Securities

UBS Can't Dodge Ex-Banker's SOX Retaliation Claims

By Scott Flaherty |

Partly rejecting a motion to dismiss filed by Gibson Dunn's Eugene Scalia, a judge allowed an ex-UBS banker to pursue claims that he was fired for refusing to exaggerate the quality of the bank's commercial mortgage-backed securities.

U.S. Securities and Exchange Commission building.

SEC Rears Its Head in Icahn Case Over Wachtell Advice

By Scott Flaherty |

CVR Energy revealed that it's under investigation over securities disclosures it made before Carl Icahn’s successful takeover bid three years ago—and it blamed Wachtell for putting the company in the SEC’s sights.

UBS, SunTrust Lose Bid to Escape ResCap Mortgage Claims

By Scott Flaherty |

Lawyers at Quinn Emanuel moved a step closer this week to forcing a payout from banks that partnered with defunct mortgage lender Residential Capital before the financial crisis.

Bank of America Can't Dodge $1.27B Countrywide Verdict

By Scott Flaherty |

Never one to mince words, U.S. District Judge Jed Rakoff had a few harsh ones for Bank of America on Tuesday, ruling that the bank "utterly failed" to offer a compelling reason to retry a mortgage fraud case that put it on the hook for $1.27 billion.

Standard & Poor's headquarters at 55 Water St.

S&P Deal Shouldn't End Scrutiny of Rating Agencies

By Susan Beck |

Evidence cited in a recent SEC report suggests that conflicts of interest at the rating agencies continue. So why won't the SEC name the offenders?

Michael Dowd of Robbins Geller Rudman & Dowd.

Litigators of the Week: Michael Dowd and Jason Forge of Robbins Geller

By Scott Flaherty |

Pfizer Inc. and a phalanx of defense lawyers spent five years trying to defeat an investor class action related to off-label drug marketing. But Robbins Geller kept the case alive until a looming trial pressured the drug maker to cut a $400 million deal.

Report Says Securities Class Actions Fizzled in 2014

By Scott Flaherty |

A rising tide may lift all boats, but a rising stock market may be helping to sink the fortunes of the securities class action plaintiffs bar.

Wal-Mart, Biz Groups Look to Topple Gun Sales Proposal

By Scott Flaherty |

Backed by business groups, Wal-Mart Stores Inc. and its lawyers at Gibson, Dunn & Crutcher fired their opening shots this month in a federal appeal over shareholder efforts to challenge Wal-Mart's sales of guns and other "offensive" products.

U.S. Securities and Exchange Commission building.

S&P's Litigation Woes Continue After SEC Deal

By Scott Flaherty |

Standard & Poor's agreed Wednesday to suspend part of its business and to fork over nearly $80 million to federal and state regulators. But S&P's lawyers still have their work cut out for them in government actions stemming from the financial crisis.

U.S. Securities and Exchange Commission building.

Ex-S&P Exec Joins Battle Against SEC Administrative Actions

By David Bario |

A quartet of lawsuits challenging the SEC's in-house enforcement actions became a quintet on Friday, signaling that it may take a federal appeals court—and perhaps even the U.S. Supreme Court—to decide once and for all whether the agency's administrative proceedings pass muster.

Credit Suisse in Plaintiffs' Sights After Freeport-McMoRan Deal

By Julie Triedman |

There was plenty about this week's $137.5 million Freeport-McMoRan settlement to fire up the shareholder M&A litigation bar. But the next chapter in the Freeport case could be even more interesting.

JPMorgan Must Face Trustee's $500 Million MBS Suit

By Scott Flaherty |

Siding with Quinn Emanuel and reversing his own prior ruling, a judge breathed new life into a lawsuit against JPMorgan Chase and EMC Mortgage over $500 million in mortgages that now-defunct Bear Stearns bundled into securities and sold to investors.

The U.S. Supreme Court building

High Court Rejects Appeal Over Agency's Deadline to Sue Banks

By Scott Flaherty |

The U.S. Supreme Court refused to consider whether the National Credit Union Administration waited too long to sue over billions of dollars in allegedly shoddy securities. But questions underlying the banks' challenge still may not be fully resolved.

