The race to fund the artificial intelligence buildout has become one of the defining corporate stories of the current market cycle. As The D&O Diary has previously noted, companies are committing unprecedented resources to AI infrastructure and related investments to try to develop or maintain a competitive advantage.

A newly filed shareholder lawsuit against Meta Platforms (Meta) illustrates how the enormous capital demands associated with an artificial intelligence buildout can intersect with traditional corporate governance concerns. On October 27, 2026, Meta shareholders filed a putative class action in the Delaware Court of Chancery against Mark Zuckerberg and the company’s directors seeking to enjoin a newly approved recapitalization creating a class of non-voting shares. The action was filed shortly after Meta announced plans for a potentially record-setting capital raise intended in part to fund its AI expansion. Rather than focus on AI-related disclosures, products, or business practices, as such, the lawsuit challenges a governance transaction that Meta has defended as providing the flexibility necessary to pursue its long-term AI investment strategy.

Continue Reading Meta’s AI Capital Raise Plan Draws Delaware Fiduciary Duty Challenge

The latest episode of The D&O Diary podcast is now available. In this episode we welcome Jeroen van Kwawegen, co-founding partner of the  Johnson Van Kwawegen law firm and one of the leading attorneys representing institutional investors and shareholder plaintiffs in securities litigation, shareholder derivative actions, and other complex corporate governance disputes.

As a lawyer who has been involved in many of the most significant investor and shareholder cases in recent years, Jeroen offers a valuable perspective on the current state of securities and corporate governance litigation, as well as the trends that may shape future shareholder claims.

Among other topics, we discuss developments in the securities class action landscape, evolving corporate governance challenges, and the impact of recent legislative and regulatory developments on investor rights and corporate accountability. We also examine the SEC’s shifting priorities, ongoing debates surrounding mandatory arbitration and public company reporting requirements, and how advances in artificial intelligence may affect both companies and the plaintiffs’ bar.

Looking ahead, Jeroen shares his views on potential AI-related securities litigation, the implications of a possible market correction, and the issues that public companies, their directors and officers, investors, and D&O insurers should be watching most closely.

One of the most interesting aspects of this podcast is the opportunity it provides to hear directly from a prominent shareholder plaintiffs’ attorney about the factors that drive securities and fiduciary duty litigation, how the plaintiffs’ bar is adapting to changing market conditions, and where future litigation may emerge.

Jeroen’s observations are thoughtful, candid, and perceptive throughout. We are very grateful to him for joining us for this conversation.

We hope you enjoy the episode.

🎧 Listen now on:

Apple Podcasts: https://podcasts.apple.com/us/podcast/the-d-o-diary-podcast/id1896880954?i=1000800303657

Spotify: https://open.spotify.com/episode/6cKazhUK21W9ykBSDq3r8k?si=72d58ed91f184ffd

YouTube: https://youtu.be/BrizHVXkgsE

Dr. Gleb Tsipursky, PhD

In the following guest post, Gleb Tsipursky, PhD, examines how recent research involving advanced AI systems may inform corporate governance, cyber-risk oversight, and enterprise risk management. As he explains, the findings highlight emerging challenges for boards and executives charged with overseeing AI deployment, information security, and organizational controls. Drawing on original OpenAI and METR research, as well as the NACD’s 2026 Director’s Handbook on Cyber-Risk Oversight, he discusses the lessons these developments may hold for directors, officers, risk professionals, and insurers. Our thanks to Gleb for allowing us to publish his article on our site.

Continue Reading The Board’s Next AI Question: Show Me the Stop-Test Evidence

The D&O Diary has continued to follow the growing number of securities lawsuits alleging that companies understated the impact of tariffs, sanctions, and other geopolitical developments on their business and financial results. A newly filed securities class action lawsuit arising out of the take-private acquisition of Skechers USA, Inc. presents an interesting twist on that increasingly familiar theme. Rather than alleging that the company downplayed tariff-related risks, the plaintiffs contend that Skechers overstated the anticipated impact of tariffs in order to support lower financial projections, justify a reduced valuation, and ultimately facilitate a take-private transaction at a price that allegedly undervalued the company.

