securities litigation brochure - troutman sanders llp · defense of actrade financial technologies,...

Securities Litigation Practice Group Overview

ContentsAbout Troutman Sanders LLP


Representative Experience

About Troutman Sanders LLP

Troutman Sanders is an international law firm which traces its origins to 1897. With more than 650 attorneys worldwide, we are a full-service law firm engaged in virtually every aspect of civil and commercial law. The firm has long-standing relationships with many major business organizations, including multinational corporations and banking institutions, regional companies, start-up enterprises, foreign governments, federal and state agencies, non-profit organizations, individuals, and entrepreneurs.

Troutman Sanders is ranked #83 in the AmLaw 100. In 2006, BTI Consulting Group, an independent market research and management company, ranked Troutman Sanders as a “Go-To Law Firm,” “National Power Player,” and “Fortune 1000 Primary and Recommended Law Firm” based on individual interviews with 376 corporate counsels of privately held companies and Fortune 1000 corporations.

Our Offices

Atlanta

New York

Norfolk

Raleigh

Richmond

Washington, DC

Virginia Beach

Tysons Corner

International offices: Hong Kong and London

Newark


With experienced attorneys in offices located in Atlanta, New York, the District of Columbia, Raleigh, and throughout Virginia, the Troutman Sanders Securities Litigation Practice Group has the depth of experience and expertise to help clients meet the challenges of today’s business environment.

When confronted with litigation, investigations, regulatory proceedings, or other complex corporate and securities issues, our attorneys focus on the client’s business needs and objectives and work together with the client to manage risks and develop strategies for obtaining a successful result. We understand that the matters we handle are of utmost importance to our clients—not only are the stakes extremely high, but the costs and business interruptions are often substantial.

Our attorneys are result-oriented litigators with a reputation for providing the highest quality service to our clients in an efficient and cost-effective manner. Our attorneys have significant trial experience and are capable of trying the most complex issues to judges, juries, and arbitrators. However, from the outset of every engagement, we look for early solutions, whether by settlement or pre-trial proceedings. We are fully equipped to provide excellent legal representation, while at the same time maintaining a high level of accessibility and responsiveness to our clients.

Class Action and Derivative LitigationOur attorneys defend public companies, individual directors and officers, underwriters, and auditors in securities fraud class actions, shareholder derivative suits, and other securities-related litigation.

Other D&O Claims and Transactional LitigationOur attorneys represent public and private companies and individual shareholders, directors, and officers in shareholder disputes, corporate governance claims for bad faith, breach of fiduciary duties, and negligence, and other disputes arising from complex commercial transactions such as mergers and acquisitions.

Investigations and Enforcement ActionsOur attorneys work with businesses and individuals in responding to enforcement actions, investigations, and proceedings before the SEC, the Department of Justice, and other regulatory agencies. Our attorneys also design and perform internal investigations for boards of directors and their committees who have need for a confidential, objective assessment of certain business activities or practices (independent of, or in conjunction with, governmental investigations, regulatory proceedings, or private litigation).

Brokerage Firm RepresentationOur attorneys have wide experience and expertise representing both national and regional securities brokerage firms in complex lawsuits and arbitrations and in regulatory investigations and proceedings, involving the SEC, state regulatory commissions, and self-regulating organizations (NASD, NYSE, ASE, etc.).

Regulatory ComplianceWith the enactment of the Sarbanes-Oxley Act in 2002, securities and regulatory compliance has become increasingly complicated, and the activities of corporate boards and management are subject to intense scrutiny. The attorneys in our practice group work closely with our firm’s corporate and securities practitioners to help clients manage risks and navigate the current regulatory landscape.

Representative Experience

Our lawyers have a long history of obtaining successful results for our clients through early dismissals, favorable settlements, and, when necessary, trials. Our lawyers have been actively involved in the following engagements:

Shareholder Class Actions and Derivative Litigation

World Access Securities Litigation

U.S. District Court for the Northern District of Georgia

Defense of an international long distance service provider and several of its former officers and directors in a securities fraud class action alleging violations of the Securities Exchange Act of 1934 and the Securities Act of 1933

Yang, et al. v. Odom, et al.

