During periods of economic turmoil, corporations and senior executives are particularly attractive targets for government regulators and private securities plaintiffs. In times like these, experienced legal counsel is invaluable and substantial trial experience is a must. At Keker, Van Nest & Peters, we bring our trial skills to every setting in which securities problems arise, from investigations by the Securities and Exchange Commission and the Department of Justice, to class actions and shareholder derivative suits.
Our expertise covers virtually every aspect of securities law enforcement, including revenue recognition, market timing or late trading, and the recent spate of options backdating investigations . We have handled scores of matters involving traditional areas of securities law enforcement, such as allegations of insider trading, accounting and disclosure fraud, and misbehavior by brokers and other securities professionals.
Chambers ranks Keker, Van Nest & Peters as one of the top securities litigation firms in the nation.
In 2010, The American Lawyer named Stuart Gasner Litigator of the Week for his win against the Securities and Exchange Commission in a stock options backdating case.
Legal 500 described the firm as "peopled with a preponderance of outstanding trial lawyers ... the team excels at representing high-level company executives in criminal trials across the waterfront of offenses including securities fraud and insider trading."
Cases of Note
Securities and Exchange Commission v. Former Chief Executive Officer:
We are currently defending the former CEO of Fannie Mae in an SEC action filed in the Southern District of New York related to Fannie Mae’s disclosures regarding its exposure to “subprime” and “Alt-A” residential mortgages.
Receiver v. Venture Capital Firm:
We won a total victory for a prominent Silicon Valley venture capital firm, which, along with 17 other defendants, was accused of conspiracy and breach of fiduciary duty. Our client and another venture capital firm invested in an internet-based portfolio company. The other firm sold the company’s stock to our client, which made a substantial profit after the company’s IPO. The stock sale, along with several other investments, led to the other firm’s collapse. In an effort to recoup its losses, the other firm’s receiver filed suit, accusing our client of conspiring with the company to sell the stock for a fraction of its value. Nearly all the other defendants settled, however we litigated the matter to its conclusion. After winning three different demurrers and a motion to dismiss, we won a final judgment for our client.
United States v. McGraw-Hill Companies, Inc., et al.:
As lead counsel for McGraw Hill and its Standard and Poor’s division, we defended our client from the government’s suit which sought at least $5 billion in penalties under the Financial Institutions Reform, Recovery and Enforcement Act. The government accused S&P of fraud in its rating of hundreds of residential mortgage backed securities (RMBS) and collateralized debt obligations (CDOs) in the years leading up to the financial crisis in 2008. McGraw Hill ultimately settled with the government, and more than 20 states that made similar claims under state laws.
Plaintiff v. Intuitive Surgical, Inc.:
We defended Intuitive Surgical, Inc., a leading manufacturer of cutting-edge robotic surgery devices, from a securities class action. Plaintiffs alleged that Intuitive Surgical issued false and misleading statements regarding the company's financial results and prospects, when during the economic crisis of 2008, its financial results did not meet previously announced predictions. Plaintiffs’ lawyers filed a securities class action, which U.S. District Judge Lucy H. Koh dismissed with leave to amend. Then in a written opinion, Judge Koh agreed with each of our arguments, and dismissed the class action for the second time, this time with prejudice. Finally, the Ninth Circuit unanimously affirmed the dismissal in a 23-page published opinion.
Securities and Exchange Commission v. Executive:
The Securities and Exchange Commission launched a securities fraud suit in California federal court against our client, a former vice president of sales. The SEC claimed he grossly inflated his company's revenue in order to raise additional capital from investors. We also defended him in a parallel criminal investigation. We were able to prevent any criminal charges from being filed, and resolved the SEC case for a small penalty.
Plaintiff v. Amyris, Inc.:
In this putative securities class action, the plaintiff accused our client, a renewable energy company, of knowingly making false and misleading statements over the production of a chemical used in transportation fuels. After we demonstrated the company was simply mistaken in their projections and its statements provided meaningful cautionary warnings, the judge granted our motion to dismiss.
Securities and Exchange Commission v. Brian Stoker:
We defended former Citigroup executive Brian Stoker in one of the rare financial crisis cases to go to trial. Mr. Stoker, who worked on the structuring desk at Citigroup, was charged with securities fraud in connection with Citigroup’s 2007 marketing of a $1 billion collateralized debt obligation (CDO) backed by assets tied to the housing market. In its enforcement action the SEC contended that Citigroup had played a role in the selection of the CDO’s underlying mortgage securities and had taken a short position in those securities. The SEC contended that Mr. Stoker was negligent for not disclosing information about Citigroup’s actions in its marketing materials. After a two-week jury trial in the Southern District of New York with Judge Rakoff presiding, the federal jury rejected the SEC’s case and found Mr. Stoker not liable on any of the SEC’s claims.
Securities and Exchange Commission v. Former Chief Financial Officer:
We defended the former chief financial officer of a San Francisco-based hedge fund firm against charges of insider trading. The case was part of the government’s push to make insider trading the focus of financial fraud prosecution. The Securities and Exchange Commission named our client and several others in a civil suit, alleging they made more than $8 million trading on stocks based on insider tips. We knocked out half of the case on summary judgment and settled the remainder on very favorable terms.
United States v. Former Chief Executive Officer:
We represented the former CEO of a public company in a criminal investigation, a Securities and Exchange Commission suit, a derivative shareholder suit, a breach of contract suit by our client against his former company, and that company's counterclaim for hundreds of millions. All of these matters were related to the company's historical stock option granting practices. We resolved all of the matters against our client with net payments of more than $10 million to our client.
Securities and Exchange Commission v. Former Chief Financial Officer:
We represented a chief financial officer charged in one of the largest criminal securities fraud cases in recent U.S. history. We represented him in the criminal and administrative investigations, as well as in parallel civil litigation. Following pretrial litigation, our client pled guilty and received a six-year prison sentence. Civil litigation was favorably settled.
Securities and Exchange Commission v. Software Company Founder and Former Chairman:
We represented a multi-billion dollar software company's founder and former chairman of the board in an options backdating investigation. The case was resolved on favorable terms, with no charges filed.