lawfultruth

[lawfultruth]

Multiplied and Parallel Litigation: The Mess that Cyan has Wrought

As observers have discussed the kinds of problems that the U.S. Supreme Court’s Cyan decision can create, specific concerns have included the possibility of parallel state and federal court litigation, and even the possibility of parallel litigation in multiple states. In the course of the discussion of these issues, these litigation risks might have seemed merely theoretical. However, a series of lawsuits filed against a recent IPO company show that these kinds of multiple and parallel litigation risks are far from merely theoretical. The raft of jurisdictionally complicated litigation the company now faces shows the extent of the problems that Cyan creates. The company’s situation also underscores the dramatic need for Congress to address revise the securities laws in order to prevent these kinds of situations.

  Background Regarding Cyan

As discussed here, in March 2018, the U.S. Supreme Court unanimously held in the Cyan, Inc. v. Beaver County Employees Retirement Fund that state court retain concurrent jurisdiction over liability actions filed under the Securities Act of 1933, and that ’33 Act liability actions filed in state court cannot be removed to federal court.

  The Supreme Court’s holding means that a prospective ’33 Act claimant has a choice whether to file his or her lawsuit in either federal or state court. It also means that different claimants might chose to file in state court or in federal court. The most significant potential impact from this holding is on IPO companies, although as I have emphasized in prior blog post, the Cyan decision could also affect companies conducting follow-on or secondary offerings as well.

  SmileDirectClub’s IPO 

SmileDirectClub is a direct-to-consumer company that manufactures and markets clear dental alignment treatments. In September 2019, the company completed an initial public offering in which it sold raised approximately $1.27 billion net of various expenses. The company’s shares began trading on NASDAQ on September 12, 2019.

  Underlying Trade Practices Litigation

On September 24, 2019, a number of plaintiff doctors filed a lawsuit in the Middle District of Tennessee on behalf of a putative class of dentists, orthodontists, and consumers. Among other things, the complaint in the lawsuit alleges false advertising, fraud, negligence, and deceptive trade practices. The complaint alleges a variety of supposed improper practices, including with respect to regulatory compliance, with respect to the company’s marketing of the dental alignment treatments. The complaint also alleges a number of consumer complaints regarding the treatments. The complaint also alleges that the company’s offering documents in connection with its IPO “failed to disclose the existence of numerous bona fide complaints” about the company’s practices.

  The IPO-Related Securities Lawsuits

According to the company’s November 14, 2019 quarterly filing with the SEC on Form 10-Q (here), the company has now been hit with a series of IPO-related lawsuits in a number of different jurisdictions:

In September and October 2019, a number of purported stockholder class action complaints were filed against us, members of our board of directors, certain of our current officers, and the underwriters of our IPO. The following  eight complaints have been filed to date: Mancour v. SmileDirectClub, Inc., 19-1169-IV (TN Chancery Court filed 9/27/19), Vang v. SmileDirectClub, Inc., 19c2316 (TN Circuit Court filed 9/30/19), Fernandez v. SmileDirectClub, Inc., 19c2371 (TN Circuit Court filed 10/4/19), Wei Wei v. SmileDirectClub, Inc., 19-1254-III (TN Chancery Court filed 10/18/19), Andre v. SmileDirectClub, Inc., 19-cv-12883 (E.D. Mich. filed 10/2/19), Ginsberg v. SmileDirectClub, Inc., 19-cv-09794 (S.D.N.Y. filed 10/23/19), Ginsberg v. SmileDirectClub, Inc., 19-cv-962 (M.D. Tenn. filed 10/29/19), Nurlybayev v. SmileDirectClub, Inc., 19-177527-CB (Oakland County, MI Circuit Court filed 10/30/19).

The complaints all allege, among other things, that the registration statement filed with the SEC on August 16, 2019, and accompanying amendments, and the Prospectus filed with the SEC on September 13, 2019, in connection with our initial public offering were inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and omitted to state material facts required to be stated therein. The complaints seek unspecified money damages, other equitable relief, and attorneys’ fees and costs. All of the actions are in the preliminary stages. The Company denies any alleged wrongdoing and intends to vigorously defend against these actions.

