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Securities Litigation

Skadden, Arps, Slate, Meagher & Flom LLP and affiliates (“Skadden”) handles some of the most challenging, high-stakes securities litigation matters — “bet-the-company” cases that demand a full range of skills, in and out of the courtroom, as well as deep experience with often-overlapping internal investigations, derivative actions and investigations by the SEC and other federal or state regulators. The outcome of these proceedings can be vital to a company’s future, and Skadden’s approach of assembling collaborative teams of advisers with deep and relevant experience across our worldwide platform and the full range of disciplines is key to our successful track record on behalf of clients.

We have been selected as lead defense counsel in several of the largest and most important securities class actions in U.S. history, including representing Cendant Corporation, DaimlerChrysler AG, Waste Management, Inc. and the underwriters in the WorldCom bondholder litigation, among others. Most recently, we also have represented clients in cutting-edge litigation, including Blackberry, News Corp., Sprint and all the major financial institutions. Skadden has successfully represented clients in significant and precedent-setting cases in appellate courts and before the U.S. Supreme Court, including Merrill Lynch in a unanimous win in Merrill Lynch v. Dabit. We also represented Merrill Lynch in securing two major victories before the U.S. Court of Appeals for the Second Circuit. This includes Lentell v. Merrill Lynch, in which the Second Circuit adopted a standard for loss causation that has been cited hundreds of times; and Wilson v. Merrill Lynch, which was the first auction rate securities (ARS) class action arising from the market collapse to be decided by an appellate court.

Our work includes representing financial institutions in matters related to subprime loans and the credit crisis, such as mortgage-backed securities litigation, securities class and derivative actions, and ERISA-related litigation. We also are representing clients in numerous cases related to the foreign exchange/commodities industries, addressing issues pertaining to foreign exchange rates, market manipulation and price-fixing allegations. Additionally, we handle the broad range of issues that arise when any corporation, director or officer faces securities, class or derivative-related claims.

Skadden plays an active role in addressing and resolving litigation claims in the M&A context. In the last several years, our attorneys have defeated challenges to hundreds of billions of dollars in deals, in cases filed in Delaware and across the United States.

We advise on a wide variety of securities-related regulatory matters at the federal and state levels, and provide assistance in connection with investigations and proceedings before the SEC, the Commodity Futures Trading Commission, the Department of Justice, the offices of various state attorneys general, the Financial Industry Regulatory Authority and the New York Stock Exchange. We also have advised boards of directors and special committees in investigations of shareholder demands, accounting issues and other corporate governance matters. Many of our attorneys have valuable knowledge and experience from previous government service with the DOJ, SEC and CFTC.

Accolades

Our group has received many top rankings and recognitions, including:

  • ranked in the top tier for securities litigation by U.S. News — Best Lawyers “Best Law Firms” 2015.
  • ranked in the top 10 by the “Securities and White Collar Law360 100,” which lists the firms that have dedicated the most partners globally to securities litigation, government financial investigations and enforcement, and white collar defense.
  • selected by The American Lawyer as a finalist in its 2014 Litigation Department of the Year issue.
  • for the fourth consecutive time named a member of the “Fearsome Foursome” — the four elite law firm litigation practices — and named as one of only three “powerhouses” for Securities and Finance Litigation in a survey of corporate counsel conducted by BTI Consulting and published in 2014. We also were named as one of Law360’s Securities Groups of 2013.
  • recognized for our defense of UniCredit S.p.A. in Madoff-related litigation in the 2013 Financial Times’ U.S. “Innovative Lawyers” report, which ranked Skadden first overall.
  • ranked in the top tier in securities litigation in Chambers USA 2014 and the U.S. Legal 500 2013. According to Chambers USA 2014, the group is notable for the “strength, determination and capability of its litigators who are often engaged for bet-the-company pieces of litigation, representing both major financial institutions and international public companies.” Legal 500 said Skadden is “the top choice for ‘make or break’ litigation.”

Our Clients

We handle securities, derivative and deal-related litigation matters for clients in a wide range of industries. Recently concluded representations include:

Banks and Financial Institutions

  • Bank of America/Merrill Lynch, UBS, Royal Bank of Scotland, Société Générale, CIBC, Crédit Agricole and BNP Paribas, among others, in residential mortgage-backed securities (RMBS) and other securities cases brought in state and federal courts and FINRA arbitrations throughout the country arising out of the credit crisis.
  • Bank of America:

