M. Todd Scott, a senior associate in the San Francisco office, is a member of the Securities Litigation, Investigations and Enforcement Group. His practice focuses on shareholder derivative suits, securities class actions, other complex business litigation and corporate governance counseling.

Todd has represented numerous corporations, directors and officers in federal securities class actions, SEC enforcement actions and shareholder derivative suits, at arbitration and on appeal.

Todd also regularly advises companies on questions of corporate governance, fiduciary duties and disclosure obligations, and has extensive experience in responding to shareholder litigation demands and books and records requests.

Before joining the firm, Todd was an associate at the San Francisco office of Clifford Chance US LLP. In his spare time, Todd is a musician, author and father to three amazing children.

Todd's notable engagements include:

  • Weinstein v. Chesapeake Energy Corp. et al., 2013 U.S. Dist. LEXIS 51380, 2013 WL 1457718 (W.D. Okla. 2013). Obtained dismissal at the pleading stage of a putative securities class action asserting claims under the Securities Exchange Act of 1934 against the company and its top officers.
  • United Food and Commercial Workers Union v. Chesapeake Energy Corp., 2013 U.S. Dist. LEXIS 45434, 2013 WL 1336123 (W.D. Okla. 2013). Obtained summary judgment and dismissal of a securities class action asserting claims under the Securities Act of 1933 against the company, its top officers, and board of directors.
  • Cheseldine v. McClendon. Obtained dismissal at the pleading stage of a putative stockholder derivative action asserting claims for breach of fiduciary duties against Chesapeake Energy Corp.’s board of directors. Also successfully repelled motion for temporary restraining order to enjoin payment of outgoing CEO’s severance.
  • Egleston v. McClendon. Obtained dismissal at the pleading stage of a putative stockholder derivative action asserting claims for breach of fiduciary duties against Chesapeake Energy Corp.’s board of directors.
  • Norris v. McClendon et al. Derivative Litigation. Represented the board of directors in a shareholder derivative action challenging company proxy disclosures. Obtained a dismissal the pleading stage.
  • Bundy v. IronPlanet. Represented the company in an action alleging breach of a repurchase contract over a founder’s shares of stock. After arbitration obtained a complete judgment in the client’s favor and an award of attorneys’ fees and costs.
  • Cheseldine v. Chesapeake Energy Corp. Defended the Company against an invasive shareholder books and records action and obtained a dismissal at the pleading stage.
  • In re: Micrus Endovascular Securities Litigation. Obtained dismissal at the pleading stage of a securities class action asserting claims under the Securities Exchange Act of 1934 Act against the company and certain of its officers and directors.
  • KPMG Corporate Finance v. LeadClick Media, Inc.. Represented the firm in an action to recover fees. After arbitration obtained a complete judgment in the client’s favor and an award of attorneys’ fees and costs.

Posts by: M. Todd Scott

No Longer a Mirage: FCPA Compliance and Cooperation Has Its Benefits


On September 12, 2016, the SEC announced that it had reached a settlement with Jun Ping Zhang (“Ping”), a former executive of a Chinese subsidiary of Harris Corporation (“Harris”), regarding alleged violations of the Foreign Corrupt Practices Act (“FCPA”). The settlement was unusual, in that the SEC declined to also bring charges against Harris, an international communications and information technology company.


Delaware Chancery Court Finds that Director Defendants Can Not “Merge Their Way Out of” Breach of Fiduciary Claims

court decision

On July 28, 2016, the Delaware Chancery Court allowed claims of unfair dealing against the Board of property management company Riverstone National Inc. to survive where the directors facilitated a merger that forestalled a derivative suit against them.  The court held that by orchestrating a merger that extinguished a possible derivative action, the director defendants obtained a special benefit for themselves.  As a result, the directors were interested in the transaction, thereby rebutting the presumption of the business judgment rule, and triggering application of the “entire fairness” doctrine.


CDX Holdings, Inc. v. Fox: Chancery Court’s Decision Is Affirmed, But Dissent Blasts Use of “Hindsight Bias” Analysis


On June 6, 2016, the Supreme Court of Delaware affirmed a decision of the Chancery Court finding that corporate directors and officers involved in a sales transaction breached a contract with option holders to fairly value their options (see here for a thorough explanation of the Chancery Court decision, and in particular, the Court’s criticism of the retained financial advisers that provided a valuation analysis).  The Supreme Court decision also included a disproportionately lengthy dissent condemning both the Chancery Court’s findings and its reliance on “social science studies” to reach them.


