Stone v. Ritter

AmSouth Bancorporation paid $50 million in fines after employees failed to file required suspicious-activity reports under bank-secrecy and anti-money-laundering laws, even though the directors had established a BSA officer, a compliance department, a corporate security department, and an oversight committee -- findings confirmed by an independent KPMG review. Shareholders (plaintiffs) brought a derivative suit against AmSouth's directors (defendants) for failing to properly oversee compliance; applying the Caremark standard requiring sustained or systematic failure to show lack of good faith, the Court of Chancery dismissed the complaint, and the plaintiffs appealed.