runs
Counter to Their Statements ofOpinion, Provided Those Opinions“Fairly Align” with the Informationin Their Possession at the TimeOn March 4, 2016, the Second Circuit held
the Supreme Court’s decision in Omnicare
v. Laborers’ Dist. Council Constr. Indus.
Pension Fund, 135 S. Ct. 1318 (2015), “doesnot impose liability merely because an issuer
failed to disclose information that ran counterto an opinion expressed in the registration
statement,” provided the opinion “fairly
align[ed] with the information in the issuer’s
possession at the time.” Tongue v. Sanofi, 816
F.3d 199 (2d Cir. 2016) (Parker, J.).
The Second Circuit stated that under
Omnicare, omissions may render opinions
actionable if the omitted information“conflict[s] with what a reasonable investor
would take from the statement itself.”
Id. (quoting Omnicare, 135 S. Ct. 1318).
However, the Second Circuit observedthat the Omnicare Court “cautioned
against an overly expansive reading of thisstandard.” The Supreme Court explainedthat “[r]easonable investors understand that
opinions sometimes rest on a weighing ofcompeting facts” and they do not “expectthat every fact known to an issuer supports
its opinion statement.” Omnicare, 135 S. Ct.
1318. Significantly, the Supreme Court madeit clear that a statement of opinion “is notnecessarily misleading when an issuer knows,
but fails to disclose, some fact cutting theother way.”
In the case before it, the Second Circuit founddefendants’ opinions regarding the expected
timing of FDA approval were not rendered
misleading by defendants’ failure to disclose
the FDA’s concerns about the company’s
clinical testing methodology. The Second
Circuit held defendants had no obligation to“disclose[ ] the FDA feedback merely because
it tended to cut against their projections.”
Sanofi, 816 F.3d 199.
8

Second Circuit: (1) Item 303 ofRegulation S-K Requires theRegistrant’s Actual Knowledgeof a Trend or Uncertainty; and(2) “Probability” Standard Only
Applies to FAS 5’s Disclosure
Requirement If There Was No
Manifestation of a Potential ClaimOn March 29, 2016, the Second Circuit heldthat Item 303 of Regulation S-K, which
mandates the disclosure of certain “known
trends or uncertainties” in a public company’s
Form 10-Ks and other SEC filings, “requires
the registrant’s actual knowledge of therelevant trend or uncertainty” “rather than alesser standard of recklessness or negligence”(emphasis added).5 Ind. Pub. Ret. Sys. v.
SAIC, 818 F.3d 85 (2d Cir. 2016) (Lohier, J.).
Considering the question squarely for the
first time, the Second Circuit determined that
“Item 303 requires the registrant to disclose
only those trends, events, or uncertainties
that it actually knows of when it files therelevant report with the SEC.” The court
found this interpretation supported by boththe “plain language of Item 303” as wellas the “SEC’s interpretation of Item 303.”
Significantly, the Second Circuit stated that“[i]t is not enough” for purposes of Item 303’s
disclosure requirements that the registrant“should have known of the existing trend,
event, or uncertainty” (emphasis added).
The Second Circuit also considered thestandard for claims alleging a failure todisclose a loss contingency for unasserted
claims as required under Financial
Accounting Standard 5 (“FAS 5”) of theGenerally Accepted Accounting Principles(“GAAP”).6 The court held that a “probability”
standard applies to FAS 5-based claims
only if there has been “no manifestation
by a potential claimant of an awareness ofa possible claim or assessment.” In cases
where a potential claimant has manifested
awareness of a possible claim, the court heldthat FAS 5’s disclosure requirements apply
if a loss in connection with that claim is a“reasonable possibility.”
5. Item 303 of Regulation S-K requires a registrant to “[d]escribe
any known trends or uncertainties that have had or that theregistrant reasonably expects will have a material favorable orunfavorable impact on net sales or revenues or income fromcontinuing operations.”
6. Under FAS 5, an issuer must “disclose a loss contingency whena loss is a ‘reasonable possibility,’ meaning that it is ‘more thanremote but less than likely.’” Id. (quoting FAS Board, Statementof FAS 5).