  For example, the Vang complaint (referenced in the above excerpt from the company’s 10-Q, copy here), filed in the Circuit Court for Davidson County, Tennessee, purports to be filed on behalf of persons who purchased securities in or traceable to the company’s IPO. The complaint names as defendants the company; certain of its directors and officers; and its offering underwriters.

  The Vang complaint refers to the underlying trade practices class action lawsuit previously filed against the company, and  alleges that in the Company’s offering documents, the defendants allegedly failed to disclose to investors, among other things, that the efficacy of the company’s treatment was overstated; that administrative personnel, rather than licensed doctors, provided treatment to company’s customers and monitored their progress, and thus, company’s practices did not qualify as teledentistry under applicable standards; and that, as a result, the company was subject to regulatory scrutiny for the unlicensed practice of dentistry.

  The Vang complaint alleges that between the date of the company’s IPO and the date of the complaint, the company’s share price had declined nearly 44%. The complaint seeks to recover damages on behalf of the IPO investors under Sections 11 and 15 of the Securities Act of 1933.

  As noted in the company’s 10-Q, in addition to at least four Tennessee state court securities class action lawsuits, the company has also been hit with several federal court securities class action lawsuits.

  Thus, on October 2, 1029, a securities class action lawsuit was filed against the company in the Eastern District of Michigan (here). On October 23, 2019, a different plaintiff shareholder filed another federal court IPO-related securities class action lawsuit against the company in the Southern District of New York (here). In addition, on October 29, 2019, another plaintiff shareholder filed a separate federal court IPO-related securities class action lawsuit against the company in the Middle District of Tennessee (here).

  Finally, as the company’s 10-Q also notes, in addition to the Tennessee state court securities class action litigation and the federal court securities class action litigation, the company has also been hit with a securities class action lawsuit filed in Oakland County, Michigan Circuit Court.

  Discussion

The company obviously has been hit with a big heap of IPO-related litigation, which is a complication and concern in and of itself.

  The fact that the company has multiple different lawsuits pending in several different federal courts is messy, but manageable, as the federal rules of civil procedure have mechanisms to consolidate the federal court cases.

  The fact that the company has several lawsuits in Tennessee is also messy, but presumably there are procedures to consolidate the various lawsuits pending in Tennessee courts.

  However, the fact that the company has IPO-related cases pending in federal court and in the courts of two different states is chaotic.

  While there are mechanisms to consolidate cases within the federal court systems, and even to consolidate cases within Tennessee, there are no mechanisms to consolidate cases between the federal court system and the Tennessee state court system. There are no mechanisms to consolidate cases between the federal court system and the Michigan state court system. There are no mechanisms to consolidate cases between the Tennessee state court system and the Michigan state court system.

  As things stand, SmileDirect must now fight a multi-front war. The fact that the defendants must now defend in multiple jurisdictions adds not only complexity and expense, it adds uncertainty and even the possibility of conflicting or inconsistent procedures and decisions. Among other things, one question that will have to be addressed is whether the state courts will apply the discovery stay applicable in federal court. In addition, another question is whether the state courts will apply different pleading standards that those that would be applicable in federal court. On a more practical level, if the time were to come when the defendants might seek to settle this litigation, they will struggle reaching settlements that will resolve claims as to all claimants in all putative classes.

  This is obviously a huge mess. It wasn’t supposed to be this way. The whole idea when Congress passed the Securities Litigation Uniform Standards Act (SLUSA) in 1998 was that class action litigation under the federal securities laws was to go forward in federal court and federal court only. Apparently, and as the Cyan case itself shows, in enacting SLUSA Congress made a hash of it when it comes to the jurisdictional provisions of the ’33 Act. Cyan basically held that notwithstanding SLUSA, the concurrent state court jurisdiction for ’33 Act liability actions remains.

