Securities Litigation

Securities litigation can pose some of the highest stakes for a business. The Securities Litigation Team at Gibbons has significant trial and appellate experience at the federal and state levels, in civil and criminal actions, arbitration and mediation proceedings, and internal and regulatory investigations, in cases ranging from single-plaintiff matters to “bet the company” class actions.

With attorneys who include retired members of the judiciary and former Assistant United States Attorneys and Assistant District Attorneys, the Gibbons team combines insight, high-level litigation skills, and the benefit of longstanding relationships to effectively guide clients through these complex, potentially disruptive cases. Our clients include public and private companies, investment banks, partnerships, nonprofit organizations, officers, directors, shareholders, underwriters, hedge funds, broker-dealers, and other financial institutions.

Gibbons attorneys represent both businesses and individuals in federal and state court proceedings involving federal securities laws, state securities (“blue sky”) laws, and common law claims arising from securities transactions. We represent clients in litigation stemming from disputed securities investments, corporate mergers and acquisitions, initial public offerings, and stock sale and other agreements. For example, Gibbons represented an executive of a major investment firm in a shareholder derivative action arising from the subprime MBS crisis; a major hedge fund in a private, federal insider trading action; an asset management firm in an action involving a stock split; a hedge fund subsidiary in an action involving disputed securities trades; an issuer in a breach of a CDO Indenture action; and a broker-dealer in a placement fee dispute. While many of the proceedings have involved fraud claims, the contexts in which they have arisen are varied and include the litigation of federal securities and common law claims stemming from failed corporate investments or mergers and acquisitions (e.g., hostile tender offers, negotiated stock sale agreements, and going private “freeze out” merger transactions). In fact, we have significant experience on both the offensive and defensive sides of M&A-related proceedings. We also litigate federal securities claims arising from proxy contests for corporate control.

Areas of Focus

Securities Class Actions

The firm’s longstanding securities class action practice is as accomplished and varied as the sophisticated clients who, time and again, retain Gibbons to handle their most crucial and complex matters. Our experienced securities litigators represent all manner of issuer, underwriter, advisor, auditor, officer, and director in the defense of class action suits and other litigation alleging violations of the Securities Act of 1933, Securities and Exchange Act of 1934, and Rule 10(b)(5) of the SEC Rules, as well as claims arising under the Investment Advisers Act of 1940, Investment Company Act of 1940, Sarbanes-Oxley Act of 2002, and Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Our attorneys’ proficiency, experience, and tireless commitment to clients’ objectives have earned Gibbons the trust of industry leaders nationwide in connection with their high-stakes class action litigations.

Shareholder Derivative Actions

Gibbons attorneys have handled numerous shareholder derivative/fiduciary duty actions, in both federal and state court actions in New York and New Jersey, as well as in Delaware’s Chancery Court and Supreme Court. Our attorneys have represented both plaintiffs and defendants in such actions and have undertaken lead counsel and co-counsel roles in defense of some of the more important actions to have arisen out of the financial crisis.

SEC Investigations and Proceedings

Our firm has had substantial involvement with Securities and Exchange Commission (SEC) proceedings. For example, Gibbons served as counsel for the receiver of Paragon Securities before the SEC with regard to various regulatory issues and civil and criminal proceedings. Subsequently, the firm became the leading New Jersey firm sought by the SEC and the Securities Investor Protection Corporation (SIPC) to conduct major broker-dealer liquidations. We also represent various corporations and individuals in connection with both civil and criminal investigations and enforcement proceedings commenced by the SEC. In addition, we have served as independent consultant in an SEC enforcement action against one of the largest independent broker-dealers in the U.S. in a matter involving Reg S-P and company obligations to safeguard customer financial information.

Broker-Dealer Litigation and Arbitration

Gibbons attorneys have extensive experience handling and winning securities arbitrations and mediations in FINRA’s dispute resolution forum and other facilities, including JAMS and the American Arbitration Association (AAA). Representative matters have ranged from claims asserted by public customers, including a broad variety of sales practice violations, to intra-industry disputes, including trade discrepancies and such employment issues as claims of raiding and breach of restrictive covenants. With limited rights of appeal, arbitrations must be handled correctly the first time, and Gibbons attorneys have a complete understanding of the substantive and procedural aspects of these unique proceedings.

Private Fund / Hedge Fund / Private Equity Litigation

Our firm counsels clients with respect to the formation and operation of all types of private investment funds (“Private Fund”), including hedge funds; private equity funds; leveraged buyout funds; venture capital funds; business development companies (BDCs) and hybrid funds (whether the fund invests in equity or debt instruments, commodities, real estate, or other assets); distressed investment funds; funds-of-funds; secondary funds; special situations funds; and commodity futures funds. Our clients include broker-dealers, commodity trading advisers/commodity pool operators, and fund managers and their sub-advisers. Our Private Fund clients rely on our knowledge, skill, and experience regarding developing rules and case law in this sector’s rapidly-evolving regulatory and economic landscapes.

Gibbons attorneys have handled various litigations and administrative proceedings for Private Fund clients, including partnership disputes, class actions, contract claims, securities arbitrations, regulatory proceedings, and employment matters. Our experienced securities litigation counsel also advise clients in connection with formation and investment structuring issues, with an eye toward minimizing the risk of future litigation. We offer our Private Fund clients a realistic judicial perspective, provided by retired jurists and scores of former state and federal judicial clerks and former state assistant attorneys general and federal prosecutors; a pioneering E-Discovery Task Force; the Gibbons Law Alert blog; Litigation Support and Knowledge Management professionals fully equipped with thought-leading resources and technology; and many other litigation services that are important in handling the complex litigation needs of our Private Fund clients.

Cybsersecurity and Data Protection

Our attorneys have extensive experience regarding regulation and use of electronic technology in the financial services industry, including SEC, FINRA, Commodity Futures Trading Commission (CFTC), banking, insurance, and state laws and regulations. We counsel clients in the financial industry in assessing litigation risks and developing and implementing cybersecurity programs under Reg S-P for broker-dealers, investment advisers, and public and private funds. Gibbons attorneys have created Cyber Incident Response Plans and have helped clients identify reasonably foreseeable security risks, as well as design and implement safeguards, staff training, and service provider safeguards to address those risks in the context of potential litigation. We have worked with our clients to create identity theft and “red flag” rule programs and have developed data breach response programs, system monitoring practices, consumer notification procedures, and notice guidelines. Our attorneys also routinely counsel clients in litigation on cross-border issues regarding current and proposed EU Directives governing privacy and data security.

Securities Industry Antitrust and RICO Experience

The firm’s experience in securities litigation was put to use in our representation of a major NASDAQ market maker in connection with the Department of Justice and SEC investigations of alleged price fixing on the NASDAQ stock market. In addition to resolving the dual government investigations, we also represented our client in the related private class action litigation and extricated our client through an early, favorable settlement before the remaining industry members settled for far greater amounts. In another matter involving the financial markets, we successfully represented a national prime lending bank in connection with a putative class action alleging a price-fixing conspiracy among several major banking institutions to fix the prime rate. The firm also has significant RICO experience and has litigated numerous RICO class action claims and other claims brought against financial institutions.