Cases : Securities

• Case Axonic Capital LLC v. Gateway One Lending & Finance, LLC,
  No. 18-cv-05127 (C.D. Cal.). 
• Type Securities, Structured Finance
• Status Settled
• Representation of institutional investors in a lawsuit involving ABS backed by automobile loans. The case alleges that in marketing these ABS to plaintiffs and other investors, defendants TCF Bank and Gateway fraudulently and materially understated the key metric that investors rely upon to evaluate and price auto-loan ABS, resulting in millions of dollars of investor losses. The court recently denied TCF Bank’s and Gateway’s motion to dismiss. 

• Case Maverick Neutral Levered Fund, Ltd. v. Valeant Pharmaceuticals International, Inc.,
  No. 20-cv-02190 (D.N.J.).
• Type Securities
• Status Pending
• We are acting as counsel in this securities class action alleging that Valeant materially misrepresented its business model, touting artificial and unsustainable growth that was enabled by the company’s deceptive and illegal conduct. The case has important implications not only for Valeant’s shareholders, who sustained significant losses when the company’s misrepresentations were disclosed, but for corporate governance in the pharmaceutical industry as a whole, and for consumers: Valeant’s growth during the class period was driven not by “organic growth” sustained by volume increases and cost savings, but by price gouging (ex: within two days of acquiring the rights to Nitropress and Isuprel, two drugs used to treat emergency heart conditions, Valeant increased their prices by 212% and 525%, respectively).

• Case Dufoe v. DraftKings Inc., et al, 23-cv-10524 (D.Mass.). 
• Type Securities
• Status Pending
• Lead counsel to a class of investors that purchased non-fungible tokens (NFTs) from DraftKings Inc., which operates as a daily fantasy sports contest and sports betting company. The case alleges that DraftKings sold unregistered securities and ensured that money stayed on DraftKings’ private and exclusively controlled marketplace, propping up the market for an overall valuation of DraftKings’ NFTs and significantly harming investors.  

• Case Macovski v. Groupon Inc.,
  No. 20-cv-2581 (N.D. Ill.).
• Type Securities
• Status Settled
• We acted as co-lead counsel in this securities class action alleging that the company made materially false and misleading statements and failed to disclose to investors its financial health before ending its sale of physical goods and announcing the departure of two top executives. The case resulted in a $13.5 million settlement that has received final approval.

• Case Doyle v. Reata Pharmaceuticals, Inc.,
  No. 21-cv-00987 (E.D. Tex.).
• Type Securities
• Status Settled
• We are representing Wespath, the General Board of Pension and Health Benefits of the United Methodist Church, in this securities class action alleging that Reata Pharmaceuticals made false and/or misleading statements — including in connection with its secondary public stock offerings — concerning, inter alia, the FDA guidance regarding the design of the clinical trial (CARDINAL) for Reata’s drug candidate, bardoxolone methyl. When the FDA revealed serious concerns it had previously raised to Reata, the share price declined materially.  The case has resulted in a settlement of $45 million.

• Case Mason-Mahon v. Flint,
  No. 602052/2014 (N.Y. Sup. Ct., Nassau Cty.).
• Type Corporate Governance, Securities
• Status Settled

• 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.

• Case Kokareva v. Bristow Group Inc., 
  No. 19-cv-00509 (S.D. Tex.).
• Type Securities
• Status Settled
• We acted as co-lead counsel in this securities class action alleging that an aviation services provider, focused on the oil and gas sector, made materially false and misleading statements about its internal controls relating to covenants in the company’s secured financing agreements. The case resulted in a $6.25 million settlement that has received final approval.

• Case Esposito v. American Renal Associates Holdings, Inc.,
  No. 16-cv-11797 (D. Mass.).
• Type Securities
• Status Settled
• Esposito v. American Renal Assocs. Holdings, Inc., No. 16-cv-11797 (D. Mass. 2018).  Lead counsel.  $4 million settlement.

• Case In re Resonant Inc. Securities Litigation,
  No. 15-cv-01970 (C.D. Cal.).
• Type Securities
• Status Settled
• In re Resonant Inc. Securities Litigation, No. 15-cv-01970 (C.D. Cal. 2017).  Co-lead counsel.  $2.75 million settlement.

• Case In re Molycorp, Inc. Securities Litigation,
  No. 13-cv-05697 (S.D.N.Y.).
• Type Securities
• Status Settled
• In re Molycorp, Inc. Securities Litigation, No. 13-cv-05697 (S.D.N.Y. 2017).  Lead counsel.  $1.25 million settlement.