Shirley Werner Kornreich

N.Y. State Judges Taking Hard Line on Shareholder Deals

By Susan Beck |

The latest "disclosure-only" shareholder settlement to draw a judge's ire would have resolved litigation over Martin Marietta Materials Inc.'s $2.7 billion acquisition of Texas Industries.

JPMorgan Inks Deal to End Bear Stearns Securities Class Action

By Scott Flaherty |

The bank agreed to pay about $500 million to resolve class action claims stemming from Bear Stearns' sale of nearly $17.6 billion of the securities prior to the 2008 financial crisis.

Kevin Abrams

Litigator of the Week: Kevin Abrams of Abrams & Bayliss

By Scott Flaherty |

Siding with Abrams, a Delaware judge refused to foist new rules on hedge funds using a strategy called appraisal arbitrage to squeeze profits out of allegedly undervalued M&A deals.

Eighth Circuit Tosses Cy Pres Award in Bank of America Case

By David Bario |

In the latest appellate victory for Theodore Frank of the Center for Class Action Fairness, a panel overturned a judge's decision to award funds left over from a $490 million securities class action to a Missouri legal charity.

Judging the Judges in 2014

By Susan Beck |

What were the best and worst court decisions of the year in the world of business law? American Lawyer columnist Susan Beck gives us her picks.

Top Simpson Thacher Litigator Signs On as Takata GC

By Scott Flaherty |

Securities defense pro Bruce Angiolillo is leaving his lifelong Simpson Thacher career behind to guide embattled auto parts maker Takata through a U.S. legal minefield.

Credit Suisse Ruling Helps Preserve Martin Act's Reach

By Scott Flaherty |

A New York judge poured coal in the stockings of defendants looking for vulnerabilities in New York's 93-year-old Martin Act, the state's fearsome tool for combating financial fraud.

Litigators of the Week: A Look (Way) Back

By Julie Triedman |

In five years of Litigator of the Week features, a handful of partners and their law firms managed to stand out from their competitors.

David Wasinger

St. Louis Lawyer Scores Again in BofA Whistleblower Case

By Scott Flaherty |

David Wasinger's whistleblower clients helped the government collect a whopping $2.2 billion from Bank of America and JPMorgan this year. They've been awarded roughly $123 million for their troubles, suggesting that Wasinger and his tiny firm will be enjoying happy holidays indeed this month.

U.S. Securities and Exchange Commission building.

SEC Drops Insider Trading Case over Herbalife Short

By Scott Flaherty |

The Securities and Exchange Commission's enforcement action against an accused insider trader appears to have unraveled, as the agency admitted Monday that it can't produce two key witnesses to testify about an alleged tip-off regarding Herbalife Ltd.

Lehman Trustee Takes Barclays Fight to Supreme Court

By David Bario |

Monday's petition—should the Supreme Court grant it—raises the prospect of a high court showdown between former U.S. solicitor general Paul Clement and David Boies of Boies, Schiller & Flexner over Barclays' firesale acquisition of Lehman Brothers' brokerage business.

U.S. Securities and Exchange Commission building.

SEC Wins a Round in Battle over Agency Actions

By Scott Flaherty |

A Manhattan federal judge has injected new doubts into a string of cases challenging an increasingly common tactic by the Securities and Exchange Commission: pursuing fraud and insider trading claims in agency enforcement proceedings, rather than in federal court.

Litigators of the Week: Stephen Fishbein, John Nathanson and Mark Pomerantz

By David Bario |

Shearman & Sterling's Fishbein, who argued the successful insider trading appeal in U.S. v. Newman alongside Mark Pomerantz of Paul Weiss, says it's wrong to think that the Second Circuit made insider trading too tough to prove. But, he says, "it's going to be harder to prove when the defendants are innocent."

FINRA Fines Banks for Mixing Research, Investment Banking Biz

By Scott Flaherty |

A decade after a crackdown that was supposed to rein in research conflicts at Wall Street banks, the industry's self-regulator levied $43.5 million in penalties Thursday against 10 leading banks accused of using their research analysts to drum up investment banking business.

Manhattan U.S. Attorney Preet Bharara

Second Circuit to Insider Traders: Trade Away!

