Securities litigation is one of the Firm’s largest practice areas. While most corporate law firms traditionally represent only defendants and not plaintiffs, we frequently represent both, and have done so in many of the highest-profile securities cases in the United States. In the aftermath of the U.S. financial crisis, we achieved verdicts and settlements totaling over $47 billion against many of the major banks responsible for the collapse of mortgage-backed securities. And our global presence allows us to represent clients in complex securities disputes in major financial markets in Europe, Asia, and Australia.
We have litigated every type of securities case, including the following:
- Claims under the Securities Act of 1933 and the Securities Exchange Act of 1934
- Fraud and non-disclosure cases under state blue-sky laws
- Market manipulation cases
- Takeovers and proxy disputes
- All holders/best-price rule tender offer litigation
- Insider trading
- Option disputes
In securities cases, we have represented:
- Fortune 500 companies
- Investment banks
- Directors and officers
- Special committees
- Audit committees
- Institutional investors
- Hedge funds and private equity firms
- Financial advisors
Quinn Emanuel has also, once again, been ranked first among the firms that major companies want to face least as opposing counsel (BTI Consulting Group, 2022). Our reputation is an advantage in the courtroom and in settlement discussions, because a credible trial threat can hasten a favorable outcome.
We also specialize in designing and conducting internal investigations and in negotiating with prosecutors and regulators, including the DOJ, SEC, CFTC, FTC, and CFPB. More than two dozen of the firm’s partners are former prosecutors, which includes former high-ranking Department of Justice lawyers and numerous alumni of United States Attorney’s Offices.
- We represent DiDi Global Inc.—described as the “Uber of China”—and certain officers and directors in a putative securities class action in the S.D.N.Y. Plaintiffs allege that DiDi proceeded with an IPO of American Depositary Shares (“ADS”) in July 2021 despite an undisclosed “directive” from China’s Cybersecurity Administration instructing DiDi not to do so (which Plaintiffs’ allegations do not support). Plaintiffs assert claims under both Section 10 of the 1934 Act and Section 11 of the 1933 Act arising from the same allegations. We have moved to dismiss on grounds of failure to plead falsity or scienter, among other reasons.
- We asserted claims against WeWork in New York State Supreme Court, Commercial Division, on behalf of funds affiliated with Catalyst Investors. The complaint alleged that WeWork, along with Adam Neumann, WeWork’s founder and CEO, and Arthur Minson, WeWork’s CFO, induced plaintiffs to sell their interests in a valuable technology company, called Conductor, in exchange for WeWork shares by misrepresenting WeWork’s value and profitability. The fraud was revealed shortly thereafter in spectacular fashion when WeWork had to abandon its plans for an IPO. The Court denied Defendants’ motion to dismiss the main fraud claim, and we settled the matter on favorable terms.
- We represented pharmaceutical giant Allergan and several directors and officers in a 10(b) class action alleging failure to disclose that one of Allergan’s former divisions was purportedly engaged in a price-fixing conspiracy, and an opt-out action brought by TIAA-CREF Large Cap Growth Fund arising from similar allegations. We settled both claims on favorable terms.
- We represent certain investment vehicles against William “Beau” Wrigley—heir to the Wrigley fortune—his cannabis company Parallel, two of its current/former directors and officers, and certain other Wrigley-affiliated investment vehicles. We allege that Defendants induced our clients, through material misrepresentations and omissions—to invest $25 million in a Simple Agreement for Future Equity (“SAFE”). Two days after our clients funded the last of the investment, Parallel experienced a cascade of debt defaults. Defendants’ motion to dismiss is set for argument in December 2022 in the Southern District of Florida.
- In a truly historic partnership between a regulator and a private firm, we represented the Federal Housing Finance Agency (“FHFA”), as Conservator for Fannie Mae and Freddie Mac, in connection with its investigation and litigation of nearly $200 billion in residential mortgage-backed securities. As widely reported, this was one of the most significant court actions taken by any federal regulator since the advent of the mortgage crisis, and the single largest set of actions ever filed by a governmental entity. We recovered over $23 billion, including (i) a $5.5 billion settlement against RBS—one of the largest recoveries ever in a securities action—and (ii) an $800 million judgment against Nomura and RBS after a four-week trial.