• Case In re AudioEye, Inc. Securities Litigation,
  No. 15-cv-00163 (D. Ariz.).
• Type Securities
• Status Settled
• In re AudioEye, Inc. Securities Litigation, No. 15-cv-00163 (D. Ariz. 2017).  Lead counsel.  $1.525 million settlement.

• Case Joel Packer v. Peabody Energy Corporation, 
  No. 17-4039-399 (Bankr. E.D. Mo.).
• Type Securities
• Status Settled
• Joel Packer v. Peabody Energy Corporation, Adversary Proceeding No. 17-4039-399 (Bankr. E.D. Mo. 2017).  Representation of noteholders.  This litigation resulted in a settlement just one month after filing the complaint.

• Case In re Bio-Rad Laboratories, Inc. Shareholder Litigation, 
  No. 11387-VCS (Del. Ch.). 
• Type Corporate Governance, Securities
• Status Settled
• 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.

• Case In re MOL Global, Inc. Securities Litigation,
  No. 14-cv-09357 (S.D.N.Y.).
• Type Securities
• Status Settled
• KM acted as counsel to lead plaintiff TAP Retirement Fund in a securities fraud class action involving MOL Global, Inc.’s accounting misrepresentations. In this case, we overcame numerous challenges to our client taking the lead in the case, including: allegations that TAP was not the actual owner of the shares but was merely an investment advisor that did not have standing to bring claims; under Brunei law, a suit cannot be filed on behalf of the fund without the express permission of the Sultan of Brunei; and that a Brunei-based plaintiff cannot be the lead plaintiff because Brunei law would not recognize a judgment from a U.S. court. We convinced the court to reject these challenges as nothing more than speculation, and — before a ruling on the motion to dismiss, and with very little time and effort required from TAP — the case settled for $8.5 million for the class.

• Case Globis Capital Partners, L.P. v. The Cash Store Financial Services Inc.,
  No. 13-cv-03385 (S.D.N.Y.). 
• Type Securities
• Status Settled
• Globis Capital Partners, L.P. v. The Cash Store Financial Services Inc., No. 13-cv-03385 (S.D.N.Y. 2015).  Co-lead counsel. CAD $13,779,167 cash settlement, representing roughly 50% of total class-wide stock losses.

• Case Dandong v. Pinnacle Performance Ltd.,
  No. 10-cv-08086 (S.D.N.Y.). 
• Type Securities, Structured Finance
• Status Settled
• KM acted as lead counsel for a group of Singapore-based investors in a securities class action against Morgan Stanley pertaining to notes issued by Cayman Islands-registered Pinnacle Performance Ltd.  Plaintiffs alleged that Morgan Stanley routed Pinnacle investors’ principal into synthetic collateralized debt obligations (“CDOs”) which were built to fail and then bet against.  As the CDOs failed by design, plaintiffs’ principal was swapped to Morgan Stanley, enriching Morgan Stanley while rendering the Pinnacle Notes an all-but-total loss.  This case resulted in a settlement of $20 million for the class following the court’s order certifying common law fraud claims.

• Case In re Hi-Crush Partners L.P. Securities Litigation,
  No. 12-cv-08557 (S.D.N.Y.).  
• Type Securities
• Status Settled
• In re Hi-Crush Partners L.P. Securities Litigation, No. 12-cv-08557 (S.D.N.Y. 2015).  Lead counsel.  $3.8 million settlement while class certification was pending.

• Case Rudman v. CHC Group Ltd.,
  No. 15-cv-03773 (S.D.N.Y.).
• Type Securities
• Status Settled
• Rudman v. CHC Group Ltd., No. 15-cv-03773 (S.D.N.Y. 2017).  Lead counsel.  $3.85 million settlement.

• Case Maine State Retirement System v. Countrywide Financial Corporation,
  No. 10-cv-00302 (C.D. Cal.).
• Type Securities, Structured Finance
• Status Settled
• Maine State Retirement System v. Countrywide Financial Corp., No. 10-cv-00302 (C.D. Cal. 2013).  Counsel for class representative.  $500 million settlement.

• Case Space Coast Credit Union v. Barclays Capital Inc.,
  No. 11-cv-02802 (S.D.N.Y.).
• Type Securities, Structured Finance
• Status Settled
• Space Coast Credit Union v. Barclays Capital Inc., No. 11-cv-02802 (S.D.N.Y. 2013).  Counsel for Plaintiff.  Parties dismissed the case following a consensual resolution.

