Securities

Securities

Trial-Ready and Aggressive

Kasowitz’s Securities Litigation practice is trial-ready and aggressive, and known for successfully handling bet-the-company litigations for both plaintiffs and defendants.  We regularly defend corporations, financial institutions, and directors and officers in securities actions and, for plaintiffs, frequently represent corporations, financial institutions, institutional investors and high net worth individuals in pursuing securities law violations by issuers and other market participants, including in direct actions and opt-out litigation.

Clients have included Teva Pharmaceuticals, TPG, Comcast, Federal National Mortgage Association (Fannie Mae), FHFA, HSBC Bank, ACA Financial Guaranty, Royal Bank of Canada, Loreley Financing, Godiva Chocolatier and U.S. Bank.

Our securities litigation practice is highly ranked by publications such as Chambers USA and The Legal 500.

Defense-Side

Teva Pharmaceuticals and its individual directors and officers in defense of one of the largest securities class actions currently pending as well as the more than 20 related direct actions, filed on behalf of more than 75 opt-out plaintiffs.

Eros International, a leading Bollywood film producer, in the dismissal, with prejudice, of all securities fraud claims asserted on behalf of a putative class of shareholders.  Following a coordinated attack by short sellers, Eros International’s share price had declined over 75%, prompting a wave of putative securities class actions.

TPG, one of the world’s largest private equity funds, in a series of cases relating to a €1.5 billion recapitalization of a Greek telecom company, alleging that the recapitalization was, among other things, a fraudulent conveyance under NY, UK and Luxembourg law with alleged damages in excess of $1 billion.

Comcast in a class action involving three sub-classes – each consisting of approximately two million cable subscribers – alleging that Comcast violated antitrust laws through “clustering’’ in Philadelphia, Chicago and Boston.  The U.S. Supreme Court ruled in favor of Comcast in a 5-4 decision that, based on our cross-examination of plaintiffs’ damages expert, overturned class certification and set standards for class certification.

Royal Bank of Canada in putative class actions alleging that RBC participated in Enron’s fraud and assisted Enron in misusing various financial structures so as to overstate Enron’s earnings.  We obtained the dismissal of all claims against RBC.

MF Global Holdings, a former global financial derivatives broker, in investigations by the U.S. Attorney's office, the Securities and Exchange Commission, the U.S. Commodities Future Trading Commission and the Plan Administrator for MF Global Holdings in various actions arising out of MF Global Holding’s bankruptcy, including in a $3 billion lawsuit against its outside auditor, PwC, which settled during trial.

The Special Committee of the Board of Directors of video-game maker Take-Two Interactive Software in an internal investigation into potential stock option backdating as well as a shareholder derivative action alleging insider-trading and other misconduct.

Fannie Mae in a Trust Instruction Proceeding brought by U.S. Bank in connection with the $5.4 billion sale of the Stuyvesant Town apartment complex, financed through commercial mortgage backed securities in which Fannie Mae invested.  After the property was foreclosed upon, the CMBS’s special servicer, CWCapital, sold the property and took over $500 million in “default interest.” U.S. Bank commenced a Trust Instruction Proceeding to receive the interest.

Tapestry (formerly Coach) in multiple class actions alleging violations of consumer protection laws arising from sales at Coach’s outlet stores.

Godiva Chocolatier in putative nationwide and state wide class actions alleging false advertising and violation of consumer protection laws relating to labeling.

Disability Rights Advocates, as pro bono counsel, in securing a landmark class action settlement that will improve access to health care for disabled persons at several of the largest hospitals and outpatient facilities in New York City.

Liggett Group, a large tobacco company, in numerous consumer fraud and antitrust class action cases around the country.  In many cases, class certification was defeated at the trial court or appellate court level.  Certain cases were also tried in multiple-phased proceedings to verdict.

Wyndham Hotels in a successful defense against a motion for certification of a nationwide class of consumers who claimed to have paid undisclosed resort fees and other fees charged by the hotel.

Stryker, a manufacturer of knee and hip replacement products, in a putative class action alleging that it engaged in an illegal kickback scheme with doctors and surgeons.  We successfully obtained dismissal of the complaint.

Stonepath Group in defense of a securities fraud action filed by purchasers of Stonepath’s preferred stock. The action resulted in the seminal decision by the Second Circuit Court of Appeals concerning the standard of reasonable reliance in 10(b)(5) cases.

A director of MagnaChip, a Korean semi-conductor manufacturer, in a securities class action lawsuit arising from the company's restatement of its audited financial statements.

People’s United Bank in a putative class action alleging that defendants engaged in a $400 million Ponzi scheme arising from an EB-5 visa program. The case was dismissed against our client.  Other defendants, including Citibank, paid millions of dollars to settle their claims.