  The last thing in the world Congress intended to do when it enacted SLUSA was to permit the kind of chaotic mess that SmileDirect now faces. On a more general level, without regard to what Congress may or may not have intended in SLUSA, it makes absolutely no sense for a company to have to face what is in effect the same lawsuit in multiple different jurisdictions.

  I suppose one might say that the good news is that this is a problem that Congress could easily address. It was would be relatively simple fix to amend Section 22 of the ’33 Act to eliminate concurrent state court jurisdiction for ’33 Act liability claims and to provide for the removal to federal court of any ’33 Act liability actions that are filed in state court. Whether the potential for Congressional action can actually be considered “good news” depends on how your feel about the likelihood of the current divided and distracted Congress actually taking steps to provide a common sense solution to a totally out of control situation.

  Setting aside the specifics of the Cyan-related issues here, there are a couple of other aspects of this situation that are worth considering. The first is that the company involved here is not the kind of developmental stage biotech IPO company or cutting edge high tech IPO company that typically is thought of as having to worry about the potential impact of Cyan. Even though SmileDirect is not one of these kinds of high-flying companies, it still finds itself caught up in having to deal the jurisdictional morass that Cyan has created.

  The other thing about this overall situation that is worth considering is that SmileDirect has not been sued in state court in California or New York – the states whose courts are usually under discussion when the possibility of state court securities class action litigation is under discussion – but rather has been sued in state courts in Tennessee and Michigan. Which is a reminder that under Cyan, the courts of any of the country’s 50 states can come in to play, magnifying not only the threats involved with multi-jurisdiction litigation but multiplying the risks of conflicting or inconsistent rulings on issues such as the discovery stay, the applicable pleading standard, and so on.

  The bottom line is that Cyan created a big mess. It is a tall order given our dysfunctional Congress, but this really is a situation that Congress needs to address.

  The post Multiplied and Parallel Litigation: The Mess that Cyan has Wrought appeared first on The D&O Diary.

Multiplied and Parallel Litigation: The Mess that Cyan has Wrought syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

Hot and hazy today as bushfire #smoke reduces air quality across several districts. For central parts (inc. #Sydney, #Wollongong and #Newcastle) smoke haze may not ease much until a southerly wind change arrives this evening. See latest alerts from DPIE http://ow.ly/jNuk50xe4bP 

Hot and hazy today as bushfire #smoke reduces air quality across several districts. For central parts (inc. #Sydney, #Wollongong and #Newcastle) smoke haze may not ease much until a southerly wind change arrives this evening.

See latest alerts from DPIE http://ow.ly/jNuk50xe4bP 

Hot and hazy today as bushfire #smoke reduces air quality across several districts. For central parts (inc. #Sydney, #Wollongong and #Newcastle) smoke haze may not ease much until a southerly wind change arrives this evening.

See latest alerts from DPIE http://ow.ly/jNuk50xe4bP  syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

Disaster Welfare Assistance Points open this week. You can access: Disaster Relief Grants and assessments Red Cross Disaster Recovery Chaplains Salvation Army Anglicare and more. #nswbushfires #disasterrecovery #nswfirespic.twitter.com/gumyU9xT8K

Disaster Welfare Assistance Points open this week. You can access:

Disaster Relief Grants and assessments

Red Cross

Disaster Recovery Chaplains

Salvation Army

Anglicare and more.

#nswbushfires #disasterrecovery #nswfires pic.twitter.com/gumyU9xT8K

Disaster Welfare Assistance Points open this week. You can access:

Disaster Relief Grants and assessments Red Cross Disaster Recovery Chaplains Salvation Army Anglicare and more.