• Case In re Citigroup Inc Securities Litigation, 
  No. 07-cv-09901 (S.D.N.Y.).  
• Type Securities, Structured Finance
• Status Settled
• Lead counsel for individual investor lead plaintiffs in this securities fraud class action relating to Citigroup’s exposure to losses associated with its creation or sponsorship of numerous collateralized debt obligations (“CDOs”).  This case resulted in a settlement of $590 million for the class.  The settlement was, at the time, the largest CDO-related settlement ever, as well as the largest settlement of a fraud-only action.  A later filed SEC complaint concerning similar allegations settled for a small fraction of the class action settlement amount.

• Case In re Adelphia Communications Corp. Securities & Derivative Litigation, 
  No. 03-md-01529 (S.D.N.Y.). 
• Type Securities
• Status Settled
• Co-lead counsel for a hedge fund lead plaintiff in a securities fraud class action in one of the largest cases of improper self-dealing by insiders in corporate history.  The case resulted in settlements totaling $478 million.

• Case In re National City Corp. Securities, Derivative & ERISA Litigation,
  No. 08-cv-70004 (N.D. Ohio). 
• Type Securities, Structured Finance
• Status Settled
• Lead counsel for lead plaintiff New York State Common Retirement Fund in a securities fraud class action against National City Corporation relating to the bank’s exposure to subprime assets.  This case resulted in a settlement of $168 million for the class.

• Case Barfuss v. DGSE Companies, Inc.,
  No. 12-cv-03664 (N.D. Tex.).
• Type Securities
• Status Settled
• Barfuss v. DGSE Companies, Inc., No. 12-cv-03664 (N.D. Tex. 2013).  Lead Counsel.  $1.7 million settlement.

• Case In re Wachovia Equity Securities Litigation,
  No. 08-cv-06171 (S.D.N.Y.).
• Type Securities, Structured Finance
• Status Settled
• Lead counsel for lead plaintiff New York City Pension Funds in a class action against Wachovia Corporation arising from the bank’s alleged misrepresentations of their exposure to the subprime market.  This case resulted in a settlement of $75 million for the class.

• Case Dutton v. Harris Stratex Networks Inc., 
  No. 08-cv-00755 (Del. Ch.).
• Type Securities
• Status Settled
• Dutton v. Harris Stratex Networks Inc., C.A. No. 08-cv-00755 (D. Del. 2011).  Lead counsel.  $8.9 million settlement.

• Case Serino v. Lipper,
  No. 02/604396 (N.Y. Sup. Ct., N.Y. Cty.).
• Type Securities
• Status Settled
• Serino v. Lipper, No. 02/604396 (Sup. Ct. N.Y. Co. 2010).  Class counsel.  $29.9 million settlement.

• Case In re Pfizer Inc. Shareholder Derivative Litigation,
  No. 09-cv-7822 (S.D.N.Y.).
• Type Corporate Governance, Securities
• Status Settled
• 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.

• Case Lapin v. Goldman Sachs & Co.,
  No. 04-cv-02236 (S.D.N.Y.).
• Type Securities
• Status Settled
• Lapin v. Goldman Sachs & Co., No. 04-cv-02236 (S.D.N.Y. 2010).  Co-lead counsel.  $29 million settlement.

• Case In re Herley Industries, Inc. Securities Litigation, 
  No. 06-cv-02596 (E.D. Pa.).
• Type Securities
• Status Settled
• In re Herley Industries, Inc. Securities Litigation, No. 06-cv-02596 (E.D. Pa. 2010).  Lead counsel.  $10 million settlement.

• Case In re Sirf Technology Holdings, Inc. Securities Litigation,
  No. 08-cv-00856 (N.D. Cal.).
• Type Securities
• Status Settled
• Lead counsel.  $2.9 million settlement.

• Case In re Levi Strauss & Co. Securities Litigation,
  No. 03-cv-05605 (N.D. Cal.).
• Type Securities
• Status Settled
• In re Levi Strauss & Co. Securities Litigation, No. 03-cv-05605 (N.D. Cal. 2008).  Co-lead counsel.  $5 million settlement.

• Case In re Pharmos Securities Litigation,
  No. 05-cv-00338 (D.N.J.).
• Type Securities
• Status Settled
• In re Pharmos Securities Litigation, No. 05-cv-00338 (D. N.J. 2007).  Lead counsel.  $7 million settlement.

• Case In re BISYS Securities Litigation,
  No. 04-cv-03840 (S.D.N.Y.).
• Type Securities
• Status Settled
• In re BISYS Securities Litigation, No. 04-cv-03840 (S.D.N.Y. 2007).  Co-lead counsel.  $66 million settlement.

• Case In re Owens Corning,
  No. 01-cv-10729 (D. Mass.).
• Type Securities
• Status Settled
• In re Owens Corning, No. 01-cv-10729 (D. Mass. 2007).  Lead counsel.  $19.25 million settlement.

