A&O Shearman

Securities Litigation

Northern District Of California Grants Motion To Dismiss Securities Class Action Against Footwear Company

On February 26, 2026, Judge Araceli Martínez-Olguín of the United States District Court for the Northern District of California granted a motion to dismiss a purported securities class action brought against a footwear and apparel company (the “Company”) and certain of its officers, directors, and underwriters. Shnayder v. Allbirds, Inc., No. 23-cv-01811 (N.D. Cal. Feb. 26, 2026).
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Northern District Of California Denies In Part Motion To Dismiss Securities Class Action Against Cloud Software Company

On February 23, 2026, Judge P. Casey Pitts of the United States District Court for the Northern District of California denied in part a motion to dismiss a securities fraud putative class action against a cloud-based call center operation software company (the “Company”) and two of its officers—its CEO and former CFO (the “Individual Defendants”)—alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. Lucid Alternative Fund, LP v. Five9, Inc., No. 24-cv-08725-PCP (N.D. Cal. Feb. 23, 2026).
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Government/Regulatory Enforcement

CFTC Enforcement Division Issues Advisory On Prediction Market Trading Practices

On February 25, 2026, the U.S. Commodity Futures Trading Commission (“CFTC”) Division of Enforcement released an advisory, reminding market participants of the agency’s authority to pursue misuse of material nonpublic information to trade, and other forms of market abuse, in the nascent prediction markets (the “Advisory”). The Advisory follows the public release of two enforcement actions against traders on a U.S. predication market trading platform. Although the trading platform handled the investigations internally, the CFTC utilized the opportunity to emphasize its “full authority to police illegal trading practices” occurring on any Designated Contract Market (“DCM”), including prediction markets.
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SEC Updates Enforcement Manual: Key Changes To Wells Notices, Settlements, and Cooperation Guidance

On January 15, 2026, the New York Attorney General (“NYAG”) filed a complaint against a former life-sciences manufacturing CEO, alleging violations of New York’s Martin Act for trading material nonpublic information related to the manufacturing of Covid-19 vaccinations.
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M&A and Corporate Governance

Delaware Supreme Court Upholds Constitutionality Of Senate Bill 21

On February 27, 2026, the Delaware Supreme Court, sitting en banc, affirmed the constitutionality of Delaware Senate Bill 21 (“SB 21”), which amended Section 144 of the Delaware General Corporation Law (“DGCL”) to alter the standard of review applicable to certain controlling stockholder transactions. Rutledge v. Clearway Energy Group LLC, No. 248, 2025, 2026 WL 548504 (Del. Feb. 27, 2026).
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Delaware Supreme Court Finds Attorneys’ Fee Award Excessive In Excessive Compensation Case

On January 30, 2026, the Delaware Supreme Court, sitting en banc, affirmed a settlement resolving excess compensation claims against non-employee director defendants but reversed and modified the portion of the settlement allocated by the Court of Chancery to plaintiffs’ counsel fee award, reducing it from approximately $173 million to $71 million. In re Tesla, Inc. Dir. Comp. S’holder Litig., C.A. No. 2020-0477 (Del. Jan. 30, 2026). Defendants alleged that the fee award improperly took into account the intrinsic value of stock options returned to the company for cancellation and applied an excessive percentage to the valuation of the associated financial benefit.
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Antitrust Litigation

Eastern District of North Carolina Grants Motion To Dismiss Conspiracy Claims In HVAC Refrigerant Market

On February 20, 2026, Judge Terrence Boyle of the U.S. District Court for the Eastern District of North Carolina dismissed all claims against Mexichem Fluor, Inc., a producer and distributor of refrigerant products, and its co-defendant, chemicals manufacturer The Chemours Company FC, LLC. FluoroFusion Speciality Chemicals, Inc., et al. v. The Chemours Company FC, LLC, et al., No. 5:24-cv-716-BO-KS (E.D.N.C. Feb. 20, 2026).
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Grocery Store Chains Defeat Antitrust Claims Arising From Strike-Related No-Poach Agreement

On February 6, 2026, Judge Gordon P. Gallagher of the United States District Court for the District of Colorado granted defendants’ motion to dismiss in Valarie Morgan v. The Kroger Co., et al., Civ. A. No. 25-cv-00837-GPG-CYC, dismissing a proposed class action antitrust lawsuit alleging the grocery giants violated antitrust law through a no-poach agreement entered into during a 2022 union strike. Notably, the Court observed that, leading up to the strike, defendants had discussed coordinating but could not agree on a Mutual Strike Assistance Agreement.
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Intellectual Property Litigation

Federal Circuit Affirms Summary Judgment Of Non Infringement For Failure To Prove Structural Equivalence Under § 112(f)

On February 19, 2026, the U.S. Court of Appeals for the Federal Circuit affirmed the District of Delaware’s grant of summary judgment of non infringement in favor of defendants in Genuine Enabling Tech. LLC v. Sony Corp., No. 17-CV-135, 2024 WL 1255513 (D. Del. Mar. 25, 2024).
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Federal Circuit Finds Claims as a Whole Directed to Patent Eligible Non-Naturally Occurring Composition

On February 20, 2026, the Court of Appeals for the Federal Circuit (“CAFC”) issued a precedential opinion reversing and remanding a decision from the United States District Court for the District of Delaware finding the asserted claims of appellant’s patent invalid as directed to a patent-ineligible natural phenomenon under 35 U.S.C. § 101. Regenxbio Inc. v. Sarepta Therapeutics, Inc., __ F.3d __ (Fed. Cir. February 20, 2026).
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