#nswbushfires #disasterrecovery #nswfirespic.twitter.com/gumyU9xT8K syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

The best way to help our #NSWBushfires impacted communities is to donate money to one of the many charities or appeals that have been established. Please DO NOT donate physical goods at this time. Consider donating to @salvos @RedCrossAU @VinniesNSW #nswfires #disasterrecoverypic.twitter.com/zib51S2l1J

The best way to help our #NSWBushfires impacted communities is to donate money to one of the many charities or appeals that have been established. Please DO NOT donate physical goods at this time. Consider donating to @salvos @RedCrossAU @VinniesNSW #nswfires #disasterrecovery pic.twitter.com/zib51S2l1J

The best way to help our #NSWBushfires impacted communities is to donate money to one of the many charities or appeals that have been established. Please DO NOT donate physical goods at this time. Consider donating to @salvos @RedCrossAU @VinniesNSW #nswfires #disasterrecoverypic.twitter.com/zib51S2l1J syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

Edition#1 of the community recovery information for the November NSW #bushfires. You or someone you know impacted by the #NSWBushfires? Start your clean-up by reading the latest news: https://lnkd.in/dTAAgyD  #nswrfs #nswfires #disasterrecoverypic.twitter.com/Y9lDDyFV3r

Edition#1 of the community recovery information for the November NSW #bushfires. You or someone you know impacted by the #NSWBushfires? Start your clean-up by reading the latest news: https://lnkd.in/dTAAgyD  #nswrfs #nswfires #disasterrecovery pic.twitter.com/Y9lDDyFV3r

Edition#1 of the community recovery information for the November NSW #bushfires. You or someone you know impacted by the #NSWBushfires? Start your clean-up by reading the latest news: https://lnkd.in/dTAAgyD  #nswrfs #nswfires #disasterrecoverypic.twitter.com/Y9lDDyFV3r syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

The Graffiti Control Act 2008 is now under review, giving you the chance to make your mark on how we deal with graffiti vandals. The Department of Communities and Justice has prepared a discussion paper. Submissions close on 15 December. https://www.dcj.nsw.gov.au/news-and-media/media-releases/make-your-mark-on-graffiti-laws …pic.twitter.com/Ety15toaCf

The Graffiti Control Act 2008 is now under review, giving you the chance to make your mark on how we deal with graffiti vandals.

The Department of Communities and Justice has prepared a discussion paper.

Submissions close on 15 December. https://www.dcj.nsw.gov.au/news-and-media/media-releases/make-your-mark-on-graffiti-laws … pic.twitter.com/Ety15toaCf

The Graffiti Control Act 2008 is now under review, giving you the chance to make your mark on how we deal with graffiti vandals. The Department of Communities and Justice has prepared a discussion paper. Submissions close on 15 December. https://www.dcj.nsw.gov.au/news-and-media/media-releases/make-your-mark-on-graffiti-laws …pic.twitter.com/Ety15toaCf syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

All courts on the Central and Mid-North Coasts, as well as the New England, are operating today. However, we will continue to monitor the weather conditions and bushfire threat across NSW over the next few days.

All courts on the Central and Mid-North Coasts, as well as the New England, are operating today. However, we will continue to monitor the weather conditions and bushfire threat across NSW over the next few days.

All courts on the Central and Mid-North Coasts, as well as the New England, are operating today. However, we will continue to monitor the weather conditions and bushfire threat across NSW over the next few days. syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

All fires across NSW are now at Advice level. At 10am Monday there’s 48 bush or grass fires with 25 uncontained. We’re not out of the woods yet though – heatwave conditions are developing across large parts of the state, so fire dangers will increase. #nswrfs #nswfirespic.twitter.com/tyJkO4o0bv

All fires across NSW are now at Advice level. At 10am Monday there’s 48 bush or grass fires with 25 uncontained. We’re not out of the woods yet though – heatwave conditions are developing across large parts of the state, so fire dangers will increase. #nswrfs #nswfires pic.twitter.com/tyJkO4o0bv

All fires across NSW are now at Advice level. At 10am Monday there’s 48 bush or grass fires with 25 uncontained. We’re not out of the woods yet though – heatwave conditions are developing across large parts of the state, so fire dangers will increase. #nswrfs #nswfirespic.twitter.com/tyJkO4o0bv syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

#NSWRFS Building Impact Assessment teams are continuing their inspection of fire affected communities. In the past fortnight, 421 homes have been destroyed. Around 2000 homes have been spared. Already this fire season, six lives have been lost and 530 homes destroyed. #nswfirespic.twitter.com/c4Hlon64DZ

#NSWRFS Building Impact Assessment teams are continuing their inspection of fire affected communities. In the past fortnight, 421 homes have been destroyed. Around 2000 homes have been spared. Already this fire season, six lives have been lost and 530 homes destroyed.