U.S. District Court for the District of New Jersey

Defense of former officers and directors of a bankrupt telecommunications company in a shareholder class action alleging securities and accounting fraud

Bristol-Myers Squibb Litigation

U.S. District Courts for the Southern District of New York and the Northern District of Illinois and New York and Illinois State Courts

Defense of former CFO of Bristol-Myers Squibb Company in (i) federal class action securities, (ii) derivative, (iii) ERISA, and (iv) state court litigation relating to a $2.6 billion restatement of 1999, 2000, and 2001 financial statements

AirGate PCS Securities Litigation


Defense of AirGate PCS and several of its officers and directors a securities fraud class action brought pursuant to the Securities Act of 1933

WorldCom Securities Litigation

U.S. District Court for the Southern District of New York

Defense of former director and chair of the compensation committee of the board of a major telecommunications company in securities class action alleging accounting fraud

Friedman’s Securities Litigation


Defense of an alleged controlling shareholder in securities fraud class action alleging accounting fraud and asserting claims under the Securities Exchange Act of 1934 and the Securities Act of 1933

Tinney v. Geneseo Communications, et al.

U.S. District Court for the District of Delaware

Defense of nominal defendant AirGate PCS in a shareholder derivative action seeking to recover alleged short swing profits under Section 16 of the Securities Exchange Act of 1934

Actrade Financial Technologies Securities Litigation


Defense of Actrade Financial Technologies, Ltd. and several of its officers in consolidated securities class action

Pediatric Services of America Securities Litigation


Defense of an in-home healthcare provider and several of its officers and directors in a securities fraud class action brought pursuant to the Securities Exchange Act of 1934

Hendry et al. v. Leo F. Wells, III et al.

Georgia State Court (Superior Court of Gwinnett County)

Defense of Wells Real Estate Fund I, Leo Wells, III, and Wells Capital, Inc. in putative

class action lawsuit alleging violations of securities laws, breach of a partnership agreement, and breach of fiduciary duties

In re Endo-Lase Securities Litigation

U.S. District Court for the Eastern District of New York

Defense of Weiner & Company, former auditors of Endo-Lase, Inc., in seven consolidated class actions alleging that the auditors knew or should have known that Endo-Lase’s accounts receivable were overstated

Stratton Oakmont Securities Litigation

U.S. District Court for the Southern District of New York and New York State Court

Defense of underwriter in shareholder class actions alleging fraud in connection with various IPOs

Synthetics Industries Derivative Litigation

Delaware and California State Courts

Representation of directors of Synthetics Industries in various related derivative actions in connection with sale of company

Prudential-Bache Securities Litigation


Defense of accounting firm Laventhol Horwath in securities fraud class actions relating to various projections prepared by Laventhol that were included in the offering materials for certain Prudential-Bache limited real estate syndications

Jamesway Securities Litigation


Defense of officers and directors of Jamesway Corporation (which was being reorganized under the Bankruptcy Code) in securities class actions charging failure to disclose the company’s true financial condition

American Plan Corporation Securities Litigation

U.S. District Court for the Eastern District of New York

Representation of American Plan Corporation’s former auditors, Alexander Grant & Company (now Grant Thornton), in defense of related securities fraud class actions

Prime Motor Inns Securities Litigation


Defense of accounting firm J.H. Cohn & Company in securities class action charging Cohn with deficiencies in its audit of Prime Motor Inns in the area of revenue classification and the recording of complex real estate transactions (also represented Cohn in related SEC and AICPA proceedings)

Souter, et al. v. William L. Tatro, IV, et al.

