Securities & Shareholder Litigation

Overview

“Significant commercial litigation practice, offering sought-after representation across a range of cases including securities…”

— Chambers USA

Today’s businesses are wrestling with increasing scrutiny by the government as well as shareholder activism, putting them at a higher than ever risk of securities and shareholder suits. In this type of environment, you need counsel who understands the threats and are prepared to help you find a solution.

Blank Rome’s securities and shareholder litigators know the stakes can be high and are prepared to take on these claims. We have significant experience representing clients in all facets securities class actions, shareholder litigation, corporate internal investigations, regulatory investigations and enforcement proceedings. Additionally, our attorneys regularly work to get in front of a potential suit by conducting internal reviews of our client’s securities and shareholder issues and providing litigation counsel on compliance and best practices. 

How We Can Help

Securities Class Action Litigation

We represent clients in class actions alleging violations of the Federal securities laws (including violations of the Securities Act, Securities Exchange Act, and the Investment Company Act) in Courts across the United States. These bet-the-company cases traditionally pose a significant risk not only to the company, but also to its senior management and directors, who are often named as defendants. 

Our securities litigation practice has represented issuers, directors, officers, and other corporate executives in a broad range of securities class actions, including:

  • alleged violations of the Securities and Exchange Act and the Securities Act 
  • disclosure violations arising from alleged accounting fraud to financial restatements
  • insider trading and misappropriation
  • projections and forecasts
  • internal controls failure

Regulatory Enforcement 

We routinely defend companies, directors, and officers in matters commenced by government regulators including the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”), state securities regulators, and attorneys general, and other governmental agencies and self-regulatory organizations. These proceedings range from informal inquiries and formal investigations to administrative and judicial enforcement actions. Importantly, some of our most successful results have been preventing an actual enforcement proceeding from being filed.

Shareholder Litigation

We also frequently help defend civil lawsuits (including shareholder derivative actions) alleging state statutory or common law business torts against officers and directors. This frequently includes claims for breach of fiduciary duty, fraud, mismanagement, negligence, and waste of corporate assets. Our goal is to help our clients address, limit, or avoid the huge financial exposure, time commitment, and operational distractions these proceedings often cause.

What Sets Us Apart

  • Law360 named Blank Rome a 2017 “Pennsylvania Powerhouse” and recognized “its prolific national litigation practice and deep bench strength.”
  • Our litigation practice is recognized in Chambers USA:
    • “Significant commercial litigation practice, offering sought-after representation across a range of cases including securities, antitrust, environmental, construction and cybersecurity disputes. Further highlighted for its federal appellate work and for its experience in class action defense.”
    • Clients remarked: “The litigation team was excellent. Each of the lawyers brought a very interesting element to the team and they blended together well. They were great and I would highly recommend them!"
       

Experience

Securities Class Action 

  • Represented defense contractor and certain officers and directors in consolidated class action in the Eastern District of Pennsylvania for violations of the Securities and Exchange Act of 1934 following indictment of company and Chairman for alleged government contracting fraud.  Resulting in a favorable settlement for defendants.
  • Represented multi-state bank in securities class action filed in the District of New Jersey relating to allegations of fraudulent business model.  Motion to Dismiss granted by District Court and affirmed by the Third Circuit Court of Appeals.
  • Represented software producer and certain of its officers and directors in consolidated class action in the Southern District of New York following corporation’s restatement of earnings for two fiscal years and initiation of SEC investigation.  Represented an e-mail service company and its directors and officers in an action pending in the District of Kansas alleging claims under the Section 10(b) of the Securities and Exchange Act of 1934. Motion to Dismiss granted by District Court.
  • Represented a specialty generic pharmaceutical company and certain of its directors and officers in a securities class action suit predicated on allegations of misleading statements concerning revenue, reserves, and income. 
  • Represented former director and officer of large retail (catalog and mail order) company in a consolidated class action filed in the Northern District of Illinois concerning allegations of securities fraud under Section 10(b) and 20(a) of the Securities and Exchange Act of 1934.  Represented board of directors of publicly traded defense contractor in shareholder derivative action relating to breach of fiduciary duty allegations stemming from indictment of former Chairman.
  • Represented former officers of bankrupt major auto components manufacturer against allegations of accounting fraud in class action lawsuits in the Eastern District of Michigan, breach of fiduciary duties lawsuit in District of Delaware and related grand jury and SEC investigations in the Southern District of New York.
  • Represented cable television channel and certain of its officers and directors in securities fraud class action in Southern District of Florida.
  • Represent private asset management entity in connection with Madoff-related issues including, but not limited to, defensive litigation strategies and resolving possible claims related thereto. In this regard, Blank Rome has a unique, extensive and in depth knowledge of virtually all Madoff- related matters that can provide sophisticated legal advice relating to issues arising out of the on-going, inter-related Madoff proceedings.

Securities Enforcement 

  • Represented a former employee of Credit Suisse in an investigation commenced by the Securities and Exchange Commission regarding CDOs.
  • Represented registered investment adviser in trial before Securities and Exchange Commission concerning the sale of Class B mutual funds.
  • Represented publicly traded financial institution in FINRA investigation concerning municipal securities.
  • Represented former hedge fund founder in SEC investigation regarding insider trading.
  • Represented pharmaceutical manufacturer in SEC administrative trial to revoke the registration of its publicly traded securities.
  • Represented various natural gas and electricity traders with respect to investigations by Commodities Futures Trading Commission, Federal Energy Regulatory Commission, U.S. Department of Justice and several state Attorneys General into California energy crisis.

Shareholder Liitgation 

  • Representing a 50% shareholder of an industry-leading hair product company in an action against the company’s other 50% shareholder challenging the enforceability of a drag-along provision in the company’s shareholder agreement. The provision purports to require a shareholder to sell his shares if the company receives an offer for purchase of its shares for a certain minimum amount. The litigation was triggered when the company received an offer for purchase. Blank Rome attorneys negotiated a settlement which ultimately yielded a superior offer for the company.
  • Defended a large a real estate investment trust (REIT) in a class action seeking injunction of the acquisition of the REIT by a real estate investor group. The class plaintiffs alleged that the REIT’s board breached their fiduciary duties to the shareholders by, among other things, failing to maximize shareholder value and failing to provide material information in the preliminary proxy statement. After resolving the litigation by making additional disclosures to shareholders along with a small monetary payment to plaintiffs’ counsel, the transaction was accomplished.
     

Team

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