Ninth Circuit: Pharmaceutical
Company’s Decision to Discuss
Certain Studies Supporting a Drug’s
Safety Necessitated Disclosure ofAnother Study Linking the Drug
to Cancer
On October 26, 2016, the Ninth Circuit heldthat once a pharmaceutical company choseto represent that animal studies supported
the safety of its new weight loss drug, thecompany was then required to disclose theexistence of an animal study linking the drug
to cancer. Schueneman v. Arena Pharm., 840
F.3d 698 (9th Cir. 2016) (Bybee, J.).
The court explained that under the Supreme
Court’s decision in Matrixx Initiatives v.
Siracusano, 563 U.S. 27 (2011), “companies
can control what they have to disclose under[the securities laws] by controlling what they
say to the market” (quoting Matrixx, 563 U.S.
27). Once a company opts to “tout” positive
information to the market, however, thecompany is then “bound to do so in a mannerthat wouldn’t mislead investors” (quoting
Berson v. Applied Signal Tech., 527 F.3d 982(9th Cir. 2008)). Specifically, the company
must “disclos[e] adverse information that cuts
against the positive information.”In the case before it, the Ninth Circuit
rejected defendants’ claim that the allegations
reflected merely “a good-faith scientificdisagreement between the FDA and [thecompany] about the meaning of” the study
linking the drug to cancer. The court reasoned
that the company “could have remained silent
about the dispute or it could have addressed
its discussions with the FDA head-on[,]”but it could not “express confidence byclaiming that all of the data was running in[the company’s] favor.”

9

Circuit Court Decisions
Addressing the Safe Harborfor Forward-Looking
Statements

Circuit Court Decisions
Addressing the Requirements
for Pleading Loss Causation
Under Section 10(b)Third Circuit: Speaker’s State of
Mind Is Irrelevant for Purposes of
the PSLRA’s Safe Harbor Provided
the Forward-Looking Statement
Is Accompanied by Meaningful
Cautionary Statements

Eighth Circuit: Not All Bad
Corporate News Is “Corrective” forLoss Causation Purposes

On August 22, 2016, the Third Circuit
held that if a forward-looking statement
is accompanied by meaningful cautionary
statements, then “the state of mind of theindividual making the statement is irrelevant”
for purposes of the safe-harbor provisions of
the Private Securities Litigation Reform Act(“PSLRA”). OFI Asset Mgmt. v. Cooper Tire
& Rubber, 834 F.3d 481 (3d Cir. 2016)(Jordan, J.).
The Third Circuit found the PSLRA“provides two distinct entrances to the safe
harbor” pursuant to which “any forwardlooking statement is protected if it iseither accompanied by substantive andtailored cautionary statements or if theplaintiff fails to show actual knowledge offalsehood.” The court held that “where afuture-looking statement is accompanied bysufficient cautions, then . . . the statement
is not actionable regardless of the plaintiff’s
showing of scienter.”Eighth Circuit: Cautionary
Statements Must Provide
a “Realistic Description of
the Risks Applicable to theParticular Circumstances”
On February 10, 2016, the Eighth Circuit
held that the warnings accompanying
certain alleged misstatements were not“meaningfully cautionary” for purposes of
the PSLRA’s safe harbor because defendants
provided only “a boilerplate litany of generally
applicable risk factors” rather than “a realistic
description of the risks applicable to theparticular circumstances.” Rand-Heart of
New York v. Dolan, 812 F.3d 1172 (8th Cir.
2016) (Benton, J.).

