On April 10, 2026, International Business Machines Corporation (IBM) became the first company to settle with the Trump Administration to resolve allegations that it violated the False Claims Acts (FCA) by implementing diversity, equity, and inclusion (DEI) as part of its hiring practices.  As we have discussed in prior posts, this Administration has clearly signaled that it would use the FCA as part of its an anti-DEI campaign and that, as of late 2025, the DOJ had already launched investigations of DEI consideration in hiring or promotion at major U.S. companies.  

Continue Reading The IBM DEI False Claims Act Settlement and the D&O Risk Implications

The D&O Diary is on assignment this week in Europe, with the first stop in the German city of Frankfurt. Frankfurt is the premier financial hub of continental Europe, serving as the seat of the European Central Bank and the heart of the German banking industry. I always enjoy visiting Frankfurt, but there was something about this visit in particular that made me reflect on how much my views about Germany have changed over the years — and how much I enjoy visiting Germany — as discussed below.

My primary reason for traveling to Frankfurt was to participate once again as a panelist in the DRRT law firm’s annual Global Loss Recovery Conference. I have participated in this event several times before; it is one of my favorite events, for this simple reason that no one learns more than I do. As has been the case in prior years, I participated in the event’s opening session, in which DRRT’s Managing Partner Alexander Reus and I discussed the current hot topics in the world of global corporate and securities litigation. I would like to thank Alexander and his colleagues for inviting me to participate in this event again, which I should add is first class in every way. I am both grateful and honored to be invited to participate in this event.

The annual DRRT event is held at the beautiful Sofitel in Frankfurt. The event is always well-attended, although this year, many registered attendees and even speakers were unable to make it to the event due to a strike involving workers at Lufthansa.
Here’s a picture with my good friend Alexander Reus of the DRRT law firm. I always enjoy our annual Hot Topics panel. The reason it is so successful is that we disagree about pretty much everything. Respect, Alexander. Respect.
One of the things I love about Frankfurt is that the city is totally transparent about fact that it is all about banking. Exhibit A is this statute, the Euro Skulptur, which is unabashedly a huge statute of a Euro sign, posted in the middle of the Frankfurter Bankenviertel (that is, the city’s banking district). The thing I really love about this sculpture is that almost as soon as it was erected, a huge fight broke out about who was going to pay for maintaining the thing. I mean, seriously, who wants to pay to maintain a gigantic euro sign?

The conference day turned out to be an absolutely gorgeous spring day. So, as soon as the day’s events were over, I went out to enjoy the day, the city, and the sunshine. I took the U-Bahn just a few stops to the south side of the River Main, to the Sachsenhausen district, where I knew, from prior experience, that there are places that would be pleasant to visit on a sunny April afternoon.

Spring sunshine in the Sachsenhausen district, on the south side of the Main River.
Flowering trees in bloom in the afternoon sunshine in Sachsenhausen.
At a sidewalk cafe in Alt-Sachsenhausen. Just about a perfect place to enjoy the spring sunshine. The area is sometimes referred to as the Apfelweinviertel, because of the availability in the district of the local specialty — Apple Wine. On prior visits, I have sampled the wine, but I confess it is a little too sweet for my tastes. On the other hand, the local beer works just fine for me.

This is the point at which I need to share how much my views about Germany have changed since I first began visiting the country several decades ago. Sitting at the sidewalk cafe in the April afternoon sunshine made me contemplative, I guess. I confess, with embarrassment, that before my first visit to the country, I had a negative impression of Germany. However, from my very first visit, I learned that my impression was totally wrong.

On my first visit to Germany nearly forty years ago, I travelled to Frankfurt. I arrived on the overnight flight, and after checking into my hotel, I went to a café, bleary-eyed and jet-lagged. The waitress who greeted me and took my order was beautiful. Her face looked to me like a field of wildflowers in bright spring sunshine. Her face shone. It gave me joy. You know this is true because forty years later I am still testifying to how she looked to me.

But it isn’t just her beauty that stays with me. It was her voice. And, more to the point, it was her language. Yes. I am talking about the German language. I confess that I once laughed at the stupid “joke” that was current at the time: that a gentleman speaks English to his wife, French to his mistress, and German to his horse. Ha, ha, very funny. Only, when this beautiful women spoke in her language to me, it was the music of the angels. It was birds singing in the first light of dawn. It was a revelation. Everything I thought I knew about the language, and indeed, as it has turned out over the course of many years, about the country, was wrong. Just wrong.

Since that time I have been to Germany many times. I have been to many Germany cities, including Hamburg, Munich, Berlin, Cologne, Düsseldorf, even Freiburg (and many other German cities as well). Here’s the thing I suspect a lot of Americans don’t know — Germany is actually a really great place to visit. Starting with that first meeting with the beautiful women I encountered so many years ago, I have found the German people welcoming and friendly. The country is full of beautful places to visit and interesting things to see. Also, good beer.

Just an aside. It strikes me now in reflecting upon encountering the beautiful German woman so many years ago that she is now in her sixties. I am not getting any younger either. The days go slowly but the years go fast.

This is the Eschenheimer Turm. The tower, which was located across the street from my hotel, is the remnant of a 15th century gate in the city’s medieval walls. It is today one of the city’s most distinctive land marks, a symbol of its resilience and historical pride.