#nswfires pic.twitter.com/c4Hlon64DZ

#NSWRFS Building Impact Assessment teams are continuing their inspection of fire affected communities. In the past fortnight, 421 homes have been destroyed. Around 2000 homes have been spared. Already this fire season, six lives have been lost and 530 homes destroyed.

#nswfirespic.twitter.com/c4Hlon64DZ syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

Insurer’s Bid to Dismiss Complaint Seeking Cyber Policy Coverage for Payment Instruction Loss Denied

One of the more challenging issues businesses must confront as wrongdoers have turned Internet tools into criminal devices has been the rising threat of payment instruction fraud, or, as it is sometimes called, social engineering fraud. Along with these crimes have come vexing questions of insurance coverage for the ensuing losses. Courts have struggled to determine whether or not payment instruction fraud losses are covered under Crime policies. A recent case in the Southern District of New York raises the question whether a payment instruction fraud loss is covered not under a Crime policy but rather under a Cyber Insurance policy.

  In a November 6, 2019 order (here), Southern District of New York Judge Jed Rakoff, applying Connecticut law, denied the insurer’s motion to dismiss the Cyber Insurance policyholder’s complaint seeking coverage for its payment instruction fraud losses. Judge Rakoff’s ruling in the case raises a number of interesting issues, as discussed below.

  Background Regarding the Underlying Losses

SS&C Technology Holdings is a software and software-enabled services provider. Among its clients was a company called Tillage Commodities Fund. In March 2016, third parties using stolen credentials send e-mailed funds transfer requests to SS&C, falsely claiming to be acting on behalf of Tillage. SS&C processed these requests, over the next three weeks causing over $5.9 million to be transferred from Tillage’s accounts to bank accounts in Hong Kong. SS&C discovered the scheme, alerted Hong Kong authorities, and tried to help Tillage and the authorities recover the funds.

  In September 2016, Tillage initiated a New York state court lawsuit against SS&C. Shortly before the case was scheduled to go to trial, Tillage and SS&C settled the case without any admission of wrongdoing or liability by either party.

  Background Regarding the Insurance Dispute

At relevant times, SS&C maintained a “Specialty Risk Protector” insurance policy with multiple insuring provisions, including Cyber Insurance-related insuring provisions. (A copy of the policy can be found here.) Shortly after discovering that the Tillage funds had been transferred in error, SS&C notified its insurer of the losses and sought coverage. The insurer agreed to provide SS&C defense cost coverage but denied coverage for any indemnity amounts. After the Tillage lawsuit settled, the insurer denied coverage for the settlement amount.

  SS&C filed a lawsuit in the Southern District of New York against the insurer. SS&C’s complaint contained three counts, one alleging breach of contract; a second count seeking a judicial declaration of coverage; and a third count seeking damages for alleged breaches of the covenant of good faith and fair dealing. In response to the complaint, the Insurer filed a motion to dismiss.

  Policy Language at Issue

In support of its coverage position, the insurer relied on the policy’s Exclusion 3(a) which precludes coverage for losses:

  alleging, arising out of, based upon or attributable to a dishonest, fraudulent, criminal or malicious act, error or omissions, or any intentional or knowing violation of the law; provided however, [the Insurer] will defend Suits that allege any of the foregoing conduct, and that are not otherwise excluded, until there is a final judgment or final adjudication against an Insured in a Suit, adverse finding of fact against an Insured in a binding arbitration proceeding or plea of guilty or no contest by an Insured as to such conduct, at which time the Insured shall reimburse [the Insurer] for Defense Costs.

  The November 6, 2019 Ruling

In a relatively brief November 6, 2019 Memorandum Opinion, Judge Rakoff, applying Connecticut Law, largely denied the insurer’s dismissal motion.