- We represent and have represented C3.ai, a leading Silicon Valley enterprise AI software provider, and CEO Thomas Siebel in several actions, including a federal bench trial in the District of Delaware in which former shareholders of an acquired entity asserted claims under Section 10 and Delaware common law fraud, among others. We excluded the plaintiffs’ damages expert, then obtained a complete defense verdict including attorneys’ fees and costs. (We also obtained unanimous affirmance in the Third Circuit.) The Company recently retained us to represent it in another securities class action arising from the publication of a highly inaccurate short-seller report, and in a related derivative action and Section 220 demand, which are in early stages.
- We represent Dfinity USA Research LLC and an affiliate in parallel class actions in the Northern District of California and San Mateo, California Superior Court asserting that Defendants sold their ICP tokens without registering them, in violation of the 1933 Securities Act prohibition on sale of unregistered securities, and made misstatements in breach of Section 10(b) of the 1934 Securities Exchange Act and Rule 10b-5. We moved to dismiss both actions on a variety of grounds, including that Defendants began offering the tokens more than three years ago, outside the Securities Act’s statute of repose and that Plaintiff failed to plead Defendants were statutory sellers under Section 12(a)(1). The state court action is now in discovery; briefing in the federal action is stayed until resolution of a motion to disqualify plaintiff’s counsel.
- We represented the Official Committee of Unsecured Creditors of Lehman Brothers Holdings Inc. (“LBHI”) as lead counsel litigating LBHI’s objections to claims by Citibank, N.A. and affiliates (“Citibank”) and Credit Suisse AG and affiliates (“Credit Suisse”) related to the close-out and valuation of tens of thousands of derivatives following Lehman’s bankruptcy. As to Citibank’s claims, after 42 days of trial over the course of four months, LBHI announced a settlement that returned $1.74 billion to Lehman’s creditors. As to the Credit Suisse objections, LBHI announced a settlement with CS that reduced CS’s claim by approximately $800 million.
- We represent Fei Labs and certain executives in a putative class action filed in the County Superior Court for San Francisco, California. Plaintiff alleges that Defendant Fei Labs’ stablecoin—a cryptocurrency pegged to the U.S. dollar—was unregistered and therefore breached the 1933 Securities Act. The action is now in discovery.
- We represent StoneCo, a fintech company, and certain directors/officers in a putative class action in the S.D.N.Y. StoneCo provides point-of-sale devices to retailers, and in 2019 began offering credit to its customers that the Company would recoup by taking a percentage of the transactions on those devices. Plaintiffs allege the Company mischaracterized its credit underwriting standards as, for instance, “conservative,” when the Company was allegedly loosening standards and knew its default rate was increasing. We will move to dismiss Plaintiffs’ claims on various grounds, including failure to plead falsity or scienter. Briefing is expected to be complete in early 2023.
- We obtained complete dismissal with prejudice of a Section 11 class action on behalf of BlueCity Holdings in a putative class action in New York State Supreme Court’s Commercial Division. BlueCity is an online and app-based provider of information and services to the LGBTQ community in China and other parts of Asia and boasts approximately 60 million registered users. The Court dismissed from the bench, and a week later, in a written decision, made clear the dismissal was with prejudice. This win earned recognition from AmLaw in its Litigator of the Week feature. We also represent BlueCity in a parallel federal class action in the E.D.N.Y. arising from similar allegations. Motion to dismiss briefing is expected to be complete in December 2022.
