Securities & Fiduciary Duty Litigation
More and more companies every year face securities, derivative, M&A, and related litigation. Often complex and always costly, these matters call for top-quality trial lawyers with deep experience in all phases of a dispute, from eliminating or reducing exposure early on, to navigating the complex issues and decisions involved in parallel government investigations and private litigation, and positioning clients for summary resolutions that avoid the uncertainty and expense of a trial. When trial is necessary, we have a deep bench of highly experienced trial veterans.
HOW WE HELP
National in scope, Seyfarth’s Securities & Fiduciary Duty Litigation team drives results within an efficient, high-value service model designed to reduce risk, limit negative exposure, and protect the client’s bottom line. Our deep experience successfully defending individuals, companies, and financial institutions has given us a lead trial counsel and trusted advisor role in a wide variety of securities, financial, and corporate governance disputes, including complex securities class actions, shareholder litigation, derivative claims, and regulatory investigations.
Our team includes highly rated and nationally known securities litigators, former state and federal prosecutors, as well as partners with deep experience dealing with government agencies and is bolstered by Seyfarth’s Financial Industry Regulatory Authority (FINRA) defense team, known for its success record in large FINRA arbitration matters.
Our clients range from large public companies and investment banks to middle- and upper-middle-market companies in technology, biotech, hospitality, and financial services. Our team defends these companies, as well as their officers and directors, in shareholder derivative actions, class actions, government investigations, and proceedings brought by the SEC, FINRA, DOJ and other federal and state agencies, and in internal investigations. We also help clients avoid litigation or reduce exposure by establishing compliance protocols, facilitating cooperation with investigations, and analyzing strategic responses and defenses to threatened or actual litigation.
THE SEYFARTH EXPERIENCE
Members of the Securities & Fiduciary Duty Litigation team embrace Seyfarth’s dedication to rates below those of comparable firms, technology-driven efficiency and responsiveness, combined with right-sized staffing and effective case management techniques. Our litigators collaborate with clients to develop tailor-made alternative fee arrangements from a variety of models. The value proposition—lower cost and top-of-the-line quality and effectiveness—has been recognized by our clients and by The Legal 500.
Among the clients our Securities & Fiduciary Duty Litigation team has represented:
- Individuals. Represented individual defendants in securities actions alleging violations of Rule 10 b-5 and state law. The plaintiffs claim eight individual defendants affiliated with a bankrupt e-commerce and t-commerce company made misrepresentations and omissions concerning the company’s prospects.
- Individual Directors & Officers. Represented all directors and officers in two similar but separate securities actions filed in the Northern District of California alleging violations of Rule 10 b-5 and state law.
- Breach of Fiduciary Duty. Represented a large Canadian bank in a proceeding in Delaware Bankruptcy Court in which the bank was accused of breach of fiduciary duty. A trustee of a litigation trust sued multiple defendants in connection with a failed attempt to sell the company pre-bankruptcy. The court issued an opinion dismissing the aiding-and-abetting breach of fiduciary duty count against the bank, which the plaintiffs modelled on claims in other high-profile cases. The dismissal of the claim—upheld on appeal—was of great importance because it eliminated any reputational risk.
- Shareholder Litigation. Defended the directors and officers of a health sciences company in four related shareholder litigations brought as a result of an announcement by the client that it would be acquired by a biotech company through a tender offer. The cases were filed by the plaintiff’s Illinois-based stockholders in a strategic effort to avoid the more defense-friendly courts of Delaware, where the client was incorporated. Our team prevented the courts from issuing any injunctive relief by opposing the plaintiffs’ motions, producing over 300,000 documents in one week, presenting strong deposition testimony undercutting the plaintiffs’ theories, and successfully negotiating a de minimis settlement with no payment to the shareholders.
- Special Committee of the Board of a Financial Institution. Investigated, on behalf of a special committee of the board of a large financial institution, alleged misconduct by employees of the institution. The issues investigated are the subject of current or previous securities lawsuits, derivative lawsuits, and regulatory investigations. Our team also provided advice on related securities law and corporate governance issues.
- Battle for Corporate Control. Represented a fast-growing California-based nutrient-infused water company, as well as its founder and largest stockholder, in a battle for corporate control against several other large stockholders and former directors in Delaware Chancery Court, the Northern District of Texas, and the Middle District of North Carolina. The case involved several issues under Delaware law and the federal securities laws concerning voting rights of stockholders, interference with contracts, materiality of public statements regarding credentials, and standards of judicial review to be decided in the case.