My visit to Frankfurt was short. I was soon off to visit other places. I am always glad to have an excuse to visit Frankfurt. It is just one of those places I enjoy visiting.

In February, I noted an emerging securities litigation trend involving pump-and-dump schemes characterized by thin public float, retail investor participation, and the amplifying effects of social media. Three subsequent pump-and-dump securities filings in February and March 2026, along with a recent federal court ruling involving social media platform liability, provide further evidence that these risks may be accelerating. Taken together, these developments have important implications for D&O liability exposure and for underwriters evaluating risks associated with low-float issuers and companies whose securities trading activity may be influenced by online promotional activity.

Continue Reading Follow-On Developments in Pump-and-Dump Litigation

One of the perennial management liability insurance coverage issues is whether a policy’s contractual liability exclusion precludes coverage for related tort claims filed alongside claims for breach of contract. Often, these issues turn on the specific wording of the exclusion involved. A recent insurance coverage decision from the Northern District of Illinois addressed these issues in the context of an underlying lawsuit involving both a breach of contract claim and a claim for tortious interference with contract. As discussed below, the court concluded, based on the specific language involved, that the exclusion did not preclude coverage for the tortious interference claim.

The Court’s March 31, 2026, opinion can be found here. An April 9, 2026 LinkedIn post about the court’s decision by Paul Curley of the Kaufman, Borgeest & Ryan law firm can be found here.

Continue Reading Contract Exclusion Does Not Bar Coverage for Tortious Interference Claim
Stephen Hourigan

In the following guest post, Stephen Hourigan presents his view that Delaware’s courts have reimagined the role of Corporate Boards’ Audit Committees, yet the D&O insurance underwriting approach has yet to catch up to these changes. Stephen is the Founder and CEO of Penguin AI. We would like to thank Stephen for allowing us to publish his article as a guest post on this site. Here is Stephen’s article.

Continue Reading Guest Post: The Audit Committee: D&O Underwriting is Behind Delaware Law

One of the interesting features of the rise of AI has been the advent of “AI-and” businesses – that is, businesses whose strategy is to apply AI tools to traditional business models. When “AI-and” business results fall short, securities litigation has sometimes followed. In the latest example of this kind of litigation, earlier this week a plaintiff shareholder filed a securities suit against Upstart Holdings, a company whose business model involves applying AI tools to traditional credit rating and lending services, after the results from the company’s AI-updated credit rating tool disappointed investors. A copy of the new Upstart Holdings complaint can be found here.

Continue Reading Lending Platform Hit with AI-Related Securities Suit

In recent years, leveraged buyouts have once again become a significant source of corporate and securities litigation risk, particularly where founder‑led or controller‑influenced companies pursue take‑private transactions with private equity sponsors. A newly filed Delaware Chancery Court complaint arising out of the 2025 take-private of Skechers U.S.A., Inc. (the “Skechers Complaint”) provides a timely example. The Skechers Complaint illustrates how these transactions can give rise to fiduciary duty claims, especially when minority stockholders allege that a controlling stockholder influenced both the timing and structure of a transaction to their own benefit. The case may also offer a useful lens through which to examine how recent developments in Delaware statutory and case law may affect the standard of review applicable to controller-led transactions.

Continue Reading A Delaware Take-Private Suit and Controller Buyout D&O Risk

One of the more interesting recent developments in the world of directors’ and officers’ liability and insurance has been the rise of collective actions and mass actions outside the U.S. Class actions are of course a well-established part of the litigation scene in the U.S., but at least traditionally class, mass, or collective actions have been rare outside the U.S. However, as discussed in a December 29, 2025, memo from the Labaton Keller Sucharow law firm entitled “Global Class Action Litigation: Causes, Effects and What’s Next” (here) a variety of changes in a number of jurisdictions has led to an increase in collective litigation outside the U.S., a development that could have important future implications for potential D&O liability.

Continue Reading The Continuing Rise of Collective and Mass Actions Outside the U.S.

As readers of this blog know, enforcement activity under the False Claims Act (FCA) has continued to expand, particularly in light of the Trump Administration’s recent efforts to prioritize fraud enforcement through its Task Force to Eliminate Fraud. At the same time, a new development may fundamentally alter the FCA enforcement landscape. On March 21, 2026, Eli Lilly and Company filed a petition for a writ of certiorari asking the United States Supreme Court to declare the FCA’s qui tam provisions unconstitutional (Eli Lilly Writ or Writ). 

Continue Reading A Writ Challenging Qui Tam and D&O Implications

In an interesting decision analzing how a D&O run-off policy’s Subsequent Acts Exclusion operates, a New York federal district court has ruled that acts after the cut-off date that aren’t unlawful don’t preclude coverage for an underlying claim based on alleged misrepresentations made before the cut-off date. Judge Jed Rakoff’s March 13, 2026, decision in the case, applying New York law, can be found here. A March 18, 2026 post about the decision on the Pillsbury law firm’s Policyholder Pulse blog can be found here.

Continue Reading Later Acts that are Not “Wrongful” Don’t Bar D&O Run-Off Coverage