D&O litigation digest: CD Projekt sued over 'unplayable' Cyberpunk 2077 game

The number of securities-related lawsuits filed in the U.S. has been rising rapidly in recent years, particularly after M&A transactions and other significant corporate developments are announced.

S&P Global Market Intelligence is now keeping track of such cases filed against companies in our covered industries. The following information is compiled on a best-efforts basis twice monthly.

Application software

Telenav Inc. and its board of directors are facing a lawsuit alleging violations of the Securities Exchange Act related to its proposed acquisition by the affiliates of V99 Inc.

The lawsuit alleges that the defendants caused Telenav to file a proxy statement that omitted material information regarding its financial projections and the analyses of its financial adviser.

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A class-action lawsuit filed against Triterras Inc., CEO Srinivas Koneru and Netfin Acquisition Corp. founder Marat Rosenburg is alleging that they failed to disclose the extent of the reliance of the company's revenue growth on Rhodium Resources Pte. Ltd.

Rhodium Resources, a Singapore-based commodity trading business that referred users to Triterras' Kratos platform, was allegedly facing significant financial liabilities that jeopardized its ability to continue as a going concern. Triterras was formerly known as Netfin Acquisition.

Biotechnology

Cellular Biomedicine Group Inc. and its board of directors are facing a lawsuit alleging violations of the Securities Exchange Act related to a proposed transaction that will see a consortium of entities take the company private.

The defendants allegedly failed to disclose potential conflicts of interest related to the proposed transaction involving an investment bank and company insider Steve Liu, who serves as a member of the Cellular Biomedicine board's special committee.

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Eidos Therapeutics Inc. and its board of directors are facing a lawsuit alleging violations of the Securities Exchange Act related to its merger agreement with BridgeBio Pharma Inc., Globe Merger Sub I Inc. and Globe Merger Sub II Inc.

The lawsuit alleges that the defendants omitted material information regarding Eidos' financial projections, the analyses conducted by the company's financial adviser and the presence of certain confidentiality agreement provisions.

Electric utilities

A lawsuit filed against PNM Resources Inc. and its board of directors is alleging violations of the Securities Exchange Act related to the company's merger agreement with Avangrid Inc. and its affiliates.

The defendants allegedly failed to disclose material information regarding PNM Resources' financial forecasts and the analyses conducted by its financial advisers.

Healthcare equipment

Sona Nanotech Inc. and some of its executives are facing a lawsuit related to the company's allegedly unfounded positive statements about its COVID-19 antigen test. The U.S. Food and Drug Administration deprioritized the emergency use authorization approval of the test due to its failure to meet the "public health need" criterion.

The lawsuit alleges that the defendants failed to disclose information regarding Sona's unreasonable belief that the data gathered over a short period would be sufficient for its COVID-19 antigen test to receive approval from the FDA or Health Canada.

Healthcare services

American Renal Associates Holdings Inc. and its board of directors are facing a lawsuit related to its proposed acquisition by the affiliates of Nautic Partners LLC.

The defendants allegedly filed a proxy statement that omitted material information regarding American Renal's financial projections, the analyses performed by the company's financial adviser and the presence of certain provisions in its confidentiality agreements.

Healthcare technology

A lawsuit filed against GoodRx Holdings Inc. and some of its executives is alleging that they created artificial demand for GoodRx common shares sold in its IPO in September 2020, under which the company generated at least $1.3 billion in gross proceeds.

The defendants allegedly made misleading statements about the company's competitive position contemporaneously when they knew about Amazon.com Inc.'s intention to launch an online prescription medication ordering and fulfillment service that would directly compete with GoodRx.

Holding companies, patent owners and trusts or estates

Switchback Energy Acquisition Corp. and its board of directors are facing a lawsuit alleging violations of the Securities Exchange Act related to its proposed merger with ChargePoint Inc.

The defendants allegedly failed to disclose material information regarding conflicts of interest involving Switchback's financial advisers, the valuation analyses performed by the financial advisers, the confidentiality agreements related to the proposed transaction and the financial projections for ChargePoint.

Home entertainment software

A class action lawsuit filed against CD Projekt SA and some of its executives is alleging that they failed to disclose that Cyberpunk 2077, a game that the company had devoted all of its resources to, was "virtually unplayable" on the current-generation Xbox and PlayStation systems due to an "enormous" number of bugs.

Sony Interactive Entertainment Inc. announced that it would offer a full refund for Cyberpunk 2077 purchases made through the PlayStation store, removing the game from the store. Microsoft Corp. also offered refunds for the game.

Internet software and services

Slack Technologies Inc. and its board of directors are facing a lawsuit alleging violations of the Securities and Exchange Act related to its proposed acquisition by the affiliates of Salesforce.com Inc.

The defendants allegedly failed to disclose material information regarding Slack's financial forecasts and the analyses of its financial advisers.