Hoechst and other chemical companies in dozens of putative nationwide and state class actions at the trial and appellate levels involving allegedly defective plastic plumbing.  Denial of class certification was affirmed by the Fifth Circuit, as well as state appellate courts.  We also negotiated a nationwide class action settlement

Southern Union in individual and class action claims for personal injury and property damage arising from an alleged spill of mercury.

CNA Holdings in a putative class action of National Semiconductor employees seeking to recover for alleged personal injuries arising from exposure to chemicals.  Class certification was denied.  The case settled for nominal amounts.

Celanese in putative class actions and dozens of individual actions arising out of alleged releases of ethyl acrylate from rail cars in New Orleans.  We defeated class certification and obtained dismissal of all of the putative class claims.

Plaintiff-Side

A group of noteholders in the multi-billion dollar National Collegiate Student Loan Trusts, including Angelo Gordon & Co., Waterfall Asset Management, One William Street Capital Management, and Libremax Capital, in litigations nationwide concerning the management and control of the Trusts, and as interested parties in CFPB enforcement proceedings against the Trusts

MBIA in a decade-long put-back action against Credit Suisse in which MBIA sought to recover for breaches of representations and warranties related to RMBS insured by MBIA.  After a two-week bench trial in New York State Supreme Court, the court found that MBIA had convincingly proved that Credit Suisse breached its representations and warranties, and that Credit Suisse was liable for over $600 million in damages.

Several mutual funds, a public pension plan, and other institutional investors in pursuing direct securities fraud claims arising from Valeant’s improper accounting and billions of dollars of fraud-related losses

A hedge fund that owned one of the largest equity positions of Adeptus prior to its multi-billion dollar bankruptcy in successfully pursuing direct claims against Adeptus’ former officers, directors, and private equity sponsor.  The terms of the settlement are confidential

Numerous prominent hedge funds in securing a favorable settlement arising from a claim for fraud against SunEdison’s officers and directors following the dramatic multi-billion dollar bankruptcy of SunEdison.

Federal Housing Finance Agency, as conservator for Fannie Mae and Freddie Mac, in actions in federal and state courts against numerous financial institutions, including most of the country’s largest banks and investment banks.  The lawsuits sought rescission or damages arising out of the banks’ misrepresentations concerning pools of mortgage loans that underlie residential mortgage-backed securities (RMBS) the banks issued, securitized and sold to Fannie Mae and Freddie Mac.  After prevailing on critical pre-trial issues, FHFA settled the actions brought by Kasowitz for over $2 billion, including a $1.25 billion settlement with Morgan Stanley.

U.S. Bank and HSBC Bank USA, as trustees of numerous residential mortgage-backed securities (RMBS) trusts that lost billions of dollars after the financial crisis.  Building off of our representation of the Federal Housing Finance Administration, Kasowitz has been the market leader in RMBS putback litigation ever since the pervasive nature of the low-quality mortgage loans underlying private-label RMBS first became exposed. With actions against Deutsche Bank, Nomura, Morgan Stanley and others, Kasowitz has both litigated the main cases – including the NY Court of Appeals’ ACE 2006-SL2 decision and the First Department’s NHELI decision now pending before the Court of Appeals – and represented trustee plaintiffs in the largest number of cases in the consolidated Part 60 proceedings.

Loreley Financing, a collateralized debt obligation investor, in actions against banks asserting claims worth $13 billion, including a $965 million claim alleging that Citigroup fraudulently induced Loreley to invest in CDOs improperly filled with assets selected by short investors.

ACA Financial Guaranty, a bond insurer, in its $120 million fraud suit against Goldman Sachs and hedge fund Paulson & Co. for fraudulently inducing ACA to issue a financial guaranty for Goldman’s ABACUS CDO by deceiving ACA about Paulson’s role and financial interest in the transaction.  Kasowitz successfully argued the case before the New York Court of Appeals, creating precedent on the standards for reliance in fraud actions under New York law.

Metropolitan Life Insurance Company and Lloyds TSB Bank in actions against investment banks, indenture trustees, rating agencies and accountants, asserting violations of federal securities and New Jersey Blue Sky laws relating to losses on holdings of more than $250 million of financial instruments issued by National Century Financial Enterprises.  The FBI has described this action as one of the largest corporate fraud cases ever brought involving a privately held company.

Basic Element Company, a leading Russian industrial conglomerate, in pursuing securities fraud claims for insider trading and market manipulation against a major United States investment bank stemming from the liquidation of a more than $1 billion dollar stake in a Canadian auto parts manufacturer.

DWS Parties, stakeholders in a commercial mortgage-backed securities trust administered by Wells Fargo, in a $770 million matter opposing the efforts of Bedford CMBS Acquisitions to obtain defaulted commercial mortgage-backed securities worth more than $200 million in a Wells Fargo Bank NA trust.

The Hartford Life Insurance Company in a securities fraud action against Bank of America in the federal multi-district securities litigation relating to the collapse of Parmalat Finanziaria.  This case was settled favorably as it neared trial.

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