  In seeking to have SS&C’s complaint dismissed, the insurer had argued that the coverage preclusionary provision in Exclusion 3(a) applies not only to any “dishonest, fraudulent, criminal or malicious act, error, or omission, or any intentional or knowing violation of the law” committed by SS&C, but also broadly to these kinds of acts committed by third-party fraudsters.

  In rejecting this argument, Judge Rakoff read and interpreted the exclusion as a whole, taking into account the exclusion’s “provided however “ clause. Judge Rakoff said that reading the “provided however” clause with the first clause “clearly indicates that Exclusion 3(a) applies only to dishonest, fraudulent, criminal or malicious acts committed by SS&C.” In that regards, he noted that the “provided however” clause refers specifically to “Suits that allege any of the foregoing against SS&C.” This reading, Judge Rakoff said, “also comports with what the parties most likely intended when the entered into the Policy.” At “the very least,” he said, “ambiguity exists,” and under Connecticut law he must construe the insurance contract in favor of coverage.

  Judge Rakoff also denied the insurer’s motion to have the bad faith claim dismissed. However, he granted the insurer’s motion to dismiss SS&C’s declaratory judgment claim as duplicative of SS&C’s breach of contract complaint.

  Discussion

If nothing else, the magnitude of the losses from SS&C erroneous transfer shows the scale of the issues that can be arise from payment instruction fraud. These kinds of losses represent a serious threat to all businesses, particularly given the pervasiveness of email as a business communication medium.

  As companies have presented these kinds of losses to their insurers, both insurers and the courts have struggled as they have tried to match the question of coverage for these kinds of losses with policy language that was written long before current business practices came into place. Much of the early case law decisions examining the question of insurance coverage for these kinds of losses has involved Crime policies (compare, for example,  a recent Ninth Circuit decision finding a Crime policy did not provide coverage with a recent Second Circuit decision finding the Crime policy did provide coverage).

  This recent decision by Judge Rakoff is one of only a very small number of payment instruction fraud loss coverage rulings involving a policy providing Cyber insurance coverage.

  Judge Rakoff’s ruling denying the insurer’s motion to dismiss is interesting and may give heart to policyholders and their representatives seeking coverage for payment instruction fraud losses under Cyber insurance policies. However, Judge Rakoff’s ruling may be of very limited relevance to other circumstances, and not merely because it was decided under Connecticut law.

  Judge Rakoff’s ruling is very much a reflection of the specific and arguably peculiar language in the Exclusion 3(a) on which the insurer sought to rely. It is not clear at all how this ruling would have gone had there not been the tension in the exclusion’s language between the “provided however” clause and the exclusion’s first clause. The first clause standing alone plausibly could be read to encompass third-party misconduct. In other words, on a different day in a different case involving slightly different policy language, the outcome of the coverage question might turn out differently. This is a very policy language-specific ruling.

  As policyholders and insurers have struggled to figure out the insurance implications of payment instruction fraud losses, one perennial question has been whether these kinds of losses properly belong under Crime policies or Cyber policies. The first line of defense for both Crime and Cyber insurers these days seems to be that their policies provide no coverage for these losses. Crime insurers argue further that the standard Computer Fraud Coverage section in their policies do not apply these kinds of losses since they involve voluntary transfer of funds rather than an intrusion into computer systems. For their part, Cyber insurers argue that their policies were not designed to or intended cover fraudulently induced funds transfers. Given the likelihood for continued losses of this kind, and the likelihood that insurers will continue to try to resist coverage for these losses, these disputes are likely to continue.

  In recent months, insurers seeking to build out their argument that their policies were not intended to cover these kinds of losses have begun offering optional coverage extensions providing social engineering coverage. (This coverage extension may be available from both Crime and Cyber insurers; which policy is the right one to have this extension is a larger topic beyond the scope of this post, but I will say that as a general matter I favor having the extension in the Crime policy rather than the Cyber policy.)