By Susan Beck |

Are you looking to make extra money trading on inside information, but worried about the risks? The U.S. Court of Appeals for the Second Circuit has good news for you.

U.S. District Judge Laura Taylor Swain

Six Years On, Madoff Subordinates Get Prison Terms

By Susan Beck |

A judge is continuing to dole out prison sentences for associates of fraudster Bernie Madoff, though so far this week the defendants have gotten away with lighter terms than prosecutors sought.

Irving Picard

Investors Win Madoff 'Fictitious Profits' Appeal

By David Bario |

A Second Circuit panel concluded that trustee Irving Picard's bid to claw back about $1.6 billion in "fictitious profits" from Madoff investors is barred by a provision of the bankruptcy code that was designed, ironically, to minimize uncertainty in the securities markets.

SEC's $47M Life Partners Win Could Derail Investor Class Action

By David Bario |

The SEC's award is far less than the $2 billion that the agency was seeking. But it may be more than enough to frustrate plaintiffs lawyers pressing a parallel investor class action against the "life settlement" company and its executives.

Delaware Firm Extends Hot Streak with Wal-Mart Ruling

By David Bario |

With just four lawyers, Wilmington's Friedlander & Gorris is giving corporations and their directors a run for their money.

Weight of Longtop Investor Case Falls on Ex-CFO

By David Bario |

In the end, the biggest defendants in the Longtop class action remained beyond the plaintiffs' reach.

The Appellate Division, First Department, at 27 Madison Ave.

New York Joins Delaware, Rejects 'Entire Fairness' Test for Kenneth Cole Buyout Deal

By Susan Beck |

The N.Y. ruling comes seven months after the Delaware Supreme Court held that courts should use the management-friendly business judgment rule to review going-private deals like the buyout planned for Kenneth Cole.

Jay Greenberg (L) and Max Volsky of LexShares

Litigation Finance Meets Crowdfunding With New Wall Street Startup

By David Bario |

LexShares, a crowdfunding platform aimed at financing lawsuits, is banking on the notion that mainstream investors will want to cash in on the growth of third-party litigation funding.

D.C. Circuit Rules SEC Can Shield FINRA Records

By Susan Beck |

Thanks to what one judge called an "ill-conceived amendment" to the 1934 Exchange Act, an appellate panel held that the SEC doesn't have to hand over documents regarding the handling of investor complaints by the Financial Industry Regulatory Authority.

The U.S. Court of Appeals for the Second Circuit in Manhattan.

CDO Manager Chau Comes Up Short in Libel Appeal

By David Bario |

After almost half a decade as a poster child for Wall Street greed and incompetence, investment adviser Wing Chau won a measure of sympathy from a judge on Friday. But for Chau and his lawyers at MoloLamken, the news is too little, too late.

Goldman Sachs CEO Lloyd Blankfein.

Dragon Founders Lose Again Despite 'Sloppy' Goldman Advice

By David Bario |

Sometimes bad advice is negligence, and sometimes it's just bad advice.

Psst, Bank Regulators: Can You Give Us a Name?

By Susan Beck |

Why is it so hard for the government to identify the people who are gaming our financial system?

As Lawyer Bills Pile Up, SEC Target Sam Wyly Defends Expenses

By Susan Beck |

In the wake of his $200 million loss to the SEC, Samuel Wyly asked a bankruptcy judge to approve a personal spending plan that includes nearly $2 million in legal expenses for November and December.

Online Education Company K12 Beats Investor Class Action

By David Bario |

Take a company with a controversial business model, throw in some rosy projections by senior management and top it off with a sudden 40 percent stock drop, and you've got a classic recipe for a securities class action.

Aaron Marcu and Matthew Menchel

Litigators of the Week: Aaron Marcu of Freshfields and Matthew Menchel of Kobre & Kim

By David Bario |

For the defenders of former UBS banker Raoul Weil, a six-year prosecution ended with their client crying tears of joy.

Pershing Square's Bill Ackman.

Latham Vows Extra Rounds in Allergan Takeover Fight

By Susan Beck |

Allergan and its lawyers at Latham & Watkins filed a notice of appeal on Wednesday after a judge largely sided with hostile bidder Valeant Pharmaceuticals and the activist hedge fund Pershing Square.