- FINRA Arbitration. Secured a complete defense verdict in a FINRA arbitration seeking over $68 million for a full-service investment bank and self-clearing broker-dealer in one of the largest and most complex FINRA arbitrations involving a clearing firm in recent years. After 39 days of evidentiary hearings, a three-person panel of FINRA arbitrators denied all of the claims by a former customer.
- Securities Class Action. Represented a former controller in a securities class action involving restatements of financial statements and weaknesses in internal controls.
- Defense of Class Action Complaint. Defended a Chinese-based manufacturer of electronic components and two of its directors in a consolidated federal securities class action and a companion shareholder derivative case filed in Delaware Chancery Court. The matter resulted in a de minimis settlement, under $500,000 in insurance proceeds.
- White Collar Investigation. Represented the former corporate controller of a public company in investigations of the company’s restatements, which resulted in a net revenue reduction of $38 million, as well as multiple class action lawsuits and an SEC investigation. First, a special committee investigated potential claims against management. Our team quickly digested hundreds of thousands of corporate documents, researched applicable law, developed case themes, and prepared the client for testimony and interview. The committee concluded that the company would not prevail on any claims against our client.
- SEC Investigation. Represented a financial institution and its senior principals in connection with a confidential SEC investigation regarding valuations set by hedge fund investors in one of the client’s portfolio companies.
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More and more companies every year face securities, derivative, M&A, and related litigation. Often complex and always costly, these matters call for top-quality trial lawyers with deep experience in all phases of a dispute, from eliminating or reducing exposure early on, to navigating the complex issues and decisions involved in parallel government investigations and private litigation, and positioning clients for summary resolutions that avoid the uncertainty and expense of a trial. When trial is necessary, we have a deep bench of highly experienced trial veterans.
HOW WE HELP
National in scope, Seyfarth’s Securities & Fiduciary Duty Litigation team drives results within an efficient, high-value service model designed to reduce risk, limit negative exposure, and protect the client’s bottom line. Our deep experience successfully defending individuals, companies, and financial institutions has given us a lead trial counsel and trusted advisor role in a wide variety of securities, financial, and corporate governance disputes, including complex securities class actions, shareholder litigation, derivative claims, and regulatory investigations.
Our team includes highly rated and nationally known securities litigators, former state and federal prosecutors, as well as partners with deep experience dealing with government agencies and is bolstered by Seyfarth’s Financial Industry Regulatory Authority (FINRA) defense team, known for its success record in large FINRA arbitration matters.
Our clients range from large public companies and investment banks to middle- and upper-middle-market companies in technology, biotech, hospitality, and financial services. Our team defends these companies, as well as their officers and directors, in shareholder derivative actions, class actions, government investigations, and proceedings brought by the SEC, FINRA, DOJ and other federal and state agencies, and in internal investigations. We also help clients avoid litigation or reduce exposure by establishing compliance protocols, facilitating cooperation with investigations, and analyzing strategic responses and defenses to threatened or actual litigation.
THE SEYFARTH EXPERIENCE
Members of the Securities & Fiduciary Duty Litigation team embrace Seyfarth’s dedication to rates below those of comparable firms, technology-driven efficiency and responsiveness, combined with right-sized staffing and effective case management techniques. Our litigators collaborate with clients to develop tailor-made alternative fee arrangements from a variety of models. The value proposition—lower cost and top-of-the-line quality and effectiveness—has been recognized by our clients and by The Legal 500.
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Related Practices
Additional Resources
Among the clients our Securities & Fiduciary Duty Litigation team has represented:
- Individuals. Represented individual defendants in securities actions alleging violations of Rule 10 b-5 and state law. The plaintiffs claim eight individual defendants affiliated with a bankrupt e-commerce and t-commerce company made misrepresentations and omissions concerning the company’s prospects.
- Individual Directors & Officers. Represented all directors and officers in two similar but separate securities actions filed in the Northern District of California alleging violations of Rule 10 b-5 and state law.
