Benjamin Edwards
Nancy Rapoport

In the following guest post, Professors Benjamin Edwards and Nancy B. Rapoport, of Boyd School of Law, UNLV, present their views that a corporate law loophole in advancement and indemnification rules can force companies to pay exorbitant legal fees and even unreasonable personal expenses for directors’ defenses. The authors contend that courts should impose stricter scrutiny to prevent unethical billing practices and protect shareholders. We would like to thank Ben and Nancy for allowing us to publish their article as a guest post on this site. Here is their article.

Continue Reading Guest Post: Legal Fees and Expenses Gone Wild Thanks to a Corporate Law Loophole

Artificial intelligence-related securities litigation continues to accelerate, with plaintiffs increasingly targeting not only alleged misstatements about AI products and capabilities, but also companies’ disclosures regarding their investments in AI and the impact of those investments on business operations.  A couple of recently filed lawsuits challenge AI-related spending and capital allocation decisions, which may underscore whether growing investor scrutiny of whether management adequately disclosed the financial risks, costs, and tradeoffs associated with aggressive AI initiatives.

Continue Reading Another AI Spending-Related Securities Class Action

One of the most urgent current issues in the D&O insurance marketplace is the question of how artificial intelligence (AI) will impact the D&O liability and insurance landscape. In order to get a sense of the industry’s current thinking on AI-related issues, The D&O Diary, in collaboration with Allianz Commercial, recently prepared and distributed a survey seeking readers’ views on several AI-related topics.

The survey drew 250 responses from industry professionals located in the United States, Germany, the United Kingdom, Canada, and 21 other countries. The strong response provides a detailed picture of how the insurance industry views this new and challenging technological frontier.

Continue Reading Industry Survey Results: AI’s Impact on D&O Liability and Insurance

In recent years, the D&O Diary has followed the growing debate over whether companies should reincorporate outside Delaware, particularly in states such as Nevada and Texas.  We have also followed Delaware’s efforts to address the trend through measures including the enactment of SB 21 and the Delaware Supreme Court’s decision upholding the statute.

And we queried whether DExit could prove to be a new source of D&O exposure. A newly amended class action complaint against Dropbox may provide yet another example of that risk, as shareholders are challenging Dropbox’s reincorporation to Nevada, alleging that the move was undertaken to protect management and the controlling stockholder from accountability for underlying business and governance decisions.

Continue Reading Dropbox Derivative Suit Over a DExit

As we have previously noted (most recently, here), geopolitical issues represent an increasingly important source of D&O risk. A lawsuit filed late last week against the fuel cell and power generation firm Bloom Energy highlights this developing source of risk. In the new complaint, a plaintiff shareholder alleges that the company understated its supply chain exposure to China and understated the extent of its reliance on China for a specific rare earth element, scandium. The company’s share price declined after a short seller’s media outlet published a report claiming that the company was, in fact, reliant on Chinese scandium. A copy of the new complaint against Bloom Energy can be found here.

Continue Reading Geopolitical Issues Lead to Securities Suit Against Fuel Cell Company
Ben Dubin

In the following guest post, Ben Dubin, Managing Memberof VC Expert Services, LLC, examines Vice Chancellor Laster’s May 2026 opinion in the Zync v. Porsche case, a decision that highlights the legal and D&O insurance risks for investor-appointed directors and their sponsoring venture firms, particularly when directors are accused of acting as agents of the investor rather than exercising independent fiduciary judgment on behalf of the company. This post is the second of two guest post from Ben discussing D&O risks associated with venture capital board seats. Ben’s prior post on the topic can be found here. We would like to thank Ben for allowing us to publish his articles as guest posts on this site. Here is Ben’s article.

Continue Reading Guest Post: Zync v. Porsche and the D&O Risks of VC Board Seats

In its July 29, 2026, report on first half securities class action lawsuit filings (here), Cornerstone Research explained the increased levels of 1H26 securities suit filings as being due in significant part to “a surge in litigation involving artificial intelligence-related claims .” In the latest example of this type of AI-related securities litigation, as well as an example of the kinds of allegations that can lead to these kinds of suits, late last week a plaintiff shareholder sued Israeli cloud web development platform company Wix.com, alleging the company had overstated its AI-related capabilities and prospects, while understating its AI-related costs. A copy of the July 24, 2026 complaint can be found here.

Continue Reading AI-Related Securities Suit Hits Israeli Web Development Platform

The wave of litigation involving private credit continues to expand. FS KKR Capital Corp. (“FSK”), one of the largest publicly traded business development companies (“BDCs”), is already defending a securities class action lawsuit (KKR SCA) alleging that it overstated asset valuations and misrepresented the effectiveness of its efforts to address troubled portfolio companies. On July 15, 2026, a shareholder of FSK filed a separate derivative lawsuit against the company’s external investment adviser, FS/KKR Advisor, LLC (FS/KKR), alleging that the adviser extracted grossly excessive advisory fees in violation of its fiduciary duties under Section 36(b) of the Investment Company Act of 1940.

Continue Reading Another Private Credit Excessive Fee Lawsuit

Many of us are still trying to get comfortable with the idea of autonomous vehicles. Turns out, we may soon need to get comfortable with the idea of autonomous companies.

A first-of-its-kind draft bill has been proposed to the Delaware legislature that would allow the creation of an Artificial Intelligence Company (AIC), a form of legal personhood for an entity that operates through an AI agent with no human at the controls, and with the same kind of limited liability for the entity’s owners as for a more traditional company.  

As discussed below, the proposed new AIC corporate form raises some very interesting questions. It also arguably represents an entirely new challenge for the D&O insurance industry.

Continue Reading Brave New World: Delaware’s Proposed New “Artificial Intelligence Company”

D&O Diary readers are aware of a growing trend over the past year: an increasing number of securities class actions arising from alleged market manipulation involving low-float public companies. These cases, ranging from pump-and-dump and spoofing schemes to stock promotion claims, now also include a lawsuit filed this week against Megan Holdings Limited (Megan), whose share price allegedly surged more than 400% in one month before plunging over 93% in a single trading day. The company, headquartered in Malaysia, develops, constructs, and maintains aquaculture farms and related infrastructure. 

Continue Reading Pump-and-Dump Securities Suit Adds to Growing Market Manipulation Litigation Trend