U.S. authorities’ recent probing of Toyota for possible Foreign Corrupt Practices Act violations illustrates the heightened enforcement risks faced by corporate policyholders, which could encounter an even harder market for D&O insurance. Despite the COVID-19 pandemic, the SEC continued its far-reaching enforcement activities last year with investigations across 715 separate cases and nine settlements under FCPA. Partner Peter Halprin told Law360 that some of the current investigations are likely holdovers from the last administration.

“‘Silly season’ describes the interesting time when you have an outgoing administration pursuing leads that get kicked into hyperdrive during the transition to force the incoming administration to continue the investigations and pursue enforcement actions,” Halprin said.

Legal experts agreed the D&O market has hardened with the potential of more aggressive enforcement by a new administration.

According to Halprin, brokers have suggested that the hardening of the market is primarily driven by the increases in derivative action awards and class action settlements.

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