On February 10, 2016, the Eighth Circuitunderscored that “[i]n the financial markets,
not every bit of bad news that has a negative
effect on the price of a security necessarily
has a corrective effect for purposes of losscausation.” Dolan, 812 F.3d 1172. The
court explained that “[a] drop in stock
price is not necessarily caused by an earlier
misrepresentation.” Rather, a lower stock
price “may reflect . . . changed economic
circumstances, changed investor expectations,
new industry-specific or firm-specific facts,
conditions, or other events, which taken
separately or together account for some or allof that lower price” (quoting Dura Pharm. v.
Brodo, 544 U.S. 336 (2005)).
In the case before it, the Eighth Circuit foundthat plaintiffs had not pled loss causation
as to a certain segment of the class period
because plaintiffs did not adequately allege
that the purported “fraud—and not otherevents—caused the [stock] price to fall.”Ninth Circuit: Announcement ofa Government Investigation Can
Serve as a Corrective Disclosure
for Loss Causation Purposes If theInaccuracy of the Misstatement at
Issue Is Subsequently Confirmed
On February 1st, 2016, the Ninth Circuit
held that “the announcement of an
SEC investigation related to an alleged
misrepresentation, coupled with a subsequentrevelation of the inaccuracy of thatmisrepresentation, can serve as a corrective
disclosure for the purpose of loss causation.”
Lloyd v. CVB Fin. Corp., 811 F.3d 1200 (9thCir. 2016) (Hurwitz, J.). The court reasoned
that “any other rule would allow a defendantto escape liability by first announcing agovernment investigation and then waiting
until the market reacted before revealing thatprior representations under investigation
were false.”

10

Circuit Court Decisions
Addressing Limitations
Periods
Second and Sixth Circuits:
American Pipe Tolling Does Not
Apply to the Five-Year Statute of
Repose for Claims Brought Under
Section 10(b) and Rule 10b-5
In American Pipe & Construction Co. v.
Utah, 414 U.S. 538 (1974), the Supreme Court
held “the commencement of a class actionsuspends the applicable statute of limitations
as to all asserted members of the class who
would have been parties had the suit been
permitted to continue as a class action.”
On July 14, 2016, the Second Circuit
determined “American Pipe tolling does
not apply to” 28 U.S.C. § 1658(b)(2), which
establishes a five-year statute of repose forsecurities fraud claims brought under Section
10(b) and Rule 10b-5. SRM Glob. MasterFund Ltd. P’ship v. Bear Stearns Cos., 829
F.3d 173 (2d Cir. 2016) (Lohier, J.).
The Second Circuit explained that in Police &Fire Ret. Sys. of City of Detroit v. IndyMac
MBS, 721 F.3d 95 (2d Cir. 2013) (IndyMac),it held American Pipe tolling inapplicable tothe three-year statute of repose set forth in
Section 13 of the Securities Act of 1933, whichgoverns claims brought under Sections 11
and 12(a) of that Act. For the same reasons
set forth in IndyMac, the Second Circuit held
“American Pipe tolling does not apply to §1658(b)(2)’s five-year statute of repose.” Thecourt explained that “as a statute of repose,§ 1658(b)(2) is not subject to equitable
tolling.” Moreover, the court found § 1658(b)(2) “creates a substantive right in defendants
to be free from liability after five years—aright that American Pipe tolling cannot
modify without running afoul of the Rules
Enabling Act.”On May 19, 2016, the Sixth Circuit alsorelied on the Second Circuit’s decision in
IndyMac to hold American Pipe tollinginapplicable to both the five-year statuteof repose for claims brought under Section
10(b) and the three-year statute of repose forclaims brought under Sections 11 and 12 of
the Securities Act of 1933. Stein v. Regions
Morgan Keegan Select High Income Fund,
821 F.3d 780 (6th Cir. 2016) (Clay, J.). The

Sixth Circuit expressly disagreed with theTenth Circuit, which applied American Pipetolling to the statute of repose for Section 11
claims in Joseph v. Wiles, 223 F.3d 1155 (10thCir. 2000).