  While this type of affirmative coverage grant might seem welcome, these coverage extensions often come with severely restricted sublimits, often as little as $250,000 or even less. When compared to the kind of losses SS&C’s client sustained here, these kinds of sublimits afford relatively limited protection.

  In an insurance world where insurers are putting all of their effort into trying to avoid coverage for these kinds of losses, companies best risk management approach to these kinds of risks might be around education, internal controls, and process safeguards, to try to ensure that these kinds of losses do not occur in the first place.

  There is one aspect to the payment instruction fraud involved here that is worth considering when it comes to the various social engineering fraud coverage extensions the insurers are offering. Some versions of the extension limit coverage to situations where the fraudster impersonates an officer or employee of the insured company. As the SS&C situation shows, losses can arise not just from the impersonation of a company officer or employee, but can also arise from the impersonation of a customer. Or even a vendor, regulator, lender, outside professional (such as an attorney, accountant, or investment banker). Even though the sublimited coverage represents only a restricted amount of coverage, it is important to ensure that the coverage that is available is constructed to ensure that the coverage will respond in a broad variety of circumstances.

  One final note about Judge Rakoff’s ruling here. Judge Rakoff denied the insurer’s motion to dismiss. But a dismissal motion denial is different than an affirmative determination of coverage. Importantly, his dismissal motion denial does not in any way involve the entry of a judgment in SS&C’s favor. To the contrary, this case is still pending. I can only assume that there are other grounds on which the insurer seeks to deny coverage for SS&C’s losses. This case is potentially a long way from a determination that SS&C’s policy covers the losses.

  To be sure, in light of the dismissal motion ruling, the insurer’s potentially best argument against coverage is now shot and the insurer arguably now has stronger incentive to come to the negotiating table. But the bottom line is that at this point this case is not over and SS&C has not yet won its argument that its policy covers the losses it seeks to recover. The limited nature of the court’s ruling is something that should definitely be kept in mind when the significance of this decision is being discussed.

The post Insurer’s Bid to Dismiss Complaint Seeking Cyber Policy Coverage for Payment Instruction Loss Denied appeared first on The D&O Diary.

Insurer’s Bid to Dismiss Complaint Seeking Cyber Policy Coverage for Payment Instruction Loss Denied syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

EMERGENCY WARNING – Gospers Mountain (Hawkesbury) Fire is spreading quickly. If you’re in the area of Higher MacDonald, Upper MacDonald & Webbs Creek, seek shelter as the fire approaches. Protect yourself from the heat of the fire. #nswrfs #nswfires #alert http://ow.ly/mZcA50xbA9x pic.twitter.com/y1mzY26VIh

EMERGENCY WARNING – Gospers Mountain (Hawkesbury) Fire is spreading quickly. If you’re in the area of Higher MacDonald, Upper MacDonald & Webbs Creek, seek shelter as the fire approaches. Protect yourself from the heat of the fire. #nswrfs #nswfires #alert http://ow.ly/mZcA50xbA9x  pic.twitter.com/y1mzY26VIh

EMERGENCY WARNING – Gospers Mountain (Hawkesbury) Fire is spreading quickly. If you’re in the area of Higher MacDonald, Upper MacDonald & Webbs Creek, seek shelter as the fire approaches. Protect yourself from the heat of the fire. #nswrfs #nswfires #alert http://ow.ly/mZcA50xbA9x pic.twitter.com/y1mzY26VIh syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

#ThankYouThursday Recently we received these beautiful knitted items handmade by clients of Corrective Services NSW. Thank you to the @NSWJustice for encouraging this initiative and helping our clients stay warm!pic.twitter.com/wYFwFinJv3

#ThankYouThursday Recently we received these beautiful knitted items handmade by clients of Corrective Services NSW. Thank you to the @NSWJustice for encouraging this initiative and helping our clients stay warm! pic.twitter.com/wYFwFinJv3

#ThankYouThursday Recently we received these beautiful knitted items handmade by clients of Corrective Services NSW. Thank you to the @NSWJustice for encouraging this initiative and helping our clients stay warm!pic.twitter.com/wYFwFinJv3 syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

