Reducing Risk in the Dawn of Equifax and Other Cyber-Related Securities Fraud Class Actions

Public companies face a variety of legal challenges following major cyber events. These challenges increasingly include federal securities class actions, which can expose public companies that experience cyber events to very significant claims for damages from plaintiff shareholders. The recent securities fraud class actions brought against Yahoo!, PayPal, Chegg and Marriott and, in particular, the January 28, 2019, decision in In re Equifax Securities Litigation, which allowed most of the plaintiffs’ claims to survive a motion to dismiss, are evidence these cases are on the rise. In this guest article, Davis Polk attorneys discuss recent securities fraud class actions and steps that companies can take to (1) reduce the risk of such cases being filed, (2) increase the possibility of early dismissal of such actions, and (3) mitigate the potential scope of damages and costs associated with defending and resolving them. See “Defense and Plaintiff Perspectives on How to Survive Data Privacy Collateral Litigation” (Mar. 8, 2017).

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