Stone v Ritter
Stone v. Ritter No. 93, 2006 SUPREME COURT OF DELAWARE 911 A. 2d 362; 2006 Del. LEXIS 597 October 5, 2006, Submitted November 6, 2006, Decided Bill Carter BLAW 633 7/7/09 Facts: This is an appeal from a final judgment of the Court of Chancery dismissing a derivative complaint against fifteen present and former directors of AmSouth Bancorporation ("AmSouth"), a Delaware corporation. The plaintiffs-appellants, William and Sandra Stone, are AmSouth shareholders. In AmSouth, the company was subjected to $50 million in fines and civil penalties for allegedly failing to fulfill its disclosure and reporting obligations under the Bank Secrecy Act and anti-money laundering rules with respect to activities of certain bank customers that were engaged in a “Ponzi” scheme that took place over the course of nearly two years. No bank employees were involved in the scheme, but some suspected wrongdoing and failed to file the suspicious activity reports required by regulators. In the Court of Chancery action, stockholder plaintiffs failed to make pre-suit demand on the AmSouth Board of Directors. Plaintiffs essentially brought a Caremark claim, alleging that demand was futile because the board members faced a substantial likelihood of liability arising from their “sustained or systematic failure … to exercise oversight – [i.