- We represent funds affiliated with Hound Capital in an opt-out action against Valeant Pharmaceuticals, certain directors and officers, and various underwriter banks, alleging Defendants were responsible for misstatements and omissions relating to a massive scheme in which Valeant used captive pharmacies to charge exorbitant prices for drugs produced by companies that Valeant owned. The Court denied Defendants’ motions to dismiss the causes of action asserted under Sections 11 and 15 of the 1933 Securities Act, and Section 18 of the 1934 Securities Exchange Act, dismissing only the state-law claims as barred by SLUSA. Discovery is complete and the underwriters’ partial motions for summary judgment are pending.
- We obtained complete dismissal on behalf of UP Fintech (and its directors and officers), a leading online brokerage firm for Chinese investors, in parallel state and federal securities class actions alleging Section 11 claims. Each Section 11 action asserted that UP Fintech failed to disclose rising expenses in its offering materials, even though its IPO launched more than a month after the close of the prior quarter. We timed the cases so the federal decision would come down first, and used that precedent to obtain dismissal at the state level.
- We represented Garrett Motion Inc. and certain officers and directors in a putative class action in the S.D.N.Y. Garrett is an automotive and technology company based in Switzerland that spun off from Honeywell International in 2018, and filed for bankruptcy in 2020. We obtained dismissal of the second amended complaint, and in May 2022 Plaintiffs filed a revised complaint that significantly shortened the class period and reduced the number of alleged misstatements by approximately two-thirds. Our motion to dismiss the truncated complaint is fully briefed.
- We represented bio-tech company NantCell, Inc. in Delaware Chancery Court against shareholders of Altor, a company NantCell intended to acquire. Plaintiffs sought to enjoin the merger on the grounds that Altor’s directors breached their fiduciary duties in approving the transaction with NantCell and that the merger consideration was inadequate. We defeated the motion for a TRO to halt the transaction, which enabled it to close, and then settled appraisal claims and a related class action on favorable terms.
- We represent the former CEO of Collage.com in Delaware Chancery Court in an action under the Washington State Securities Act against ShootProof and PSG Equity. Collage.com was an e-commerce business that customized items with photographs. The CEO agreed to merge with ShootProof, an online photography business, and accepted a portion of the consideration in ShootProof equity, rather than cash, in reliance on promises that he would have a high-level, executive management role in the new company, and that Collage’s employees would be retained. But immediately after the merger, Defendants fired the GC (who they had promised to retain) and marginalized and/or fired legacy Collage employees, including the CEO. A hearing on Defendants’ motion to dismiss is scheduled for November 2022.
- We are representing Corcept Therapeutics and its CEO and CFO in a putative class action in the Northern District of California alleging the Company, which manufactured and marketed pharmaceuticals, engaged in an “off-label” scheme for a particular drug, and as a result made misstatements relating to the marketing, use, and other aspects of the drug. We obtained partial dismissal at the pleading stage.
- We served as lead counsel for the ResCap Liquidating Trust, which was formed pursuant to the chapter 11 plan confirmed by Residential Funding Company (“RFC”) to pursue claims for the benefit of RFC’s creditors. We brought actions against approximately 90 mortgage originator Defendants that sold defective mortgage loans to RFC—which loans were securitized by RFC and resulted in lawsuits that forced RFC into bankruptcy. We ultimately recovered almost $1.3 billion from Defendants, including a $68 million jury verdict against Home Loan Center.
- We represent Rio Tinto and its CEO in a putative securities class action in the S.D.N.Y. asserting claims under Rule 10b-5. Plaintiffs claim Defendants were responsible for misstatements and omissions relating to the operation of a large copper mine in Mongolia. We obtained partial dismissal as to Rio Tinto and the individuals, and complete dismissal as to a subsidiary, at the pleading stage.
- We represent Bakkt Holdings, Inc. which provides products and services that enable companies to, among other things, provide crypto-based compensation and rewards to employees. Bakkt went public on October 15, 2021 by means of a merger between a predecessor entity and VPC Impact Acquisition Holdings, a SPAC. According to the complaint, the SPAC, and later Bakkt, restated their financials after reclassifying certain equity as liabilities; Plaintiffs assert 1933 and 1934 Act claims.
