US investors are using federal securities law to launch claims over sexual harassment policy compliance. Boards should take this seriously.
We all know that the federal securities laws prohibit insider trading, "pumping and dumping", Ponzi schemes and market manipulation. But public shareholders and their lawyers have been working hard to expand this ignoble list. Capitalising on the #MeToo movement, motivated investors have been bringing compliance-related, securities fraud cases against unsuspecting corporations and their officers and directors. The stakes are high. The plaintiffs in these under-the-radar litigations are not victims of sexual harassment or employment discrimination but corporate shareholders. These litigants contend that certain public companies’ written compliance policies contain material misrepresentations in their anti-discrimination and anti-harassm