    • in the dismissal of claims that it aided and abetted fraud by providing a line of credit to Herbalife;
    • in the dismissal of a lawsuit brought by a Florida investor alleging common law fraud, breach of fiduciary duty and negligent misrepresentation concerning its acquisition of Merrill Lynch;
    • and certain of its affiliates in securing a dismissal by the magistrate judge in an action against Bank of America entities brought by the DOJ under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Subsequently, the District Court Judge granted the DOJ leave to replead and the case was settled;
    • and several former Merrill Lynch officers and directors in an affirmance of the dismissal of two double-derivative suits that sought to compel the BofA board to force its Merrill subsidiary to bring various claims against certain of Merrill’s former officers and directors in connection with Merrill’s allegedly risky investments in collateralized debt obligations; and
    • in securing the dismissal of a New York State action brought by Phoenix Light SF Ltd. and other special-purpose vehicles affiliated with former financial institution Fortis Bank NV/SA alleging that affiliates of Fortis had been defrauded in connection with their purchase of approximately $210 million in residential mortgage-backed securities and that the claims had been assigned to the plaintiffs.
  • the underwriting syndicate in the dismissal of an action in federal court seeking to file a second amended complaint in a federal securities class action brought on behalf of purchasers of certain securities issued by Bank of America Corporation.
  • Barclays Bank in a FERC investigation regarding alleged market manipulation involving power trading in the western United States during late 2006 through 2008 and related federal court litigation.
  • subsidiaries of BlackRock Inc. in the affirmance of a district court’s dismissal of excessive fee claims.
  • BNP Paribas in securing the dismissal of federal fraud and negligent misrepresentation claims arising from BNP’s marketing and underwriting of notes issued by Schmolz + Bickenbach, a global steel manufacturer.
  • an underwriting syndicate of certain Deutsche Bank debt offerings in the Second Circuit’s affirmance of the dismissal of a class action concerning the bank’s exposure to subprime and other mortgage-backed securities.
  • FMR LLC and Fidelity Brokerage Services, LLC in securities class action litigation brought in the U.S. District Court in the Southern District of New York regarding high-frequency trading.
  • former investment advisers and officers of five Invesco Van Kampen Funds in the dismissal of a New York State shareholder derivative suit alleging breach of fiduciary duties and wasted corporate assets by causing the funds to redeem auction rate preferred securities at par value.
  • J.P. Morgan Chase in the dismissal of a federal class action brought by the Louisiana Municipal Police Employees Retirement System alleging that J.P. Morgan Chase failed to provide the “prevailing” rate on foreign exchange transactions executed through its AutoFX program.
  • MacAndrews & Forbes Holdings Inc. and certain directors in securing the affirmance of a dismissal in a Delaware shareholder class action relating to controlling stockholder squeeze-out transactions. This opinion was the first to dismiss a lawsuit challenging a controlling stockholder merger conditioned on both procedural protections.
  • Merrill Lynch in securing the dismissal with prejudice of a lawsuit brought by Town North Bank concerning collateralized debt obligations that Town North purchased from Merrill Lynch as well as numerous other banks also named as defendants.
  • Morgan Stanley Private Equity Asia III Holdings in securing a denial for preliminary injunction in a class action challenging a going-private transaction involving Feihe International.
  • Morgan Stanley Private Equity Asia III Holdings in securing the dismissal of a Utah class action challenging a going-private transaction involving Feihe International.
  • Putnam Investments in the Fourth Circuit affirmance of the dismissal of a securities fraud action related to mutual fund “market timing.”
  • Royal Bank of Scotland Group in the dismissal of a federal action brought by Woori Bank alleging false and misleading misrepresentations and omissions in connection with $120 million in collateralized debt obligations.
  • UBS Financial Services Incorporated of Puerto Rico, UBS Trust Company of Puerto Rico and directors of a group of mutual funds in the dismissal of remanded shareholder derivative claims in the U.S. District Court for the District of Puerto Rico alleging violations of federal securities and Puerto Rico laws. Prior to this, Skadden was successful in obtaining a grant of certiorari from the U.S. Supreme Court to resolve a circuit court split over the standard of review for appeals of dismissals pursuant to Rule 23.1 of the Federal Rules of Civil Procedure.
  • UniCredit, Pioneer Alternative Investments, Tremont Group Holdings and others in more than 25 actions stemming from the Bernard Madoff scandal, including litigation in federal trial and appellate courts in New York; state court actions in New York, California, Delaware, Massachusetts, Florida, Colorado, New Mexico and Washington; and, most notably, securing the dismissal of $60 billion in trebled RICO claims and common law claims brought against UniCredit by Irving Picard, the trustee for the Securities Investor Protection Act liquidation of Bernard L. Madoff Investment Securities, for which the U.S. Supreme Court denied certiorari.

Education

  • officers and directors of Apollo Education Group, Inc. in securing a settlement of a securities class action following dismissal with prejudice, judgment in favor of defendants and briefing of an appeal before the Ninth Circuit.
  • Citigroup Inc. in securing the dismissal with prejudice of a shareholder class action arising out of a nearly $600 million transaction relating to Citi’s subsidiary, Student Loan Corporation.
  • New Oriental Education & Technology Group Inc. in securing a settlement of a putative securities class action filed following an SEC inquiry and short seller attack.