- We represent Maiden Holdings, Ltd. in a putative class action in the District of New Jersey alleging that Maiden failed adequately to estimate loss reserves for its reinsurance business, resulting in misstated financials and large reserve charges. We obtained near-complete dismissal at the pleading stage. The Court allowed very limited discovery, and we persuaded the Magistrate Judge that Maiden’s subsequent document production was sufficient, effectively bringing discovery to a highly favorable close. We also preserved the decision in the District Court.
- We represent Elon Musk in a putative class action asserting that he intentionally failed to make certain timely filings pursuant to Section 13D of the Exchange Act in connection with his acquisition of shares in Twitter. Newly-appointed Lead Plaintiffs are expected to file a complaint in November 2022.
- We represent Tilray (successor to Aphria, Inc.), a leading cannabis company, in a securities class action. In December 2018, two notorious short-sellers claimed cannabis assets Aphria had recently purchased in Latin America and Jamaica were worthless or did not exist. We obtained dismissal for two Defendants at the pleading stage, then assumed representation of Aphria and the remaining individual defendants from prior counsel. To set the record straight, we served a “speaking answer” refuting the short report and subpoenaed the short-sellers’ documents. We are in discovery.
- We represented Mammoth Energy Services, Inc. and its CEO and CFO in derivative and class action suits arising from allegations that the president of a subsidiary provided things of value to a FEMA official so FEMA would steer restoration work to Cobra in Puerto Rico after Hurricane Maria. We obtained dismissal of a substantial portion of the securities class action, and then settled both the class action and derivative action on very favorable terms. We continue to represent Mammoth in related actions brought by competitors.
- We represent HPS Investment Partners LLC in various claims relating to its investment, through certain managed funds, in connection with a SPAC transaction involving entities operating in the STACK area of the Anadarko basin. HPS is one of various defendants in a securities class action that is now in discovery; and we obtained dismissal on behalf of a former HPS employee in his capacity as a board member of the public company that resulted from the SPAC transaction.
- We obtained dismissal or voluntary dismissal in parallel actions for BProtocol, Civic, and Quantstamp, Inc., and executives thereof, in three of numerous class actions asserted in parallel against crypto-currency issuers and/or exchanges. Plaintiffs asserted, inter alia, that each Company unlawfully failed to register (under the 1933 Act), and made misleading statements about, their tokens. We moved to dismiss on numerous grounds, including that Plaintiff’s registration claim was untimely, that Plaintiffs failed adequately to allege domestic purchases, forum non conveniens, lack of personal jurisdiction, and that Plaintiffs lacked standing to assert federal or Blue Sky claims. In the BProtocol case, our motion to dismiss was granted on the papers, on five independent grounds. Thereafter, Plaintiffs voluntarily dismissed the actions against Civic and Quantstamp after briefing was complete.
- We represent Waterdrop Inc., an online provider of insurance services, in a Section 11 class action asserting that IPO offering materials misrepresented the reasons for, and impact of, discontinuing a non-core business (though Waterdrop disclosed the discontinuance); concealed a substantial increase in expenses; and failed to disclose increasing regulatory pressure (though Plaintiff pleads the regulatory actions on which the claim is based were public). We moved to dismiss on the grounds that Plaintiff failed to plead material falsity. The action has been fully briefed since July 2022.
- We represent TAL Education Group in a putative class action in the Southern District of New York asserting claims under Rule 10b-5. TAL operated a large tutoring business in China during the class period. Plaintiff alleges TAL misrepresented its regulatory compliance, and that certain executives were aware, but did not disclose, that the Chinese government planned to impose even stricter regulations that would have a substantial and material impact on TAL’s business. Plaintiff recently filed an amended complaint, and briefing is likely to conclude in the first quarter of 2023.