UBS Hits Dead End in $350M Facebook IPO Case

By Susan Beck |

Siding with Nasdaq's lawyers at Ballard Spahr, the Second Circuit rejected the bank's bid to arbitrate claims over $350 in alleged losses stemming from Facebook's troubled initial public offering.

U.S. Centers for Disease Control and Prevention director Dr. Tom Frieden exits an Ebola treatment unit.

Following Investors, Class Action Firms Get Ebola Fever

By David Bario |

Who better to turn a crisis into an opportunity than investors—and the securities class action plaintiffs bar?

U.S. Securities and Exchange Commission building.

Wall Street Targets Urge NY Judges to Hobble the SEC

By David Bario |

A trio of federal judges—and eventually the U.S. Court of Appeals for the Second Circuit—will have to grapple with the SEC's power to target Wall Street defendants on the agency's own turf.

Litigators of the Week: Randall Baron of Robbins Geller and Joel Friedlander of Friedlander & Gorris

By David Bario |

Before Friedlander and Baron took control of the Delaware shareholder litigation over Warburg Pincus' acquisition of Rural/Metro Corp., the case was ready to fizzle. Instead, the duo uncovered a web of conflicts and deception that led up to a $75.8 million ruling against Royal Bank of Canada.

Ambac Loses Bid to Revive JPMorgan RMBS Contract Claims

By Julie Triedman |

Siding with defense lawyers at Sullivan & Cromwell, an appeals court in New York affirmed a decision dismissing breach of contract claims by Ambac against EMC Mortgage, a Bear Stearns unit acquired by JPMorgan Chase & Co.

Wife of Ex-SAC Trader Martoma Asks Court for Lifeline

By David Bario |

Rosemary Martoma was never implicated in her husband Mathew's insider trading scheme, which entailed using confidential drug trial information to help SAC make a windfall $275 million profit. Now her lawyers at Goodwin Procter say she shouldn't have to pay for his crimes.

Court Revives SOX Whistleblower's Case Against JPMorgan

By David Bario |

Thanks to an earlier decision by the Second Circuit that lowered the requirements for asserting whistleblower claims under Sarbanes-Oxley, JPMorgan Chase must again face allegations that it fired a former vice president for raising suspicions about a favored client.

Robbins Geller Deflects Attacks as JPMorgan Case Gets Green Light

By Jan Wolfe |

A judge certified an investor class action against JPMorgan Chase & Co. related to about $10 billion in mortgage-backed securities, rejecting the bank's claims that the plaintiffs firm isn't cut out to lead the 5-year-old case.

Judge Leo Strine

Del. Court Wipes Out $250M Verdict Against Covidien Unit

By Jan Wolfe |

The Delaware Supreme Court's ruling is a victory for ev3's appellate lawyers at Gibson, Dunn & Crutcher, who said it will help shield Delaware companies from attacks over deal terms that were never made final.

Wachtell Fends Off Class Action Sparked by Avon Bribes Flap

By Jan Wolfe |

Allegations that Avon bribed its way into the Chinese market sparked a massive internal probe and a criminal settlement. But a judge sent a proposed securities class action over the scandal back to the drawing board on Monday, dealing a defeat to plaintiffs lawyers at Motley Rice.

Signs of a Tougher SEC?

By Susan Beck |

The U.S. Securities and Exchange Commission showed rare nerve in two cases that reached a head last week.

Lawyers Shoot for the Moon With Fee Bid in LBO Case

By Jan Wolfe |

Scott & Scott, Robins Kaplan and Robbins Geller didn't end up getting the billions in damages they were seeking in a class action alleging that private equity firms fixed the prices of leveraged buyouts. But you wouldn't know it from the bold attorneys fee request they made on Friday.

U.S. District Judge P. Kevin Castel

Judge Nixes Hedge Fund's Bid to Block $3.7B Bank Merger

By Jan Wolfe |

The ruling offers an answer to an unsettled question for securities fraud litigants, and it removes one roadblock to the proposed $3.7 billion merger between CorpBanca, one of Chile's largest banks, and Brazil's Itaú Unibanco.

