Securities & Shareholder Litigation

Major public companies and individual defendants have entrusted us with the defense of their most important securities class action and derivative matters.

We are repeatedly asked to defend significant securities class actions and derivative lawsuits involving alleged securities fraud, breaches of fiduciary duty, and corporate-governance lapses. In defending these cases, the firm brings to bear its significant strengths, including our attorneys’ extensive knowledge of the applicable laws, a creative approach to legal arguments, our high-quality motions practice, and the firm’s vast collective trial experience. Using these strengths, we have obtained favorable resolutions in cases involving hundreds of millions, and sometimes billions, of dollars in alleged damages. Representative matters include:

  • We represent conferencing-and-headset giant Plantronics, now called Poly, in a securities class action seeking hundreds of millions in damages based upon allegations of distribution-channel stuffing. In March 2021, the district court granted our motion to dismiss plaintiffs’ complaint in its entirety, adopting our argument that the “complaint fails to adequately allege a channel-stuffing scheme” and thus failed “to satisfy the requisite standard” for pleading securities fraud.  In re Plantronics, Inc. Securities Litigation, No. 4:19-cv-07481-JST (N.D. Cal.).
  • We represent Universal Health Services, a Fortune 500 operator of acute and behavioral-health hospitals, in defending against a $1.5 billion securities class action arising from alleged misstatements about patient-admission practices. In August 2019, the district court granted our motion to dismiss with prejudice, and later denied plaintiff’s motion to amend. Teamsters Local 456 Pension Fund v. Universal Health Services, et al., C.A. No. 2:17-cv-2817 (E.D. Pa.).
  • We defended the independent directors of a publicly traded investment fund in an action seeking more than $1 billion in damages for alleged breaches of fiduciary duty. After a lengthy trial, the Royal Court of Guernsey issued a verdict for the defendants on all counts, which was affirmed on appeal. Carlyle Capital Corporation Ltd. v. William Elias Conway Jr. et al., Civ. No. 1510 (Royal Court of Guernsey).
  • We defended Community Health Systems, one of the largest hospital management companies in the United States, in two different sets of securities fraud actions – one arising from its 2016 spinoff of an affiliate (Zwick v Quorum Health Corp et al., No. 16-cv-2475 (M.D. Tenn.); R2 v. Quorum Health Corp. et al., No. 2017-cv-578 (Williamson Co. Cir. Ct.)) and the other from alleged misstatements about patient-admission practices (Norfolk Cty. Retirement Sys. v. Community Health Sys., Inc., No. 11-cv-489 (M.D. Tenn.). We settled all of these cases on favorable terms well before trial.
  • We represented the board of directors of Las Vegas Sands Corp. in state and federal shareholder-derivative suits alleging violations of the Foreign Corrupt Practices Act in Macau, China. After extensive motion to dismiss briefing, the lead state and federal derivative cases were dismissed in full. See Kohanim v. Adelson, et al., (No. A-11-636656-B, Nev.); Moradi, et al. v. Adelson, et al., (No. 2:11-CV-490, D. Nev.).
  • We successfully argued for dismissal of securities–fraud claims against our auditor-client arising out of the misstated financials of a reverse-merger Chinese corporation. In re Puda Coal Inc. Securities Litigation, No. 11-cv-2598 (S.D.N.Y.).
  • We represented Universal Health Services in responding to stockholders’ demands to inspect corporate books and records under Section 220 of Delaware’s corporation law, including by litigating the purpose, scope, and terms of such inspection demands in Delaware’s Court of Chancery when necessary. City of Cambridge Ret. Sys. v. Universal Health System, Inc., No. 2017-0322 (Del. Ch.).
  • We represented defendants in a nine-figure shareholder class action alleging misstatements concerning patient care and billing. The case settled on favorable terms shortly before trial. Garden City Employees’ Retirement System v. Psychiatric Solutions, Inc., No. 3:09-cv-00882-WJH (M.D. Tenn.).
  • We won a motion to dismiss a putative class action asserting federal and state securities claims seeking hundreds of millions in damages against the independent directors of a private equity group and defunct public investment fund. That decision was affirmed on appeal by the D.C. Circuit. L. Phelps, et al. v. Stomber, et al., No. 11-cv-01142 (D.D.C.).
  • We represented BDO in a federal shareholder class action seeking hundreds of millions of dollars in damages arising from a BDO audit. The case settled on favorable terms while our summary judgment motion was pending. Teachers’ Retirement System of Louisiana, et al. v. ACLN, Ltd., 01-CV-11814 (S.D.N.Y.).
  • We represented Grant Thornton in a putative shareholder class action. We defeated plaintiffs’ motion for class certification by convincing the court that plaintiffs failed to adduce sufficient evidence that the underlying security traded in an efficient market. Krogman v. Sterritt, 202 F.R.D. 467 (N.D. Tex.).
  • We obtained summary judgment and dismissal of all claims against our auditor-client in a large securities fraud class action. We won on multiple grounds, including scienter and loss causation. The decision was affirmed by the Third Circuit on appeal. In re IKON Office Solutions, Inc. Securities Litigation, No. 98-cv-4286 (E.D. Pa.).

For cases that continue beyond threshold motions, we tackle discovery and pre-trial tasks competently and efficiently, and stand ready to try a case to verdict, if necessary, to obtain the best outcome.  We have found that the threat that our well-known willingness and ability actually to take a case to trial provides substantial leverage in our dealings and negotiations with opposing counsel.  In recent years, we obtained a complete victory for our clients—three individual directors of a defunct investment fund—following a lengthy trial of claims relating to alleged breaches of fiduciary duties with a total damages that exceeded $1 billion.