Investment and capital markets technology

Robinhood Financial LLC and Robinhood Securities LLC are facing a class action lawsuit over allegations that Robinhood's mobile application and website investment service lured unsuspecting consumers into executing inferior market trades under the guise of commission-free trading.

The lawsuit alleges that Robinhood failed to disclose to consumers that its business operations relied heavily on payment for order flow that the company received from market makers in exchange for executing trades through its service.

Investment banks, brokers and capital markets

A lawsuit filed against Mutual Securities Inc. and some of its executives is alleging that they invested their clients' assets in undiversified, risky and wildly speculative over-the-counter foreign mining stock regardless of client profiles.

The defendants allegedly implemented a "one size fits all" investment strategy, failed to adjust their clients' portfolios to reflect current market conditions and failed to disclose that they were self-dealing in foreign mining stock.

Leisure products producers

A lawsuit filed against Callaway Golf Co. and its board of directors is alleging violations of the Securities Exchange Act related to the company's proposed merger with Topgolf International Inc.

The lawsuit alleges that the Callaway Golf board authorized the filing of a registration statement that contained misleading information about the valuation analyses performed by the company's financial adviser and the financial projections for Callaway Golf and Topgolf.

Oil and gas exploration and production

Parsley Energy Inc. and its board of directors are facing a lawsuit alleging violations of the federal securities laws related to its proposed merger with Pioneer Natural Resources Co.

The defendants allegedly failed to disclose material information related to the proposed transaction, including the analyses performed by Parsley Energy's financial advisers, the financial projections for Parsley Energy and Pioneer, and the presence of certain confidentiality agreement provisions that may prevent counterparties from submitting superior offers.

Research and consulting services

Nielsen Holdings PLC and its board of directors are facing a lawsuit related to the sale of the company's Global Connect business to Advent International Corp.'s affiliates, Indy US Bidco LLC and Indy Dutch Bidco BV.

The lawsuit alleges that the defendants failed to disclose material information regarding Nielsen's financial projections, the analyses performed by its financial adviser, potential conflicts of interest involving the financial adviser and the presence of certain confidentiality agreement provisions.

Restaurants

A class action lawsuit filed against Restaurant Brands International Inc. and some of its executives is alleging that the company's "Winning Together Plan" and rewards loyalty program failed to generate substantial and sustainable improvement for the Tim Hortons brand.

Restaurant Brands allegedly acknowledged that the Tim Hortons brand's global comparable sales were dipping into negative territory in October 2019 after touting the benefits of its strategic initiatives, merely weeks after it completed two stock offerings that collectively resulted in approximately $3 billion of proceeds for the company insiders.

Semiconductor equipment

ACM Research Inc. and some of its executives are facing a class action lawsuit alleging that the company had diverted its revenue and profits to undisclosed related parties.

The lawsuit alleges that the defendants made false and misleading statements regarding the company's business, operational and compliance policies. Analyst J Capital Research concluded in an October 2020 report that ACM Research overstated its revenue by 15% to 20%.

Semiconductors

A lawsuit filed against Advanced Micro Devices Inc. and its board of directors is alleging violations of the federal securities laws related to the company's merger agreement with Xilinx.

The defendants allegedly filed a registration statement that omitted material information regarding the financial projections for Advanced Micro Devices and Xilinx and the analyses performed by the companies' financial advisers.

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Inphi Corp. and its board of directors are facing a lawsuit related to its proposed acquisition by the affiliates of Marvell Technology Group Ltd.

The lawsuit alleges that the defendants caused the company to file a registration statement that omitted information regarding the analyses of the company's financial adviser and the financial forecasts for Inphi and Marvell.

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Xilinx Inc. and its board of directors are facing a lawsuit alleging violations of the federal securities laws related to its proposed merger with Advanced Micro Devices and Thrones Merger Sub Inc.

The defendants allegedly failed to disclose material information related to the financial analyses performed by Xilinx's financial advisers, potential conflicts of interest involving the financial adviser and the financial projections for Xilinx and Advanced Micro Devices.

Specialized consumer services

A lawsuit filed against Collectors Universe Inc. and its board of directors is alleging violations of the Securities Exchange Act related to its proposed acquisition by an investor group led by Nat Turner, D1 Capital Partners LP and Cohen Private Ventures LLC.

The defendants allegedly asked shareholders to support the proposed transaction using a solicitation statement that contained misleading information regarding Collectors Universe's financial projections and the financial valuation analyses of its financial adviser.

Trading companies and distributors

Foundation Building Materials Inc. and its board of directors are facing a lawsuit alleging violations of the federal securities laws related to its proposed merger with American Securities LLC through its affiliates, ASP Flag Intermediate Holdings Inc. and ASP Flag Merger Sub Inc.

The lawsuit alleges that the defendants failed to disclose material information regarding Foundation Building Materials' financial projections, financial valuation analyses, the background of the proposed transaction and potential conflicts of interest involving company insiders and the financial advisers for the merger.