- We were counsel to Construtora Norberto Odebrecht S.A. (“CNO”), and Odebrecht Engenharia & Construcao S.A., the holding and operating companies for Odebrecht’s multi-billion-dollar construction business, as well as Odebrecht Finance Ltd. (“OFL”), which issued hundreds of millions of dollars in notes between 2012 and 2015, in securities fraud suits brought by DoubleLine Capital LP and related funds, and by the Washington State Investment Board (“WSIB”). Plaintiffs alleged cumulative note purchases of approximately $200 million, and alleged false representations in CNO’s public statements and financial disclosures due to Odebrecht’s participation in the infamous bribery and bid-rigging schemes known generally as Lava Jato. We obtained dismissal of portions of DoubleLine’s complaint.
- We represented E*TRADE Financial Corporation and E*TRADE Securities LLC, along with the former and current CEOs of E*TRADE Financial, in obtaining the dismissal of a putative Section 10(b) class action, and secured that dismissal in the Second Circuit. The action challenged E*TRADE’s order routing practices, alleging E*TRADE earned tens of millions in “Payment for Order Flow” by prioritizing its receipt of rebates over the quality of execution provided to its customers.
- We represented several Charles Schwab-related entities and individuals in a shareholder derivative suit and securities class action related to the Schwab YieldPlus Fund. Pursuant to the recommendation of a special litigation committee, we moved for, and obtained, dismissal of the derivative and class action claims on summary judgment. The judgment was affirmed on appeal.
- We represented several parties, including KKR Credit Advisors and Canyon Capital Advisors, in connection with suits involving state and federal strict liability securities claims against Goldman Sachs, JPMorgan, and other participants in equity offerings for SunEdison, Inc. and TerraForm Global, Inc. The claims related to the IPO and alleged misstatements and omissions in the offering materials.
- We represented LendingClub Corporation and certain LendingClub directors in consolidated class actions in state and federal court in California alleging violations of the 1933 and 1934 Acts, arising from allegedly misleading statements and omissions in offering documents filed in connection with LendingClub’s 2014 IPO. We persuaded the federal court to limit the class period for the Section 11 claims based on an inability to trace shares, and ultimately settled both actions.
- We represented PIMCO, Western Asset Management Co., and dozens of other plaintiffs that hired us to pursue federal securities claims arising from the multi-year kick-back and bribery at the Brazilian state-owned oil company Petróleo Brasileiro S.A. (“Petrobras”). After less than a year of litigation, we obtained very favorable confidential settlements for each of our clients as part of $353 million paid and reserved by the company.
- We represented two funds managed by Elliott Management in a purported $300 million-plus shareholder class action in New Jersey state court arising from the 2006 take-private merger of Metrologic Instruments. We struck plaintiffs’ jury demand, then filed a renewed motion for summary judgment, along with a motion to reopen expert discovery. We settled while preparing to take the case to trial.
- We represented Marvell Technology Group in consolidated class actions and a derivative action that alleged $1 billion in market losses after the company announced an audit committee investigation and settlement of significant patent litigation. We were able to obtain dismissal of two of plaintiff’s three theories on motions to dismiss, and to narrow the class significantly at the certification stage, resulting in a successful settlement.
- We represented the former President and Chief Operating Officer of Brocade Communications Systems, Inc. in a federal securities class action, shareholder derivative suits, and an action by the SEC; the court in the derivative action granted our motion to dismiss, and we obtained dismissal of our client from the federal class action. The SEC action was resolved via consent judgment under which our client admitted to no wrongdoing.
- We have served as counsel in various stock option matters, including internal investigations, SEC, DOJ, and shareholder derivative actions, for Maxim Integrated Products, Barnes & Noble, and Terayon; for the Special Committee in Apple; and for individual officers of Brocade, Marvell, MRV Communications, and Computer Sciences Corp.
- We have litigated multiple cases for trustees or securities administrators on behalf of various RMBS Trusts. Two of the cases were brought on behalf of four Home Equity Mortgage Trust (“HEMT”) trusts, adverse to Credit Suisse. Another case is currently pending on behalf of a Natixis trust, adverse to Natixis. These cases, colloquially known as “put-back” actions, collectively involved claims that exceed $2 billion.