Securities Litigation

Mintz Levin has compiled an extraordinary record of success representing corporate, institutional, and individual clients in a wide variety of high-stakes, complex securities litigation matters. We have extensive experience litigating securities cases in federal and state courts throughout the United States, as well as counseling clients in securities enforcement and internal compliance matters. In addition, we are frequently retained to conduct internal investigations relating to allegations of financial misconduct. 

Class Action and Derivative Litigation

Mintz Levin represents public and private companies and officers and directors, defending and prosecuting claims under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940. We also have extensive experience defending shareholder derivative actions, as well as claims regarding financial services, derivative financial products, state securities law, common law claims, bond defaults, trust indentures, municipal finance, and real estate investment trusts.

We represent issuers, corporate officers and directors, and other parties, including auditors and underwriters. Representative cases have addressed insider trading and short-swing profits, stock option “backdating,” market timing, and corporate control disputes, including tender offers and proxy/consent solicitations. We have also represented mutual funds, investment advisers, and disinterested directors in matters alleging excessive management fees, breaches of fiduciary duty and other violations of the Investment Company Act of 1940. Mintz Levin’s Securities Litigation group coordinates with the firm’s corporate securities practice to marshal our broad spectrum of experience, thereby enhancing our defense capabilities.

Notable representations include:

• Obtaining a rare defense verdict for a top-tier biotech client in a multi-million-dollar Section 10(b) securities fraud class action suit. After an eight-day trial, the jury returned a verdict in less than three hours, completely absolving both the company and its chairman of any wrongdoing.
  
• Obtaining a defense jury verdict representing the officers of a high-tech corporate client in a Section 10(b) case arising from a complex PIPE transaction. After four years of litigation, we brokered a nuisance value settlement for a public company client after empanelling a jury in a Section 10(b) securities class action.
  
• Successfully representing a high-tech client in a derivative action alleging violations of Section 14(a) of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, and common law claims arising out of alleged stock options “backdating;” we disposed of the case on a motion to dismiss.
  
• After a hearing, a Financial Industry Regulatory Authority (FINRA) arbitration panel reviewing churning and suitability charges against a broker-dealer and its employees exonerated a branch manager represented by Mintz Levin, even though the panel held the broker-dealer and an individual broker (both represented by other counsel) liable for substantial damages.

Regulatory and Enforcement

Mintz Levin litigators have a proven record of success in representing public companies, financial services firms, audit firms and senior management, as well as individual investors, in connection with investigations and enforcement proceedings commenced by the SEC and other government agencies, including FINRA.

We are also retained by public company boards, audit committees, and special committees to conduct internal investigations in response to allegations of accounting irregularities and other misconduct. Mintz Levin’s securities litigators often work together with the firm’s renowned White Collar Defense group  to handle concurrent criminal, civil enforcement, and legislative investigations, together with shareholder and derivative litigation. Our litigators also advise on the establishment and implementation of securities law compliance programs.

The firm’s recent experience in regulatory investigations and proceedings includes:

Financial Fraud. Representation of:

• Issuers, officers, directors and employees in investigations relating to alleged financial fraud with respect to SEC filings, improper accounting, shareholder communications, and press releases
• Issuers and individual executives in stock option “backdating” investigations

These representations frequently involve close coordination with the defense of class actions relating to the same subject matter.

Insider Trading. Representation of:

• Issuers in investigations relating to alleged “leaks” to investors of “negative information”
• Institutional investors who allegedly traded on information gleaned from corporate officers and directors or securities analysts prior to the “public dissemination”
• Various individuals (officers, directors, venture capitalists) with respect to challenged trades

Manipulation and Registration. Representation of:

• Issuers and individuals in investigations relating to trading in unregistered securities
• Issuers in investigations relating to Regulation S
• Issuers victimized by short-sellers

Regulated Entities. Representation of:

• Investment companies in investigations relating to valuation and pricing of portfolios
• Transfer agents and custodians in investigations relating to various compliance and regulatory issues
• Investment companies and advisers with respect to adequacy of compliance procedures
• Broker-dealers and branch managers in “failure to supervise” investigations

Investor Representation

Mintz Levin regularly represents thousands of institutional investors, as well as individual clients, in evaluating and participating in securities class actions involving companies in which these clients hold significant positions. We advise these institutions with respect to opting out of or objecting to proposed settlements. We also assist clients with respect to their participation in SEC and other regulatory settlements for investors, as well as certain foreign settlements. To date, our clients have received nearly $3 billion from these settlements. Mintz Levin has familiarity with virtually every public investor settlement that occurs.

Notably, Mintz Levin recently negotiated an extremely favorable settlement on behalf of an institutional investor client (and several of its subsidiaries) with its investment advisor (part of a major international financial services company) in a dispute arising out of the defendant’s alleged mismanagement of a portion of our client’s cash investment portfolio—namely, a portion invested in certain now-illiquid CDO-backed auction rate securities. As part of this confidential settlement, our client received a cash payment of $100 million and kept the securities in question, which are still paying interest.

Receiverships

Our attorneys have developed an expertise in the area of federal receiverships, monitorships, and examinerships. The firm or its professionals have been appointed by federal and state courts to these positions, or have been engaged by court appointees to act as their counsel, spanning a period covering more than 15 years. In each case, a regulatory agency typically recommends that a receiver, monitor, or examiner be appointed to marshal, preserve, secure, and monitor the assets and operations of the companies or individuals whom the agency believes to have committed fraudulent acts. We work closely with forensic accountants and information technology specialists, forming a forensic investigative team that the receiver or other court appointee engages to detect and report on the fraud and secure the assets of the receivership estate.

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To learn more, please contact Peter M. Saparoff or John F. Sylvia, Co-Chairs of our Securities Litigation group.

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