Securities Litigation and Investigations

Our lawyers have extensive experience in securities litigation and investigations, representing executives, directors, officers, corporations, investment companies and investment advisors in litigation, before the SEC and Massachusetts regulators and in criminal and internal investigations. In the mutual fund area, we have represented well-known mutual funds and independent trustees in class action litigation, executives in investigations over practices such as market timing and a special litigation committee of a family of major mutual funds as Massachusetts counsel. We take pride in the excellent results we have achieved for our clients in litigation and in the aftermath of investigations. Although securities matters are often very complex, we focus on assessing our clients’ situation, coordinating closely and efficiently with other players as appropriate and in our client’s interest, and securing the best result for our client.

The range of matters in which we have experience span the Investment Company Act of 1940, Section 10(b) and other claims under the Securities Exchange Act of 1934, the Foreign Corrupt Practices Act, claims related to public offerings under the Securities Act, the Investment Advisers Act of 1940 and fraud related claims arising under state law. We also handle shareholder or partnership derivative cases raising issues such as breach of fiduciary duty, waste and professional liability.

Matters we have handled for clients include the following:

  • Represented business executives and officers in various SEC and state securities investigations and corporate internal investigations, involving mutual funds, financial services companies, software companies and other industries with issues including market timing, backdated options, trading practices, insider trading, the Foreign Corrupt Practice Act, conflicts, revenue recognition and financial reporting.
  • Defended a regional accounting firm against direct and derivative claims in Delaware Chancery Court, and then in Massachusetts Superior Court, filed on behalf of investors in hedge funds audited by our client. Plaintiffs alleged that the value of the two portfolio companies, in which the hedge funds had invested over $30 million, was inflated and that the accounting firm had negligently certified the financial statements without qualification. After a hearing on pending motions, rather than proceed in the face of the court’s adverse order on jurisdictional discovery, plaintiffs voluntarily dismissed their claims, and subsequently filed a new action in the Business Litigation Session of Massachusetts Superior Court, where the case is now proceeding.
  • Represented as Massachusetts counsel private equity acquirer of public company in shareholder class action litigation challenging the merger and disclosures by the target company. The merger has been completed and the litigation was successfully settled.
  • Acted as Massachusetts counsel for special litigation committee appointed by the boards of trustees of a family of a major family mutual funds, which was investigating claims asserted by derivative plaintiffs concerning the par redemption of auction rate preferred securities by certain of the funds.
  • Successfully represented family of mutual funds in litigation brought under Investment Company Act of 1940 and related theories. The federal district court dismissed the claims, in part based on arguments that we made on behalf of the funds, that (i) most of the claims should properly have been asserted as derivative claims and (ii) plaintiff failed adequately to plead an excuse for failure to make demand upon the funds. In re Eaton Vance Mutual Funds Fee Litigation, 380 F. Supp. 2d 222, (S.D.N.Y. 2005), 403 F. Supp. 2d 310 (S.D.N.Y. 2005), aff’d 481 F. 2d 110 (2d Cir. 2007).
  • Represented a mutual fund as nominal defendant in claims brought under Investment Company Act of 1940 and common law. After the firm moved to dismiss the two derivative counts due to plaintiffs' failure to make pre-suit demand, the plaintiffs withdrew those claims.
  • Defended independent trustees of the Reserve Fund in a mutual fund “breaking the buck” case. The court granted defendants’ motion for stay and the case was then consolidated with other related cases as a multi-district litigation in the Southern District of New York. After the New York federal court remanded the case back to state court, the plaintiff voluntarily dismissed its claims based on an order by the federal court in a related SEC action.
  • Represented out-of-state public company in connection with shareholder litigation relating to its acquisition of Massachusetts public company, which was successfully resolved to permit acquisition to proceed.
  • Represented software company in Federal court litigation involving sale of its assets to another company in return for cash, stock and an earn-out. On behalf of our client we asserted misrepresentation claims against the former CEO and CFO of the purchaser based on diminished value of purchaser’s stock and earn-out. The case settled after mediation to the satisfaction of our client.
  • Successfully represented two in-laws of the CEO of a publicly-traded pharmaceutical company in an SEC investigation into potential insider trading. Following our Wells submission, SEC decided not to proceed with the case.
  • Represented the former CFO of a public biotechnology company in an SEC investigation that focused on the Company's restatement of its financial results due to the improper recognition of revenue. The SEC concluded its investigation without filing any charges against the CFO.
  • Represented a Connecticut-based broker-dealer in defense of a customer complaint alleging a pattern of unauthorized and inappropriate trading.
  • Represented a New York-based broker-dealer in defense of a customer complaint in arbitration as well as in the courts of Tennessee. Following a successful motion to remand and a summary judgment motion, case was settled advantageously.