Our litigators maintain a strong understanding of the complexities and ever-changing legislative landscape that impacts our financial services client base post-Sarbanes-Oxley. Among other things, we handle SEC enforcement and litigation defense, individual and class actions, defense of negligence and securities fraud claims. We deploy our Insurance Recovery attorneys on D&O claims, and our White Collar team on criminal securities claims and insider trading.
Representative Experience
Securities Class Actions
- Successfully represented a large information technology company in a class action alleging federal securities law violations (Section 10 of the Exchange Act of 1934) in the United States District Court for the Eastern District of New York.
- Represented a sportswear company in a securities class action alleging federal securities law violations (Section 10 of the Exchange Act of 1934) in the United States District Court for the Central District of California.
- Represented one of the world's largest banking institutions in a class action brought by shareholders of Enron Corp. claiming that several banks, including our client, were primary violators under U.S. securities laws with respect to Enron's false financial statements. Kelley Drye had responsibility for the accounting issues related to all claims, including prosecuting and defending cross claims by and against Arthur Andersen, Enron's former accountants.
- Advised one of the world's largest banking institutions on various settlement issues arising out of a securities class action brought by purchasers of WorldCom bonds. Kelley Drye's work included litigation over various provisions of the settlement agreements entered into by some of its co-defendants, including substantial litigation on the propriety of the entry of a Bar Order by the District Court. The firm continues to advise this client on individual actions brought by those plaintiffs who opted out of the WorldCom class action.
- Represented one of the world's largest banking institutions in its defense of a class action securities claim made under Sections 11 and 12, arising out of the banks role as underwriter of an initial public offering. After Kelley Drye successfully argued that the class should not be certified, the matter settled on terms which were highly favorable to our client.
- Represented a major financial institution in a class action in the District of New Jersey claiming fraud in the purchase of retirement homes in Florida. The complaint named thirty-five defendants, including some of the largest financial institutions in the world and a prestigious New York law firm, and claimed $500,000,000 in damages. We obtained dismissal of all the claims at the District Court level and prevailed in the Third Circuit.
- Successfully represented a manufacturing conglomerate in class action securities fraud and shareholder derivative litigation in Connecticut related to the company's active participation in an international price-fixing scheme to which it plead guilty and was fined $110 million. Kelley Drye was able to secure a dismissal of the derivative action and settled all of the securities-related litigation favorably and well within insurance limits.
- Succeeded in obtaining dismissal of two lawsuits, affirmed by the Second Circuit Court of Appeals, alleging RICO, securities fraud and common law fraud claims against one of Korea's largest banking institutions. The plaintiffs in the two related actions were former shareholders of Lernout & Hauspie Speech Products N.V. ("L&H") who claimed losses of more than $600 million when L&H declared bankruptcy. Plaintiffs claimed that L&H disseminated false financial statements, based largely on a fraud committed by L&H's Korean subsidiary and various Korean Banks including our client. Kelley Drye successfully moved to dismiss the claims on behalf of our client for failure to state a claim under U.S. securities laws and to plead fraud with particularity. The Second Circuit affirmed the "bright line" test adopted in Wright v. Ernst & Young, and also confirmed that Federal Rule 9(b) applies to state law claims sounding in fraud.
Directors and Officers
- Representing a director of one of the GSE's in shareholders' derivative actions that have been consolidated in multi-district litigation in United States District Court for the District of Columbia. The case alleges violations of a number of accounting rules relating to mortgages, and arises out of an investigation into accounting practices at Fannie Mae by the federal Office of Federal Housing Enterprise Oversight, which led the Securities and Exchange Commission to direct our client to restate prior financial statements. The district court granted defendants' motion to dismiss and plaintiffs' appeal remains pending.
- Represented the former Chief Financial Officer of the owner of numerous supermarket and food service concerns worldwide, in the Royal Ahold NV Securities Litigation, one of the largest securities fraud class actions ever filed, which was consolidated in multidistrict litigation in United States District Court in Maryland. The claims related to Royal Ahold's restatement of $1.2 billion in net income as a result of vendor promotional allowance fraud at one of Royal Ahold's U.S. subsidiaries, as well as other allegations of accounting irregularities at Royal Ahold.
- Represented a major financial institution and certain of its officers and directors in class action securities fraud claims seeking over $2 billion for the decline in value of institution's stock. The case, brought in the United States District Court of the Southern District of New York, was dismissed on Kelley Drye's motion before class certification and before the start of fact discovery.