Wylys Must Pay at Least $300 Million, Judge Rules

By Jan Wolfe |

In one of the stiffest penalties ever imposed on individual defendants in a securities fraud case, U.S. District Judge Shira Scheindlin ordered billionaire Sam Wyly and the estate of his brother Charles Wyly to hand over between $300 million and $400 million to the SEC.

CalPERS Flags Concerns Over HP Settlement

By Marisa Kendall |

The nation's largest public pension fund this week became the latest to voice concerns over a settlement that would extinguish shareholder derivative litigation over Hewlett-Packard's botched 2011 acquisition of British software firm Autonomy.

U.S. Securities and Exchange Commission building.

Foreign SEC Tipster Gets Record $30 Million Award

By Susan Beck |

In its largest whistleblower award to date, the SEC set aside at least $30 million for a foreign resident who tipped off the agency about an unnamed fraud. The agency said the award was appropriate despite the Supreme Court's stricture against applying U.S. securities laws overseas.

Oxfam Sues SEC Over Oil Industry Transparency Rule

By Jan Wolfe |

In its second lawsuit related to requirement for publicly traded oil and gas companies to disclose payments to foreign governments, Oxfam claims the wait for a final version of the rule has gone on far too long.

Holder Touts Bigger Payouts For Wall Street Whistleblowers

By Jenna Greene |

Attorney General Eric Holder on Wednesday called on the government to increase rewards for those who blow the whistle on financial crimes, arguing that greater incentives are needed to induce people to come forward with insider information.

Gibson Dunn's Eugene Scalia

Gibson Dunn Gets Mixed Ruling in CFTC Swaps Rule Challenge

By Jan Wolfe |

A judge upheld key aspects of the Commodity Futures Trading Commission's rules on cross-border swaps.

Wilson Sonsini IT Employee Charged With Insider Trading

By Patience Haggin |

The charges against longtime IT employee Dimitry Braverman come two years after a former Wilson Sonsini associate received a record 12-year jail sentence for insider trading.

In the Home Stretch, FHFA Inks $550M Deal With HSBC

By Jan Wolfe |

Like more than a dozen bank defendants before it, HSBC on Friday reached a megabucks settlement to end its mortgage-backed securities fight with Fannie and Freddie's conservator.

U.S. Supreme Court.

IndyMac Settlement Leaves Tolling Question Unresolved

By Jan Wolfe |

Investors in mortgage-backed securities issued by IndyMac settled their claims against the bank's underwriters. But the IndyMac litigation lives on at the U.S. Supreme Court—with important implications for the time limits that govern securities class actions.

Del. Judge Blesses Forum Bylaw Aimed at Scuttling M&A Suits

By Jan Wolfe |

Delaware judges aren't exactly known for ceding jurisdiction to other states, especially in shareholder disputes. But a chancery judge ruled that forum selection bylaws are valid even if they're adopted in anticipation of litigation, and even if they designate a Delaware company's out-of-state home turf as the forum.

The U.S. Court of Appeals for the Second Circuit in Manhattan.

Cravath Beats Back Xerox Investor Class Action

By Jan Wolfe |

Despite some regrettably worded internal communications it produced during discovery, Xerox Corporation has finally killed off a class action alleging it overstated the cost-saving benefits of its big corporate reorganization in 1998.

No Escape for Banks in Credit Default Swap Antitrust Case

By David Bario |

Institutional investors represented by Quinn Emanuel and Pearson, Simon & Warshaw cleared a major hurdle on Thursday, when a judge refused to toss most of a multibillion-dollar class action targeting top international investment banks.

Floyd Abrams.

Cahill Fends Off German Bank's Suit Against S&P

By Susan Beck |

Siding with Cahill's Floyd Abrams, a judge ruled that IKB Deutsche Industriebank waited too long to sue Standard & Poor's for the top ratings it bestowed on notes issued by an ill-fated investment vehicle.

U.S. District Judge Louis Stanton

Banks Beat FDIC Suit Over Mortgage-Backed Securities

By Jan Wolfe |

Adopting an argument that other courts have rejected, a federal judge in Manhattan ruled that the FDIC waited too long to sue Deutsche Bank, Royal Bank of Scotland, Credit Suisse and other banks that sold mortgage-backed securities.