Cases : Corporate Governance

KM represented an English investor in a shareholder derivative lawsuit against officers and directors of HSBC Holdings and its subsidiaries, alleging that HSBC facilitated money laundering operations out of New York City. In a matter of first impression, we established the right of English shareholders to bring derivative claims against English companies in New York state courts. The litigation settled for $72.5 million, the then-largest foreign derivatives settlement ever reached and one of the largest insurer-funded cash payments achieved in a U.S. derivative lawsuit.

KM acted as co-lead counsel representing The Wayne County Employees’ Retirement System in a securities derivative action against Bio-Rad Laboratories Inc. The case related to the company’s violation of the books and records provisions of the FCPA with respect to certain aspects of its operations in Russia, Thailand and Vietnam, resulting in enforcement action by the SEC and DOJ. Ultimately, Bio-Rad paid $55 million to resolve the FCPA enforcement actions. As a result of the litigation, Bio-Rad adopted industry-leading, state-of-the-art corporate governance and compliance measures that directly addressed plaintiffs’ allegations and provided for greater effectiveness of the Board of Directors in responding to potential violations of the FCPA and similar anti-corruption laws.

KM represented Skandia Life Insurance as counsel in securities derivative litigation against Pfizer in connection with Pfizer’s off-label promotion of its Bextra, Geodon, Zyvox and Lyrica drugs, for which it paid record civil and criminal fines, including the largest criminal fine in U.S. history. The litigation resulted in a $75 million settlement and numerous, significant changes to Pfizer’s corporate governance structure and compliance processes. Some of the changes made included the implementation of a Committee of the Board of Directors to oversee regulatory and compliance issues, external complaints regarding Pfizer's compliance, and compliance programs in newly acquired companies, and the establishment of an ombudsman program through which employees can surface complaints.

In re Isolagen Inc. Securities & Derivative Litigation, No. 05-cv-04983 (E.D. Pa 2009).  Lead counsel.  $4.4 million settlement.

KM led the high-profile Hollinger shareholder derivative litigation in the mid-aughts. We represented an investment firm in its efforts to stop egregious company fund withdrawals being made by Conrad Black, the company’s then-CEO. This ultimately required Mr. Black’s removal, a process KM attorneys put in motion through a series of sophisticated, little employed maneuvers in Delaware. Our client had approximately thirteen million shares of the company trading at less than ten dollars at the time of our engagement. When it became clear that Mr. Black was to be removed from his post as CEO, the stock rose from less than ten dollars a share to over twenty dollars. This rise represented an increase of more than $100 million in our client’s holdings alone, and a major victory upholding corporate governance standards.