Second Circuit: (1) Three-Year
Statute of Repose Applies to Claims
Alleging Materially Misleading
Proxy Statements Under Section
14(a), and (2) the Repose Period
Begins to Run on the Date of the
Most Recent Alleged Violation
On March 17, 2016, the Second Circuit held
the five-year statute of repose establishedby the Sarbanes-Oxley Act of 2002 (“SOX”)
for certain fraud claims does not apply toclaims brought under Section 14(a) of the
Exchange Act, which prohibits material
misleading proxy statements. DeKalb Cty.
Pension Fund v. Transocean, 817 F.3d 393(2d Cir. 2016) (Cabranes, J.). The court
reasoned that SOX’s five-year statute of
repose “applies only to ‘private right[s] ofaction that involve[] a claim of fraud, deceit,
manipulation, or contrivance,’ which Section
14(a) does not.” The court determined that
Section 14(a) claims still remain subject tothe three-year statute of repose that applied
before the passage of SOX.7
The Second Circuit further held that thestatute of repose for Section 14(a) claims“begin[s] to run on the date of the defendant’s
last culpable act or omission.” The court
found the “discovery rule” does not toll thethree-year statute of repose for Section 14(a)7. There is no express private right of action under Section 14(a),nor is there a statute of repose that expressly governs Section
14(a) claims. However, in Ceres Partners v. GEL Associates, 918
F.2d 349 (2d Cir. 1990), the Second Circuit “borrowed the threeyear statutes of repose applicable to Sections 9(f) and 18(a) . . .
and applied them to Section 14.”11

claims until the date the alleged fraud was
discovered or “could have been discoveredin the exercise of reasonable diligence.”
The court deemed the “discovery rule”
inapplicable both because “Section 14(a)claims do not demand fraud” and “alsobecause the discovery rule does not extend to
statutes of repose.”

Circuit Court Decisions
Addressing Constitutional
Challenges to SEC
Administrative Enforcement
Proceedings
D.C. Circuit: Rejects a
Constitutional Challenge to the
SEC’s In-House Courts and Holds
SEC Administrative Law Judges Are
Not “Officers of the United States”
Subject to the Appointments Clause

Tenth and Eleventh Circuits: Circuit
Split Deepens on Whether Section
2462’s Five-Year Limitations
Period Applies to SEC Claims for
Disgorgement
Pursuant to 28 U.S.C. § 2462, theGovernment may not bring any “action, suit,or proceeding for the enforcement of any civil
fine, penalty, or forfeiture” more than five
years after the claim accrues.
On May 26, 2016, the Eleventh Circuit held
Section 2462’s limitations period applies to
SEC claims for disgorgement and declaratory
relief, but not to claims for injunctive relief.
SEC v. Graham, 823 F.3d 1357 (11th Cir.
2016) (Pryor, J.). The court determined that,for Section 2462 purposes, disgorgement isa type of “forfeiture” and declaratory relief“operate[s] as a penalty.” However, the court
found injunctions are “equitable, forwardlooking remedies” outside the reach of
Section 2462.
On August 23, 2016, the Tenth Circuit held
Section 2462’s limitations period does not
apply to SEC claims for disgorgement or
injunctive relief. SEC v. Kokesh, 834 F.3d
1158 (10th Cir. 2016) (Hartz, J.). The Tenth
Circuit’s decision deepened a circuit split
on the question of whether disgorgement isa type of “forfeiture” within the meaning ofSection 2462.8
8. Several years earlier, the D.C. Circuit held that disgorgement
is not a “penalty” subject to Section 2462’s limitations period.
Riordan v. SEC, 627 F.3d 1230 (D.C. Cir. 2010).

On August 9, 2016, in the first circuit court
opinion to consider a constitutional challenge
to the SEC’s in-house courts, the D.C. Circuit
affirmed the constitutionality of the SEC’s
appointment of administrative law judges(“ALJs”). Raymond J. Lucia Cos. v. SEC,
832 F.3d 277 (D.C. Cir. 2016) (Rogers, J.).
The D.C. Circuit held the SEC’s ALJs are not“Officers of the United States” subject to the
Appointments Clause of the United States
Constitution9 because “no initial decisionof [the SEC’s] ALJs is independently final”
under the SEC’s regulatory framework.
The D.C. Circuit noted that in Landry v.
FDIC, 204 F.3d 1125 (D.C. Cir. 2000), it heldthat ALJs of the Federal Deposit Insurance
Corporation (“FDIC”) were not Officers
for purposes of the Appointments Clause“because their authority was limited by FDIC
regulations to recommending decisions that
the FDIC Board of Directors might issue.”
Raymond Lucia, 832 F.3d 277. The D.C.
Circuit found the SEC ALJ’s decisions tobe “no more final than the recommended
decisions issued by the FDIC ALJs” in Landry
because the SEC has a discretionary rightto review the action of any ALJ as it sees fit,either on its own initiative or upon a petition
for review filed by a party or aggrieved person.
Id. (citing 15 U.S.C. § 78d-1(a)-(b)). The
court emphasized that the SEC “retain[s] fulldecision-making powers” over cases heard by
the ALJs.