#GlenInnes and #Tenterfield courthouses will be closed until Friday 15 November. #NSWbushfires

#GlenInnes and #Tenterfield courthouses will be closed until Friday 15 November. #NSWbushfires

#GlenInnes and #Tenterfield courthouses will be closed until Friday 15 November. #NSWbushfires syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

If fire conditions remain under control the following courts will be open on Thursday – Macksville, Kempsey & Port Macquarie. Taree will be closed. Forster registry is closed, but staff will be on-site to allow court to sit. For enquiries phone Court Services Centre 1300 679 272

If fire conditions remain under control the following courts will be open on Thursday – Macksville, Kempsey & Port Macquarie. Taree will be closed. Forster registry is closed, but staff will be on-site to allow court to sit. For enquiries phone Court Services Centre 1300 679 272

If fire conditions remain under control the following courts will be open on Thursday – Macksville, Kempsey & Port Macquarie. Taree will be closed. Forster registry is closed, but staff will be on-site to allow court to sit. For enquiries phone Court Services Centre 1300 679 272 syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

If you’ve been affected by the #NSWbushfires our lawyers can help with insurance issues, credit & debt, employment, tenancy and social security. Call the LawAccess NSW Disaster Response Hotline on 1800 801 529pic.twitter.com/30DXFRhP5N

If you’ve been affected by the #NSWbushfires our lawyers can help with insurance issues, credit & debt, employment, tenancy and social security. Call the LawAccess NSW Disaster Response Hotline on 1800 801 529 pic.twitter.com/30DXFRhP5N

If you’ve been affected by the #NSWbushfires our lawyers can help with insurance issues, credit & debt, employment, tenancy and social security. Call the LawAccess NSW Disaster Response Hotline on 1800 801 529pic.twitter.com/30DXFRhP5N syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

EMERGENCY WARNING: Gospers Mountain (Lithgow LGA) The fire is moving quickly and spotting ahead of the firefront. If you are in the area of Mellong, St Albans, Putty or Upper MacDonald, monitor conditions and know what you will do if the fire approaches. #nswrfs #nswfires #alertpic.twitter.com/30SojeSYCS

EMERGENCY WARNING: Gospers Mountain (Lithgow LGA) The fire is moving quickly and spotting ahead of the firefront. If you are in the area of Mellong, St Albans, Putty or Upper MacDonald, monitor conditions and know what you will do if the fire approaches. #nswrfs #nswfires #alert pic.twitter.com/30SojeSYCS

EMERGENCY WARNING: Gospers Mountain (Lithgow LGA) The fire is moving quickly and spotting ahead of the firefront. If you are in the area of Mellong, St Albans, Putty or Upper MacDonald, monitor conditions and know what you will do if the fire approaches. #nswrfs #nswfires #alertpic.twitter.com/30SojeSYCS syndicated from https://ronenkurzfeldweb.wordpress.com/

[lawfultruth]

Southerly change has reached #Sydney, with a 69 km/h wind gust at Sydney Airport. The temp dropped from 32.4°C to 20.5°C in 11 mins! The change is yet to reach the firegrounds so the situation remains extremely volatile in these areas. Weather warnings http://ow.ly/fLa650x8tkm pic.twitter.com/WrIhvE1hJo

Southerly change has reached #Sydney, with a 69 km/h wind gust at Sydney Airport. The temp dropped from 32.4°C to 20.5°C in 11 mins!

The change is yet to reach the firegrounds so the situation remains extremely volatile in these areas. Weather warnings http://ow.ly/fLa650x8tkm  pic.twitter.com/WrIhvE1hJo

Southerly change has reached #Sydney, with a 69 km/h wind gust at Sydney Airport. The temp dropped from 32.4°C to 20.5°C in 11 mins!

The change is yet to reach the firegrounds so the situation remains extremely volatile in these areas. Weather warnings http://ow.ly/fLa650x8tkm pic.twitter.com/WrIhvE1hJo syndicated from https://ronenkurzfeldweb.wordpress.com/