Continue Reading Tariff Risk Was Used to Depress Deal Value, New Securities Suit Alleges

The continued expansion of the False Claims Act (FCA) as a governmental enforcement mechanism presents growing liability and insurance coverage challenges for companies and their insurers. In the current environment, a September 29, 2026, federal district court decision represents a significant policyholder victory in a coverage dispute arising from a DOJ investigation, Civil Investigative Demands (CIDs), and a related FCA qui tam action. The court held that coverage was available to public-sector consulting company Guidehouse, Inc., under its Technology and Professional Liability policy for defense costs, a $7.6 million settlement, and expenses incurred in responding to CIDs.

Continue Reading District Court Upholds Coverage for FCA Investigation and Settlement

Over the past couple of years, The D&O Diary has followed the growing “DExit” movement, including the increasing number of public companies that have either reincorporated outside Delaware or publicly explored doing so, and the resulting implications for corporate governance, shareholder litigation, and D&O risk.

To date, a key unanswered question has been whether changing a company’s state of incorporation would meaningfully alter litigation exposure in practice. An October 2, 2026, decision by the Texas Business Court involving Coinbase may be the first significant indication that it can.  A copy of the Coinbase decision can be found here.

At the same time, an October 23, 2026, Delaware Chancery Court opinion approving the $250 million settlement of the long-running Activision Blizzard merger litigation underscores a parallel development: even as some companies depart Delaware, Delaware courts continue to preside over some of the largest and most consequential shareholder cases in the country. Indeed, Chancellor Kathaleen McCormick described the Activision settlement as the largest cash recovery ever obtained in Delaware Court of Chancery litigation challenging a third-party merger. A copy of the Chancery Court’s approval of settlement and attorneys’ fees can be found here.

Continue Reading Texas Courts Begin to Define the Consequences of Reincorporation

The SEC has not yet released an official report of SEC Enforcement activity for Fiscal Year (FY) 2026, which ended September 30, 2026, but several other independent sources have released their own analyses. The numbers reflected in the independent sources’ report vary, but they are directionally consistent – they all show significantly reduced SEC enforcement activity in FY 2026, the agency’s first full year under current Chair Paul Atkins. As discussed below, reduced enforcement numbers may be interpreted in varying ways, but the lower FY2026 enforcement numbers do have important implications.

Continue Reading Reduced SEC Enforcement Activity in the 2026 Fiscal Year

The D&O Diary has been closely following the Department of Justice’s increasing use of the False Claims Act (FCA) as an enforcement tool, including in areas involving cybersecurity compliance, DEI, tariffs, and other regulatory priorities. A recurring concern for companies, directors and officers is that FCA investigations and settlements can serve as the predicate for follow-on securities suits based on alleged disclosure failures.

Continue Reading Honeywell Aerospace Hit with Securities Suit Following FCA Cybersecurity Settlement

In the following guest post, Evan Bundschuh considers whether recent developments in corporate governance and D&O insurance policy design are altering the traditional role of standalone Side A Difference-in-Conditions (DIC) insurance. Evolving policy forms and changing liability exposures raise important questions about the continuing role and value of standalone Side A DIC coverage. The article includes contributions from The D&O Diary co-author Sarah Abrams. Evan is Vice President at GB&A, a retail insurance brokerage in New York. Our thanks to Evan for allowing us to publish the article on this site. Here is the article.

Continue Reading Has Side A DIC Risk Changed? Broader D&O Coverage and Emerging Exposures 

What began as regulatory inquiries involving Los Angeles Dodgers (and until recently Los Angeles Lakers) owner Mark Walter and affiliated insurance companies has now expanded into civil litigation, bringing renewed attention to private credit investments, related-party transactions, and disclosure practices. A proposed class action lawsuit filed in the Southern District of Florida against Walter and various affiliated businesses alleges that purchasers of annuity products issued by Delaware Life Insurance Company did not receive material information regarding related-party investments and an ongoing federal investigation. A copy of the September 16, 2026, complaint can be found here.

Continue Reading From Investigation to Litigation: Private Credit Scrutiny Fuels New Claims