9. The Appointments Clause states that the President “shallnominate, and by and with the Advice and Consent of the Senate,shall appoint . . . Officers of the United States.” U.S. Const. art.
II, § 2, cl. 2. The D.C. Circuit explained that “[o]nly those deemed
to be employees or other ‘lesser functionaries’ need not be
selected in compliance with the strict requirements of Article II.”
Raymond Lucia, 832 F.3d 277.
12

Second and Eleventh Circuits:
Constitutional Challenges toPending SEC Administrative
Enforcement Proceedings
are Premature
On June 1, 2016, the Second Circuit rejected
as premature claims brought by respondents
in a pending SEC enforcement proceeding
alleging that the SEC’s appointment of the
ALJ in the matter violated the Appointments
Clause. Tilton v. SEC, 824 F.3d 276 (2dCir. 2016) (Sack, J.). Consistent with theprovisions of the SEC’s administrative review
scheme, the Second Circuit determined “theappellants must await a final [SEC] order
before raising their Appointments Clauseclaim in federal court.” In so holding, theSecond Circuit agreed with similar decisions
issued last year by the D.C. Circuit and theSeventh Circuit. See Jarkesy v. SEC, 803 F.3d
9 (D.C. Cir. 2015); Bebo v. SEC, 799 F.3d 765(7th Cir. 2015).
On June 17, 2016, the Eleventh Circuit reliedin part on the Second Circuit’s decisionin Tilton to reverse a district court rulingexercising jurisdiction over constitutional
challenges to pending SEC administrative
enforcement proceedings. Hill v. SEC, 825
F.3d 1236 (11th Cir. 2016) (Pryor, J.).

Other Noteworthy Circuit
Court Decisions
Second Circuit: Breach of Contract
Can Only Serve as the Basis for a
Fraud Claim If There Is Proof of
Fraudulent Intent at the Time ofContract Execution
On May 23, 2016, the Second Circuit
considered the question of when a breachof contract can “also support a claim forfraud[.]” United States v. Countrywide Home
Loans, 822 F.3d 650 (2016) (Wesley, J.). The
Second Circuit held that “where allegedly
fraudulent misrepresentations are promises
made in a contract, a party claiming fraud
must prove fraudulent intent at the time ofcontract execution; evidence of a subsequent,
willful breach cannot sustain the claim.”

Second Circuit: Criminal
Convictions Under Section 206 of
the Investment Advisers Act Do Not
Require Proof of Intent to Harm
Section 206 of the Investment Advisers Act
prohibits investment advisers from engaging
in certain types of transactions, including“any device, scheme, or artifice to defraud any
client or prospective client.” The Act provides
for criminal penalties against anyone who“willfully violates” its provisions.
On May 4, 2016, the Second Circuit held acriminal conviction premised on a violation ofSection 206 does not require proof of intent toharm. United States v. Tagliaferri, 820 F.3d
568 (2d Cir. 2016) (per curiam). Rather, theSecond Circuit held “the willfulness mental
state” for criminal convictions under Section
206 only requires the Government to prove“the defendant acted with knowledge that his
conduct was unlawful.” The Second Circuitemphasized that “[S]ection 206 prohibits
not only common-law fraud by investment
advisers but also any practice which operates
as a fraud or deceit.”