Energy

  • Anadarko Petroleum Corporation in the dismissal of all but one alleged misstatement relating to the company’s investment and liability exposure for the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
  • Exelon Corporation in the dismissal of a class action brought by shareholders of Constellation Energy Group in connection with its $7.9 billion merger with Exelon.
  • GenOn Energy in litigation in the Delaware Court of Chancery and Texas state and federal courts arising out of the $1.7 billion stock-for-stock merger between GenOn and NRG Energy.
  • 16 underwriters of LinnCo, LLC’s IPO in securing the dismissal of a federal securities class action alleging that the defendants failed to disclose to LinnCo investors that Linn Energy LLC was allegedly overstating the cash flow available for distribution to Linn Energy unit holders such as LinnCo.

Health Care, Life Sciences and Pharmaceuticals

  • Amerigroup Corporation in successfully settling shareholder litigation in the Delaware Court of Chancery seeking to enjoin its proposed $4.9 billion acquisition by WellPoint.
  • current and former directors of E. I. du Pont de Nemours and Co. in the dismissal of a shareholder derivative lawsuit alleging breaches of fiduciary duty in connection with litigation against Monsanto Co.
  • Express Scripts in the settlement of a federal class action brought by shareholders of Medco Health Solutions related to Express Scripts’ acquisition of Medco. Skadden also obtained a dismissal of antitrust claims brought in Pennsylvania federal court.
  • Pfizer Inc. in securing a complete dismissal of a shareholder derivative suit brought against certain former and current officers and directors arising out of its settlements with the government concerning alleged FCPA violations.
  • Pfizer Inc. and its CEO in shareholder derivative litigation relating to FCPA issues at certain Pfizer subsidiaries.
  • Stryker Corporation in federal and state class actions in connection with Stryker’s tender offer to acquire all of the outstanding shares of Orthovita involving allegations that Orthovita’s directors breached their fiduciary duties.

Retail

  • Abercrombie & Fitch, Co. in securing a settlement of a federal stockholder derivative action following a demand to inspect the company’s books and records pursuant to Section 220 of the Delaware Code for the purpose of investigating alleged wrongdoing.
  • the independent directors of Inland American Real Estate Investment Trust in the dismissal with prejudice of a class action that challenged the value of shares sold to investors through a distribution reinvestment plan.
  • the board of directors of Kid Brands in securing the affirmance by the Third Circuit of the dismissal of a shareholder class action alleging violations of the Securities Exchange Act in connection with customs compliance violations by the company’s subsidiaries, and in a related shareholder derivative action that was dismissed entirely.
  • members of the special committee of the board of directors of Steinway Musical Instruments Inc. in securing the settlement of a shareholder class action lawsuit that challenged the company’s go-private sale to Paulson & Co.
  • Swisher Hygiene, Inc. in settling a securities class action in federal court brought on behalf of all public investors who purchased securities of Swisher Hygiene from May 16, 2011 through March 28, 2012, who alleged that the company issued false and misleading analyst reports and ratings about its business operations and prospects.

Technology and Communications

  • BlackBerry (f/k/a Research in Motion Limited (RIM)) and certain of its officers in the dismissal with prejudice of a securities class action alleging that RIM made materially false and misleading statements regarding its financial condition and business prospects. The case is currently on appeal in the Second Circuit.
  • current and former members of the board of directors of Hewlett-Packard Company in securing dismissals in two separate shareholder derivative actions that arose from the highly publicized departure of HP’s one-time CEO Mark Hurd and HP’s acquisition of 3PAR.
  • Computer Sciences Corp. and certain of its directors in the settlement of a federal securities class action complaint and dismissal of a related derivative litigation challenging certain statements related to the company’s performance of its agreement with the U.K. National Health Service to computerize the medical records for all U.K. residents in the areas covered by the agreement.
  • News Corp., its subsidiary NI Group, and Rupert and James Murdoch, in the dismissal of a securities fraud class action arising out of news-gathering practices at News of the World and The Sun.
  • former directors of Novell in securing a summary judgment decision in favor of former directors of Novell in a Delaware Chancery Court proceeding involving allegations of breach of fiduciary duty in connection with Novell’s acquisition by Attachmate in 2011.
  • Spanish Broadcasting System, Inc. in winning summary judgment on all counts against certain of its preferred stockholders who sought relief arising from purported breaches of a certificate of designations, based on their allegation that a “Voting Rights Triggering Event” had occurred.
  • Travelzoo Inc. and certain of its officers in securing the dismissal of a securities class action lawsuit brought challenging certain statements related to the company’s growth and its Getaways business. We also secured the dismissal of all claims against Travelzoo Inc. and certain of its directors in two separate derivative actions alleging breaches of fiduciary duties and unjust enrichment.

Transportation and Automotive

  • Autoliv in a securities class action involving alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act.
  • the former chief executive officer of Porsche Automobil Holding SE in successfully applying the U.S. Supreme Court’s decision in Morrison v. National Australia Bank on the extraterritorial reach (or lack thereof) of Section 10(b) of the Securities Exchange Act of 1934, thus securing a Second Circuit affirmance of the dismissal of federal claims brought against him, Porsche and certain other former officers and directors by several dozen hedge funds alleging misrepresentations and market manipulation in connection with Porsche’s attempted takeover of Volkswagen AG.