Securities

In Replay of FHFA Appeal, Banks Urge Second Circuit To Topple FDIC Claims

By Scott Flaherty |

Can Sullivan & Cromwell's Bob Giuffra succeed where his predecessors failed?

Barclays Can't Escape 'Dark Pool' Securities Class Action

By Scott Flaherty |

Barclays' lawyers at Sullivan & Cromwell managed to trim but not defeat claims that the bank misled investors about safeguards in its Liquidity Cross dark pool.

Citigroup Can't Dodge Lawsuit Over Soured CDO

By Scott Flaherty |

A financial crisis case that stumbled on South Korean law regained its footing on Wednesday, when a U.S. appeals court revived claims that Citigroup Inc. duped a Korean bank into investing in a complex investment product that went belly-up in the global recession.

Quinn Emanuel Wins Reversal, Revives Suit over $1.5B CDO

By Susan Beck |

In the latest case sparked by the alleged CDO shenanigans of hedge fund Magnetar Capital, the Second Circuit ruled that FGIC can pursue claims over a $1.5 billion CDO gone bad.

Wal-Mart Asks Third Circuit to Holster Gun Sales Proposal

By Scott Flaherty |

Gibson Dunn's Ted Boutrous and Delaware shareholder lawyer Joel Friedlander will square off Wednesday over an unusual proxy proposal challenging Wal-Mart's sales of high capacity guns and other potentially "offensive" products.

U.S. Attorney Preet Bharara speaks at a press conference in early 2014.

No Respite for Gov't as Court Affirms Insider Trading Ruling

By Julie Triedman |

Stephen Fishbein of Shearman & Sterling and Mark Pomerantz of Paul Weiss won't have to reargue the successful appeals of Todd Newman and Anthony Chiasson at the Second Circuit.

Courting Whistleblowers, SEC Targets KBR Secrecy Pacts

By Scott Flaherty |

The U.S. Securities and Exchange Commission on Wednesday fined technology and engineering company KBR Inc. over confidentiality agreements that, the agency claims, could have silenced potential whistleblowers.

U.S. Securities and Exchange Commission building.

Lynn Tilton, Patriarch Strike Back at SEC Judges

By David Bario |

It didn't take long for "Diva of Distressed" Lynn Tilton and her lawyers at Skadden to take the offensive against the Securities and Exchange Commission.

Skadden's David Zornow.

Skadden to Square Off With SEC in Tilton, Patriarch Drama

By Scott Flaherty |

Last year lawyers at Skadden brought a constitutional challenge against the SEC for filing an unrelated case against an investment adviser as an administrative action rather than a federal lawsuit. Will the firm go on the offensive for the "Diva of Distressed" as well?

Investment Bank Sues Morrison & Foerster Over Puda Coal Debacle

By Scott Flaherty |

The defunct, fraud-addled Chinese company Puda Coal was disaster for its investors, and remains a major litigation headache for its bankers. Now the investment bank Macquarie Group wants the lawyers to share the blame.

$20 Billion Later, Banks Finally Win Ruling on Time Limits

By Scott Flaherty |

Big banks have failed to convince courts around the country that various government agencies waited too long to sue over Wall Street's role in the 2008 financial crisis. This week, a judge finally adopted the banks' reasoning in a case brought by the Federal Deposit Insurance Corporation.

As Settlement Pie Shrinks, Firms Fight for Their Slice

By Scott Flaherty |

After a lackluster year for securities class action settlements, fee awards in deals involving IndyMac and AIG highlight the uncertainties facing plaintiffs firms in even the biggest cases.

SCOTUS

Context Is King in Supreme Court's Omnicare Ruling

By David Bario |

The justices held that Omnicare can't be held liable under Section 11 of the Securities Act of 1933 just because it offered opinions in a regulatory filing that turned out to be false. But they also said couching a statement as an opinion is no magic bullet for securities defendants.

Ohio Attorney General Mike DeWine.

Lawyers Eye Fees in BNY Mellon Deal as Ohio Mulls Reforms

By Susan Beck |

Lieff Cabraser and another outside law firm stand to earn $43 million from Ohio's portion of a $714 million settlement with The Bank of New York Mellon. But even though Ohio's attorney general signed off on the contingency deal, he's backing a bill that would have made it impossible.

Skadden Partner Turned Bank Foe Can't Challenge JPMorgan Deal

By Scott Flaherty |

Dennis Kelleher, the former Skadden partner-turned Wall Street watchdog, hit a litigation dead end this week in his crusade for financial reform.

Irving Picard

Picard Taps SCOTUS Pro for Swipe at Madoff 'Net Winners'

By Scott Flaherty |

Irving Picard has hit a wall in his efforts to claw back nearly $2 billion in "fictitious" profits pocketed by Bernie Madoff's customers. Can Goldstein & Russell's Thomas Goldstein succeed where Picard's partners at Baker & Hostetler have failed?

Wachtell Knocks Out Shareholder Suit Over Avon Bribes Probe

By Scott Flaherty |

The firm helped shield Avon Products Inc. from more fallout over allegations that the cosmetics company bribed officials in a half-dozen foreign countries, convincing a judge in Manhattan to toss shareholder derivative claims related to the long-simmering bribery flap.

U.S. District Judge Thomas Griesa

BlackBerry Dodges Another Securities Class Action Bullet

By Scott Flaherty |

BlackBerry Ltd. may still be grasping at the heels of its smartphone competitors, but the company's lawyers aren't having much trouble beating back investor class actions over its spotty performance.

FHFA, Nomura Head to Trial Over Fannie and Freddie Losses

By Julie Triedman |

After four years of courtroom wrangling and more than $20 billion in settlements, the first trial is set to begin Monday in the Federal Housing Finance Agency's litigation campaign against banks that packaged and sold mortgage-backed securities.

U.S. Securities and Exchange Commission building in Washington, D.C.

SEC Wins Appeal in Fight with Pre-Dodd-Frank Whistleblower

By Scott Flaherty |

The Second Circuit on Wednesday lowered the chances that "zombie" whistleblowers who offered their tips to the SEC before Dodd-Frank will ever see a reward.

NCUA Win in Barclays Case May Hurt Credit Suisse, Other Banks

By Scott Flaherty |

Handing a win to Kellogg Huber's David Frederick, the Tenth Circuit reinstated the National Credit Union Administration's lawsuit against Barclays PLC over allegedly shoddy mortgage-backed securities.

PwC, Citco Must Face Madoff Feeder Fund Class Action

By David Bario |

Thought major investor class action litigation sparked by the Bernie Madoff affair was over? Think again.

Soulless Corporations Can't Be Witnesses, Judge Rules in Dole Case

By Scott Flaherty |

The U.S. Supreme Court may treat corporations like people when it comes to making political donations, but there's at least one place where only a human being will do: a Delaware witness stand.

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.