Seventh Circuit: Applies theDelaware Chancery Court’s Trulia
Decision and Rejects a DisclosureOnly Settlement
Earlier this year, the Delaware Chancery
Court indicated that disclosure-only
settlements would likely be met with
continued disfavor “unless the supplemental
disclosures address a plainly material
misrepresentation or omission.” In re Trulia,
Inc. Stockholder Litig., 129 A.3d 884 (Del. Ch.
2016).
On August 10, 2016, the Seventh Circuit
explicitly “endorse[d], and appl[ied]” theDelaware Chancery Court’s decision in
Trulia to reverse district court approvalof a disclosure-only settlement basedon the Seventh Circuit’s finding thatthe supplemental disclosures provided“nonexistent” benefits to the class. In re
Walgreen Co. Stockholder Litig., 832 F.3d
718 (7th Cir. 2016) (Posner, J.). The Seventh
Circuit stated that supplemental disclosures
must not only “address the misrepresentationor omissions” but also “must correct them”
for a disclosure-only settlement to merit
court approval.

13

Eighth Circuit: Court Reverses Class
Certification in Best Buy Action,
Holding Defendants Successfully
Rebutted the Basic Presumption
with “Overwhelming Evidence”
That the Alleged Misstatements
Had No Price Impact
In Halliburton v. Erica P. John Fund, 134 S.
Ct. 2398 (2014), the Supreme Court held that
“defendants must be afforded an opportunity
before class certification to defeat the[fraud-on-the-market] presumption throughevidence that an alleged misrepresentation
did not actually affect the market price ofthe stock.”
On April 12, 2016, in the first circuit court
opinion to apply Halliburton in considering
defendants’ price impact evidence, theEighth Circuit reversed a district court
decision granting class certification in asecurities fraud action against Best Buy.10
IBEW Local 98 Pension Fund v. Best Buy
Co., 818 F.3d 775 (8th Cir. 2016) (Loken, J.).
The Eighth Circuit held that defendants had
successfully rebutted the fraud-on-the-market
presumption by presenting “overwhelming
evidence” that the alleged misstatements
had no impact on Best Buy’s share price. The
Eighth Circuit further held that the district
court had “misapplied the price impact
analysis mandated by” Halliburton and“abused its discretion” in certifying the class.

Ninth Circuit: (1) Rule 13a- 14
Provides the SEC with a Causeof Action Against Executives
Who Certify False or Misleading
Statements, and (2) SOX 304’s
Disgorgement Provisions Require
Only Issuer Misconduct, Not
Personal Misconduct by the CEO
or CFO
Pursuant to Rule 13a-14 of the Securities
Exchange Act, an issuer’s CEO and CFO mustcertify the accuracy of the issuer’s financial
reports filed with the SEC. On August 31,
2016, the Ninth Circuit held Rule 13a-14“provides the SEC with a cause of action
not only against CEOs and CFOs who do
not file the required certifications, but also
against CEOs and CFOs who certify false or

10. Simpson Thacher represents Best Buy and several of its
executives in this action.

misleading statements.” SEC v. Jensen, 835
F.3d 1100 (9th Cir. 2016) (Clifton, J.).
The Ninth Circuit also considered the reachof Section 304 of the Sarbanes-Oxley Act(“SOX 304”), which permits the SEC toseek disgorgement of certain CEO and CFO
compensation and stock sale profits when theissuer is required to prepare an accounting
restatement “as a result of misconduct.” The
Ninth Circuit held SOX 304’s disgorgement
remedy “applies regardless of whether arestatement was caused by the personal
misconduct of an issuer’s CEO and CFO or
by other issuer misconduct.” Jensen, 835
F.3d 1100.

Significant New York Court ofAppeals Decisions
New York Court of Appeals:
Adopting Delaware’s MFWStandard, Court Holds Business
Judgment Rule Applies to GoingPrivate Mergers Conditioned on
Independent Committee Approval
and the Informed Voluntary Vote ofa Majority of Minority Stockholders
In Kahn v M&F Worldwide Corp., 88 A.3d635 (Del. 2014) (MFW), the Delaware
Supreme Court held “business judgment is
the standard of review that should govern
mergers between a controlling stockholder
and its corporate subsidiary, where themerger is conditioned ab initio upon boththe approval of an independent, adequatelyempowered [s]pecial [c]ommittee that
fulfills its duty of care; and the uncoerced,
informed vote of a majority of theminority stockholders.”
On May 5, 2016, the New York Court ofAppeals adopted the MFW standard forgoing-private mergers. In re Kenneth Cole14

Prod. S’holder Litig., 27 N.Y. 3d 268 (N.Y.
2016) (Stein, J.). The Court of Appeals found“the MFW standard properly considers
the rights of minority shareholders . . . andbalances them against the interests ofdirectors and controlling shareholders in
avoiding frivolous litigation and protecting
independently-made business decisions fromunwarranted judicial interference.”

