Stephen W. Tountas is a versatile trial lawyer who prosecutes and defends complex securities fraud actions and commercial disputes on behalf of leading hedge funds, mutual funds, family offices, and public pension funds.
Steve has been a principal member of several high-profile trial teams and has recovered billions of dollars for stakeholders of public companies. He also regularly handles significant defense-side litigation, including matters arising from allegations of securities fraud and corporate malfeasance.
In addition to his active litigation practice, Steve develops potential cases for his clients and provides strategic advice regarding the relative merits of pursuing litigation on a direct or class-wide basis. Sophisticated creditors also frequently turn to Steve to develop litigation strategies in anticipation of potential Chapter 11 bankruptcy filings that may enhance their recovery of fraud-related losses compared to other stakeholders.
The National Law Journal named Steve a Plaintiff’s Trailblazer and highlighted the success of his market-leading strategies in several recent direct securities actions. He is also included on Lawdragon’s lists of the 500 Leading Plaintiff Financial Lawyers in America and the 500 Leading Litigators in America; recommended by The Legal 500 for securities opt-out litigation and securities defense litigation; and recommended by Benchmark Litigation as a Litigation Star.
Steve oversees Kasowitz's portfolio of contingency and alternative fee matters and spearheads the Firm's outreach to litigation funders.
Work Highlights
Plaintiff-Side Securities Litigation
- Valeant Pharmaceuticals Opt-Out Litigation. On behalf of several mutual funds, a public pension plan, and other institutional investors, Steve is pursuing direct securities fraud claims, arising from Valeant’s improper accounting and billions of dollars of fraud-related losses. Steve successfully resolved several of his direct actions for certain pension funds by asserting market-leading claims under the New Jersey RICO Act. The non-settled direct actions recently survived summary judgment and are being prepared for trial.
- Adeptus Health Opt-Out Litigation. On behalf of a hedge fund that held one of the largest equity positions of Adeptus Health prior to its multi-billion dollar bankruptcy, Steve successfully pursued direct securities fraud claims against Adeptus’s former officers, directors, and private equity sponsor. The terms of the settlement are confidential.
- Short-Selling Litigation and Investigations. On behalf of several public companies, Steve investigated and pursued claims against numerous market participants that conspired to execute a multi-year short-and-distort scheme to improperly drive down the share prices of public companies for their own financial benefit.
- Strategic Advisor and Lead Counsel to one of the world’s largest credit funds in connection with several high-profile class actions involving the alleged manipulation of various complex financial instruments.
Defense-Side Securities Litigation
- Lead Counsel to the former Chief Financial Officer of a Public Company in a securities class action arising from allegations of accounting fraud. Steve successfully secured a settlement for his client before the resolution of the motions to dismiss and prior to the commencement of discovery.
- Lead Counsel to a Public Company and Numerous Senior Officers in a securities class action arising from allegations of accounting fraud. Steve secured the dismissal of the matter with prejudice and successfully argued the appeal before the Second Circuit.
- Lead Counsel to a Fortune 500 Company that was the subject of a DOJ investigation and received numerous related books and records demands under Delaware law. Steve resolved all such matters without any litigation or monetary settlements.
- Lead Counsel to the Former Officer of a Public Company in connection with an SEC investigation and related internal investigation arising from allegations of accounting fraud.
- Strategic Advisor to Several Public Companies that were defendants in high-profile securities class actions and numerous opt-out actions.
Bankruptcy and Creditors' Litigation
- Unsecured Creditors’ Litigation Trust of Essar Steel Minnesota. On behalf of the Litigation Trustee, Steve led a successful action for unsecured creditors by pursuing claims against two former officers and the debtor’s controlling shareholder, arising from the alleged siphoning of hundreds of millions of dollars from a failed construction project. After five years of litigation, Steve settled the matter for $26.5 million, which included a $5.5 million out-of-pocket cash payment from an uninsured individual defendant.
- SunEdison Creditors' Litigation. On behalf of numerous prominent hedge funds, Steve secured a favorable settlement with SunEdison’s officers and directors following SunEdison’s dramatic multi-billion dollar bankruptcy and alleged accounting scandal. The terms of the settlement are confidential.
- Strategic Advisor and Lead Counsel to a multi-billion dollar hedge fund that was threatened with litigation by a Litigation Trustee in connection with a high-profile bankruptcy matter. Steve successfully negotiated a resolution that avoided litigation and did not involve a monetary settlement.
- Official Committee of Unsecured Creditors of Essar Steel Minnesota. Steve led an investigation into potential claims against several potential defendants that resulted in the litigation brought by the Court-appointed Litigation Trustee.
Prior to joining Kasowitz:
- Schering-Plough / Merck ENHANCE litigation. An institutional investor in pursuing securities fraud claims against a leading pharmaceutical company, resulting in a $473 million settlement several weeks before trial. At the time of the settlement, it represented the largest securities class action settlement in history from a pharmaceutical company. Together with a related settlement with Merck, the matters settled for $688 million.
- Adelphia. Ten institutional investors that opted out of a high-profile securities class action to pursue direct securities fraud claims arising from Adelphia’s bankruptcy. Secured numerous favorable settlements with Adelphia’s officers, independent directors, outside auditor, numerous financial institutions, and other third parties.
- MF Global. An institutional investor in pursuing securities fraud claims arising from the bankruptcy of a commodities brokerage firm, resulting in a $234 million settlement.
- Broadcom. An institutional investor in pursuing securities fraud claims against a semiconductor company and Big 4 audit firm, arising from a $2 billion financial restatement, resulting in a $173 million settlement. The settlement included the largest cash recovery from an audit firm relating to options backdating, and resulted in a landmark decision by the U.S. Court of Appeals for the Ninth Circuit regarding the standard for pleading a securities fraud claim against an outside auditor.
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