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 TPG, Comcast, Federal National Mortgage Association (“Fannie Mae”), FHFA, HSBC Bank, ACA Financial Guaranty, Royal Bank of Canada, Loreley Financing, U.S. Bank and Veleron.
Our securities litigation practice is highly ranked by publications such as Chambers USA and The Legal 500.
Defense-side representations include:
- TPG, one of the world’s largest private equity funds, in a series of cases relating to a Euro 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, the largest broadcasting cable television company in the world, in securing a dismissal of the largest claim ever filed for disgorgement of short-swing profits pursuant to Section 16(b) of the Securities Exchange Act of 1934. The decision was affirmed by the Second Circuit, a major victory for Comcast.
- Royal Bank of Canada in securities fraud putative class actions (including the Newby class action) stemming from Enron's demise, alleging that RBC assisted Enron in misusing various complicated transactions and financial structures to overstate Enron's earnings and financial health. Kasowitz successfully 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.
- 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.
- 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.
- 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.
Plaintiff-side representations include:
- 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 & Co. 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.
- Veleron, a company within Basic Element, a diversified industrial group, in a securities fraud claim stemming from Morgan Stanley’s conduct in short-selling shares of Magna International, a Canadian auto parts manufacturer, for its own account, while in possession of confidential, non-public information received as credit derivative counterparty and disposal agent. Veleron’s securities fraud claim was tried before a federal jury to verdict, and the case is now on appeal in the United States Court of Appeals for the Second Circuit.
- DWS Parties, stakeholders in a commercial mortgage-backed securities trust administered by Wells Fargo, in a $770 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.
Chambers USA 2016 Ranks Kasowitz as Leading Securities Firm
Chambers USA 2016 has again ranked Kasowitz as a leading law firm in the area of Securities: Institutional Plaintiffs. Clients described partner Marc Kasowitz as a "go-to bet-the-company litigator," partner Aaron Marks as providing "spectacular and very pragmatic advice" on high-stakes commercial disputes and partner Daniel Fetterman as "a genuinely gifted trial lawyer and very good negotiator." To read more, please click here.
Legal 500 US 2016 Recommends Kasowitz Securities Litigation Group
Legal 500 US 2016 has again recommended Kasowitz, highlighting the firm as providing the most cutting edge and innovative advice to corporate counsel in securities litigation cases nationwide. To read more, please click here.
U.S. News and Best Lawyers 2017 Ranks Kasowitz as a Best Law Firm
U.S. News - Best Lawyers has ranked Kasowitz as a "Best Law Firm" in the area of Litigation - Securities. To read more, please click here.