New York Court of Appeals: NewYork’s Common Interest Doctrine
Only Protects Attorney-Client
Communications Disclosed to a
Third Party in Connection with a
Common Legal Interest in Pendingor Anticipated Litigation
Pursuant to the common interest doctrine,“an attorney-client communication that is
disclosed to a third party remains privileged if

the third party shares a common legal interest
with the client who made the communicationand the communication is made infurtherance of that common legal interest.”
Ambac Assurance Corp. v. Countrywide
Home Loans, 27 N.Y.3d 616 (N.Y. 2016)(Pigott, J.).
On June 9, 2016, the New York Court ofAppeals held that New York’s common
interest doctrine only applies if the attorneyclient communications were shared with athird party “in furtherance of a common legal
interest in pending or reasonably anticipatedlitigation” (emphasis added). Significantly,
the court found New York’s common interest
doctrine inapplicable to attorney-client
communications shared by entities with“a common legal interest in a commercial
transaction or other common problem” where
those entities “do not reasonably anticipate
litigation.”

The Securities Law Alertis edited by Paul C. Gluckow
pgluckow@stblaw.com /+1-212-455-2653, Peter E. Kazanoffpkazanoff@stblaw.com /+1-212-4553525 and Jonathan K. Youngwood
jyoungwood@stblaw.com /+1-212-455-3539.

15

New York

Los Angeles

Paul C. Curnin+1-212-455-2519
pcurnin@stblaw.com

Lynn K. Neuner+1-212-455-2696
lneuner@stblaw.com

Michael D. Kibler+1-310-407-7515
mkibler@stblaw.com

Michael J. Garvey+1-212-455-7358
mgarvey@stblaw.com

Thomas C. Rice
+1-212-455-3040
trice@stblaw.com

Chet A. Kronenberg+1-310-407-7557
ckronenberg@stblaw.com

Susannah S. Geltman+1-212-455-2762
sgeltman@stblaw.com

Mark J. Stein+1-212-455-2310
mstein@stblaw.com

Palo AltoPaul C. Gluckow+1-212-455-2653
pgluckow@stblaw.com

Alan C. Turner+1-212-455-2472
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Nicholas S. Goldin+1-212-455-3685
ngoldin@stblaw.com

Craig S. Waldman+1-212-455-2881
cwaldman@stblaw.com

Peter E. Kazanoff+1-212-455-3525
pkazanoff@stblaw.com

George S. Wang
+1-212-455-2228
gwang@stblaw.com

Joshua A. Levine+1-212-455-7694
jlevine@stblaw.com

David J. Woll
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dwoll@stblaw.com

Joseph M. McLaughlin+1-212-455-3242
jmclaughlin@stblaw.com

Jonathan K. Youngwood+1-212-455-3539
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Alexis S. Coll-Very+1-650-251-5201
acoll-very@stblaw.com
James G. Kreissman+1-650-251-5080
jkreissman@stblaw.com

Washington, D.C.
Peter H. Bresnan+1-202-636-5569
pbresnan@stblaw.com
Jeffrey H. Knox
+1-202-636-5532
jeffrey.knox@stblaw.com
Cheryl J. Scarboro+1-202-636-5529
cscarboro@stblaw.com
Peter C. Thomas+1-202-636-5535
pthomas@stblaw.com

The contents of this publication are for informational purposes only. Neither this publication nor the
lawyers who authored it are rendering legal or other professional advice or opinions on specific facts
or matters, nor does the distribution of this publication to any person constitute the establishment of an
attorney-client relationship. Simpson Thacher & Bartlett LLP assumes no liability in connection withthe use of this publication. Please contact your relationship partner if we can be of assistance regardingthese important developments. The names and office locations of all of our partners, as well as ourrecent memoranda, can be obtained from our website, www.simpsonthacher.com.
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