For Theranos, Life is Not All Rainbows and Unicorns: Government Conducting Criminal and Civil Investigations of Blood-Testing Company Theranos


In a memorandum released on April 18, 2016, the private blood-testing company Theranos – once valued at over $9 billion – announced that it is under investigation by the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Attorney’s Office for the Northern District of California, among other government agencies.  The memorandum did not disclose the focus of the government investigations.  Theranos’ announcement about the investigations comes on the heels of a series of October 2015 Wall Street Journal (“WSJ”) articles critical of the accuracy of the company’s blood-testing methods.  The government investigations into Theranos are not surprising, particularly in light of recent remarks by SEC Chair Mary Jo White (“White”) at a March 31, 2016 address at Stanford University’s Rock Center for Corporate Governance, where White revealed the SEC’s focus on Silicon Valley’s privately held unicorns – private start-up companies with valuations exceeding $1 billion.


Storm Warning for Safe Harbor


On February 29, 2016, the Supreme Court denied certification in Harman International Industries Inc. et al. v. Arkansas Public Employees Retirement System et al., thereby leaving unanswered a number of questions related to the Safe Harbor provision of the Private Securities Litigation Reform Act (PSLRA).  The petitioners, defendant Harman International Industries Inc. (“Harman” or “the Company”) and related individual defendants, argued that the D.C. Circuit Court of Appeals erred when it reversed the district court’s decision granting Harman’s motion to dismiss.  In declining to hear the case, the Supreme Court failed to resolve a circuit split concerning the relevance of state of mind to the efficacy of cautionary language.


Forum Shopping No More? Oregon Joins Delaware in Upholding Exclusive Forum Bylaw Provision

Decorative Scales of Justice in the Courtroom

On December 10, 2015, the Oregon Supreme Court held that an exclusive forum bylaw provision adopted unilaterally by a Delaware company’s board was a valid and enforceable contractual forum selection clause.  Importantly, the Oregon decision is the only reported non-Delaware appellate court decision to date addressing the validity of exclusive forum bylaws on the merits.

The decision, Roberts v. TriQuint Semiconductor, Inc., comes on the heels of the Delaware Court of Chancery’s forum bylaw ruling in Boilermakers Local 154 Retirement Fund v. Chevron CorporationAs previously noted on this blog, in Chevron, then-Chancellor Strine of the Delaware Court of Chancery held that an exclusive forum bylaw provision adopted unilaterally by a board was both facially valid under the Delaware General Corporation Law (“DGCL”) and an enforceable contractual forum selection clause.  Citing Chevron, the Oregon Supreme Court similarly concluded that an exclusive forum bylaw adopted only two days prior to the announcement of a merger was permissible and did not render the bylaw unenforceable in the shareholder merger litigation that followed.


The End of Disclosure Only Settlements in M&A Cases? Not So Fast.

Stock Ticker

Disclosure-only settlements have been popular in the past – last year, about 80% of settlements in M&A-related lawsuits were for disclosures only, according to Cornerstone Research – but lately they have come under scrutiny.  The Delaware Court of Chancery has issued opinions refusing disclosure-only settlement agreements before, noting that at times in these cases “there is simply little to commend the process of weighing the merits of a ‘settlement’ of litigation where the only continuing interest is that of the plaintiffs’ counsel in recovering a fee.”  The incentives of attorneys on both sides can be such that “the potential claims belonging to the class [are not] adequately or diligently investigated or pursued.”


International Hacking and Insider Trading Scheme Exposes Cybersecurity Vulnerabilities at Third-Party Vendors


On August 11, 2015, the SEC announced that it was bringing fraud charges against 32 defendants for their alleged participation in a five-year, international hacking and insider trading scheme.  According to the SEC, two Ukrainian men hacked into at least two major newswire services, stole non-public copies of embargoed corporate announcements containing quarterly and annual earnings data, and provided the announcements to 30 other defendants, who traded off the information.  In parallel actions, the U.S. Attorney’s Offices for the District of New Jersey and the Eastern District of New York also announced criminal charges against some defendants named in the SEC’s action.  The SEC’s enforcement action may be a harbinger of events to come.  As we have written, cybersecurity is emerging as the SEC’s newest area of focus for enforcement actions.


Fannie and Freddie Shareholders Sue FHFA and Treasury Department Over Payment of Profits to U.S. Government

Letter to Shareholders

On May 28, 2015, three Fannie Mae and Freddie Mac (the “Companies”) shareholders filed a complaint in the United States District Court for the Northern District of Iowa against the Federal Housing Finance Agency (“FHFA”), its director, and the U.S. Treasury Department in connection with FHFA’s agreement to pay all of the Companies’ profits to the Treasury on a quarterly basis (the “Net Worth Sweep”).  According to plaintiffs, the Net Worth Sweep would be all encompassing depriving the private shareholders of their profits forever.


For Shareholder Inspection Demands, A Purpose Isn’t “Proper” When the Issue Has Already Been Decided


As we have previously discussed in prior posts, shareholder demands to inspect confidential corporate information are being made with increased frequency, and are forcing more and more companies to grapple with their legal obligations to respond.  Earlier this month in Fuchs Family Trust v. Parker Drilling, the Delaware Court of Chancery issued further guidance, and explained why in certain cases, companies need not provide any information at all.