R. Scott Garley is a member of the Gibbons Business and Commercial Litigation Department and Chair of its Securities Litigation Team. Mr. Garley focuses his practice on litigation, arbitration, investigations and counseling in connection with securities transactions and regulatory matters, directors and officers liability and corporate governance matters, executive compensation and employment matters, business tort claims, and complex commercial disputes.
He has extensive experience defending against securities fraud class actions for LTV Corporation, Alliance Capital Management, and Calgroup, Inc., among others; and has defended against shareholder derivative suits.
He has also prosecuted securities fraud cases for institutional clients. Two such cases are detailed below:
Roche International Ltd.: Gibbons represented Roche International Ltd., a subsidiary of F. Hoffmann-La Roche Ltd, in connection with claims and litigation against Credit Suisse Securities (USA) LLC and its parent company, Credit Suisse Group AG (collectively, “Credit Suisse”), arising from Credit Suisse’s sale of over $330 million in auction rate securities to Roche that were fraudulently represented to be guaranteed student loan securities. As a result of their fraudulent scheme and conduct against Roche and other corporate investors, Julian Tzolov and Eric Butler, the Directors of Credit Suisse’s Corporate Cash Management Group, were indicted and later convicted in criminal proceedings brought in the U.S. District Courts for the Eastern and Southern Districts of New York. Roche commenced a FINRA arbitration and related federal court action against Credit Suisse to recover its losses of almost $300 million. Roche’s claims against Credit Suisse were settled on very favorable terms in December 2009.
Lehman Brothers: Gibbons represented Lehman Brothers, Inc., in New York state and federal court actions, NASD arbitration, and SEC enforcement and receivership proceedings arising from the collapse of Ashbury Capital Partners, a hedge fund operated by Mark Yagalla that later turned out to be a $65 million Ponzi scheme. Lehman, one of the brokerage firms for defendants Ashbury Capital and Yagalla, lost more than $7.5 million as a result of defendants’ fraudulent securities trades and other activities. We represented Lehman in court actions, arbitration proceedings, and the SEC receivership action against Ashbury Capital, Yagalla, and their primary market making firm and its principals as part of our efforts to recover Lehman’s damages. We later defended Lehman in connection with a fraudulent transfer action brought by the SEC receiver to recover funds and securities received or transferred through the Lehman brokerage accounts.