• Case Gerber v. Computer Associates International, Inc.,
  No. 91-cv-03610 (E.D.N.Y.).
• Type Securities
• Status Settled
• Gerber v. Computer Associates International, Inc., No. 91-cv-03610 (E.D.N.Y. 2000).  Lead Counsel.  Multi-million dollar jury verdict in securities class action.

• Case John Hancock Life Insurance Company v. Goldman Sachs & Co.,
  No. 01-cv-10729 (D. Mass.).
• Type Securities
• Status Settled
• John Hancock Life Insurance Company v. Goldman Sachs & Co., No. 01-cv-10729 (D. Mass. 2007).  Co-Lead Counsel.  $19.25 million settlement.

• Case In re AT&T Wireless Tracking Stock Securities Litigation,
  No. 00-cv-08754 (S.D.N.Y.). 
• Type Securities
• Status Settled
• Lead counsel for a union pension fund lead plaintiff in this securities class action on behalf of investors who purchased AT&T Wireless tracking stock in an April 26, 2000 initial public offering and through May 1, 2000 on the open market.  The action asserted that the prospectus and registration statement used for the IPO misled investors about AT&T’s prospects and recent results.  The case settled for $150 million on the eve of trial.

• Case In re Textron, Inc. Securities Litigation,
  No. 02-cv-00190 (D.R.I.).
• Type Securities
• Status Settled
• In re Textron, Inc. Securities Litigation, No. 02-cv-00190 (D.R.I. 2006).  Co-lead counsel.  $7 million settlement.

• Case Daniel v. Aon Corp.,
  No. 99 CH 11893 (Ill. Cir. Ct., Cook Cty.).
• Type Securities
• Status Settled
• Daniel v. Aon Corp., No. 99 CH 11893 (Circuit Court of Cook County, Illinois 2005).  Lead counsel.  $38 million settlement.

• Case Carnegie v. Household International Inc.,
  No. 98-cv-02178 (N.D. Ill.).
• Type Securities
• Status Settled
• Carnegie v. Household International Inc., No. 98-cv-02178 (N.D. Ill. 2006).  Co-lead counsel.  $39 million settlement.

• Case Argent Convertible Classic Arbitrage Fund, L.P. v. Amazon.com, Inc.,
  No. 01-cv-00640 (W.D. Wash.).  
• Type Securities
• Status Settled
• Lead counsel.  $20 million settlement for class of convertible euro-denominated bond purchasers.

• Case In re Isolagen Inc. Securities & Derivative Litigation, No. 05-cv-04983 (E.D. Pa.).
• Type Corporate Governance, Securities
• Status Settled
• In re Isolagen Inc. Securities & Derivative Litigation, No. 05-cv-04983 (E.D. Pa 2009).  Lead counsel.  $4.4 million settlement.

• Case Muzinich & Co., Inc. v. Raytheon Company,
  No. 01-cv-00284 (D. Idaho).
• Type Securities
• Status Settled
• Muzinich & Co., Inc. v. Raytheon Company, No. 01-cv-00284 (D. Idaho 2005).  Co-lead counsel.  $39 million settlement.

• Case Hollinger International Inc. v. Black,
  No. 183-N (Del. Ch.). 
• Type Corporate Governance, Securities
• Status Settled
• 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.

• Case In re Nuance Communications, Inc. Securities Litigation,
  No. 01-cv-20320 (N.D. Cal.).
• Type Securities
• Status Settled
• In re Nuance Communications, Inc. Securities Litigation, No. 01-cv-20320 (N.D. Cal. 2003).  Co-lead counsel.  $11 million settlement.

• Case In re Churchill Securities, Inc. (SIPA Proceeding),
  No. 99 B 5346A (Bankr. S.D.N.Y.).
• Type Securities
• Status Settled
• In re Churchill Securities, Inc. (SIPA Proceeding), No. 99 B 5346A (Bankr. S.D.N.Y. 2003).  Lead counsel.  Over $9 million recovery for 500+ victims of pyramid scheme perpetrated by defunct brokerage firm.

• Case Cromer Finance v. Berger (In re Manhattan Fund Securities Litigation),
  No. 00-cv-02284 (S.D.N.Y.).
• Type Securities
• Status Settled

• Case In re Laidlaw Bondholder Securities Litigation,
  No. 00-cv-2518 (D.S.C.).
• Type Securities
• Status Settled

• Case In re Bergen Brunswig/Bergen Capital Trust Securities Litigation,
  Nos. 99-cv-01305 and 99-cv-01462 (C.D. Cal.).
• Type Securities
• Status Settled