- Breach of Fiduciary Duty. Represented a large Canadian bank in a proceeding in Delaware Bankruptcy Court in which the bank was accused of breach of fiduciary duty. A trustee of a litigation trust sued multiple defendants in connection with a failed attempt to sell the company pre-bankruptcy. The court issued an opinion dismissing the aiding-and-abetting breach of fiduciary duty count against the bank, which the plaintiffs modelled on claims in other high-profile cases. The dismissal of the claim—upheld on appeal—was of great importance because it eliminated any reputational risk.
- Shareholder Litigation. Defended the directors and officers of a health sciences company in four related shareholder litigations brought as a result of an announcement by the client that it would be acquired by a biotech company through a tender offer. The cases were filed by the plaintiff’s Illinois-based stockholders in a strategic effort to avoid the more defense-friendly courts of Delaware, where the client was incorporated. Our team prevented the courts from issuing any injunctive relief by opposing the plaintiffs’ motions, producing over 300,000 documents in one week, presenting strong deposition testimony undercutting the plaintiffs’ theories, and successfully negotiating a de minimis settlement with no payment to the shareholders.
- Special Committee of the Board of a Financial Institution. Investigated, on behalf of a special committee of the board of a large financial institution, alleged misconduct by employees of the institution. The issues investigated are the subject of current or previous securities lawsuits, derivative lawsuits, and regulatory investigations. Our team also provided advice on related securities law and corporate governance issues.
- Battle for Corporate Control. Represented a fast-growing California-based nutrient-infused water company, as well as its founder and largest stockholder, in a battle for corporate control against several other large stockholders and former directors in Delaware Chancery Court, the Northern District of Texas, and the Middle District of North Carolina. The case involved several issues under Delaware law and the federal securities laws concerning voting rights of stockholders, interference with contracts, materiality of public statements regarding credentials, and standards of judicial review to be decided in the case.
- FINRA Arbitration. Secured a complete defense verdict in a FINRA arbitration seeking over $68 million for a full-service investment bank and self-clearing broker-dealer in one of the largest and most complex FINRA arbitrations involving a clearing firm in recent years. After 39 days of evidentiary hearings, a three-person panel of FINRA arbitrators denied all of the claims by a former customer.
- Securities Class Action. Represented a former controller in a securities class action involving restatements of financial statements and weaknesses in internal controls.
- Defense of Class Action Complaint. Defended a Chinese-based manufacturer of electronic components and two of its directors in a consolidated federal securities class action and a companion shareholder derivative case filed in Delaware Chancery Court. The matter resulted in a de minimis settlement, under $500,000 in insurance proceeds.
- White Collar Investigation. Represented the former corporate controller of a public company in investigations of the company’s restatements, which resulted in a net revenue reduction of $38 million, as well as multiple class action lawsuits and an SEC investigation. First, a special committee investigated potential claims against management. Our team quickly digested hundreds of thousands of corporate documents, researched applicable law, developed case themes, and prepared the client for testimony and interview. The committee concluded that the company would not prevail on any claims against our client.
- SEC Investigation. Represented a financial institution and its senior principals in connection with a confidential SEC investigation regarding valuations set by hedge fund investors in one of the client’s portfolio companies.
Related Trends
Related News & Insights
Attorney Publication
12/05/2024
Ellen Murphy, Karen Bitar, Scott Morvillo, and Nicole Lloret Write on DOJ & SEC Focusing on AI in New York Law Journal
Attorney Publication
11/20/2024
Ameena Majid and Giovanna Ferrari Write on Potential Impact of Trump Administration on Climate Reporting in Law360
Media Mentions
11/12/2024
Seyfarth's Legal Update on Impact of Trump Presidency on Climate Reporting Highlighted in Chief Investment Officer
Legal Update
11/06/2024
What Does a Trump Presidency Mean for Mandatory Climate Reporting?
Recognition
Recognition
11/21/2024
Nine Seyfarth Attorneys Selected as 2024 “Top Lawyers” by Boston Magazine
Recognition
11/07/2024
Seyfarth Extends Rankings in ‘2025 Best Law Firms’ by Best Lawyers
Recognition
10/03/2024
Seyfarth Ranked Tier 1 Nationally for Labor & Employment in Benchmark Litigation 2025; 10 Seyfarth Lawyers Recognized
Recognition
06/12/2024
Seyfarth Earns Top Tier Rankings Again in The Legal 500