Espinoza v. Dimon

STRINE, Chief Justice:

This Court has received the request from our distinguished colleagues on the United States Court of Appeals for the Second Circuit to answer the following question:

If a shareholder demands that a board of directors investigate both an underlying wrongdoing' and subsequent misstatements by corporate officers about that wrongdoing, what factors should a court consider in deciding whether the board acted in a grossly negligent fashion by focusing its investigation solely on the underlying wrongdoing? 1

The inspiration for this question is a contention by the plaintiffs in…