We represent a wide variety of clients in litigation relating to the current financial crisis. Our clients in these unprecedented matters include leading global financial institutions, major private funds and other preeminent corporations from throughout the United States and around the world. Our litigators possess unique experience in highly complex financial investigations and litigations and can draw on resources and expertise from across the firm – in areas including securities and bank regulation, investment management, derivatives, insolvency and mergers and acquisitions.
Much of our financial crisis-related litigation work is confidential because it arises in the context of nonpublic investigations and pre-litigation counseling. Nonetheless, the following are sample matters that have been publicly disclosed.
- We represent the current and past members of the Board of Directors of Bank of America named as defendants in multiple civil shareholder derivative suits relating to Bank of America’s acquisition of Merrill Lynch. The claims in these cases include Federal securities law claims that are pending in consolidated litigation in the Southern District of New York and claims for breach of fiduciary duty pending in the Southern District of New York and Delaware Chancery Court. We have also represented current and past Bank of America directors and officers in related investigations by the New York Attorney General, the SEC and certain congressional committees.
- We have represented PricewaterhouseCoopers US in a number of its major financial crisis matters, including:
- All civil litigations and investigations relating to Bernard Madoff, including in a multi-district litigation in the Southern District of Florida related to the Optimal Funds which was recently dismissed in its entirety.
- Securities litigation arising out of the deterioration of CIT Group’s subprime home mortgage and student loan portfolios.
- A putative class action related to Charles Schwab arising out of the collapse of the mortgage-backed securities market, which we succeeded in having dismissed at the pleadings stage.
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- We successfully represented Sterling Equities, the owners of the New York Mets, in obtaining significant favorable decisions in connection with highly publicized litigation arising from the Madoff liquidation.
- We have been representing Morgan Stanley in its most significant financial crises litigation, including:
- Purported class action lawsuits in the Southern District of New York, brought on behalf of investors who purchased residential mortgage-backed pass-through certificates underwritten by Morgan Stanley in 2006 and 2007. Recently, the District Judge granted Morgan Stanley’s motion to dismiss the lead plaintiff’s complaint, accepting Davis Polk’s arguments on standing and statute of limitations grounds.
- Lawsuits arising out of its announced $9.4 billion loss for the fourth quarter of 2007 resulting from subprime-related trading write-downs. The actions include a purported shareholder class action, a shareholder derivative suit and federal lawsuits brought under ERISA.
- A putative class action in the Southern District of New York brought by Abu Dhabi Commercial Bank asserting contract, fraud and fiduciary duty claims on behalf of all purchasers of investment-grade mezzanine capital notes issued by a structured investment vehicle that in turn invested in asset-backed securities, including U.S. residential mortgage-backed securities and collateralized debt obligations. Recently, we successfully defeated a motion for class certification.
- We also represent Morgan Stanley, and play a lead coordinating role for an industry-wide defense group, in five actions brought against the leading prime brokerage firms by certain issuers and their shareholders who claim that the value of their securities has been depressed by manipulative short-selling practices.
- We represented the Audit Committee of Bear Stearns in its investigation into the collapse of two of its sponsored hedge funds.
- We represent multiple financial institutions (including broker-dealers and hedge funds) in a variety of investigations relating to short selling, including SEC and DOJ investigations relating to short sales of certain financial institutions’ securities at critical points during the financial crisis.
- We successfully represented a group of six banks, led by Citigroup and Deutsche Bank, in New York and Texas lawsuits relating to the financing of one of the largest-ever leveraged buyouts – the acquisition of Clear Channel Communications by affiliates of Bain Capital and TH Lee Partners. After trial commenced, the litigation was settled as part of a restructuring of the transaction at a lower price and with reduced loans by the bank group.
- We represented E*TRADE in a variety of regulatory investigations and securities and derivative litigations in connection with its announcements regarding losses stemming from exposure to second-lien mortgages and mortgage-backed securities.
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