U.S. District Court for the Western District of New York

Defense of Nathan & Lewis Securities, Inc. (a subsidiary of MetLife) in a class action claiming securities fraud, common law fraud, breach of contract, and breach of fiduciary duty

SunStar Healthcare Securities Litigation

U.S. District Court for the Middle District of Florida

Defense of corporation and officers and directors in securities fraud class action arising from failure of a Florida HMO

Mirant Securities Litigation


Defense of The Southern Company and certain individual defendants in a securities fraud class action (and two ERISA class actions) involving a decline in the stock price of a former subsidiary, Mirant Corporation, after it was spun off

Leslie Fay Securities Litigation


Defense of officers and directors in securities class actions alleging financial statement fraud, including overstated income and inventory and falsely booked sales

Cellular Technical Services Securities Litigation

U.S. District Court for the Western District of Washington

Defense of officers and directors of Cellular Technical Services in securities fraud class action in connection with claim of failure to properly disclose material adverse information

Thomas Brown, et al. v. Randolph Brown


Representation of outside directors of Medaphis Corporation in shareholder derivative action alleging breaches of fiduciary duties and violations of federal securities laws

Caldor Securities Litigation

U.S. District Court for the District of Connecticut

Representation of senior management of The Caldor Corporation in securities class actions alleging that defendants disseminated materially false and misleading information concerning Caldor’s financial condition, its relationship with its factors and lenders, and the adequacy of its capital position

Parnes, et al. v. Icon CMT Corp., et al.

Delaware State Court

Representation of directors of Icon CMT Corporation in derivative action arising from sale of corporation

Retirement Care Associates Securities Litigation

U.S. District Courts for the Northern District of Georgia and Central District of California

Defense of audit committee of board of directors in putative securities class actions

alleging misrepresentation in SEC filings regarding financial reporting and accounting issues

Other D&O Claims and Transactional Litigation

Voyager Pharmaceutical Corporation

North Carolina State Court

Defense of company in (i) litigation against a former officer and director and former consultant alleging breach of fiduciary duties and violations of confidentiality agreements, and (ii) books and records litigation filed by shareholder seeking access to corporate documents under Section 220 of the Delaware General Corporation Law

Stephen Johnston, Sr., et al. v. Baran Group, Ltd., et al.

Georgia State Court (Superior Court of Fulton County)

Defense of an Israeli public company and several of its officers and directors in a suit brought by former minority shareholders of acquired U.S. public company, asserting claims for breach of fiduciary duty and for oppression of the minority shareholders

Craighead v. Pediatric Services of America

U.S. District Court for the Middle District of Tennessee

Defense of the company and certain of its officers and directors in an action filed by the shareholders of an acquired company alleging that the defendants violated federal and Tennessee securities laws and committed fraud in connection with the acquisition

Global Assets Allocation Consultants, LLC, et al. v. Morgan Stanley Dean Witter Inc., f/k/a Morgan Stanley & Co, Inc.; Long Distance International, Inc.; Clifford Friedland; David Glassman; and World Access, Inc.

New York State Court

Defense of a public company against claims by acquired company’s shareholders that the defendants breached their fiduciary duties in the acquisition

Field v. Trump, et al.


Defense of officers of Pay N Save Corp. in class action relating to tender offer/leveraged buyout brought under the federal securities laws and for breach of fiduciary duty

Lewis, et al. v. Turner Broadcasting System, Inc., et al.

Georgia State Court (Superior Court of Fulton County)

Defense of Turner Broadcasting System, Inc. and certain directors in a derivative action seeking to enjoin merger with Time Warner Inc. and asserting a claim for breach of fiduciary duty for waste and usurpation of corporate opportunity

Black v. Finantra Capital, Inc.


Defense of Finantra Capital, Inc. and certain of its officers and directors against market manipulation claims brought under the Securities Exchange Act of 1934

HCS of Middle Tennessee, Inc. v. Notermann, et al.

Tennessee State Court (Circuit Court for Hamilton County)

Defense of individual officers of bankrupt Mariner Healthcare in fraud claim related to stock purchase agreement

Orleander Litigation

American Arbitration Association

Representation of officers and directors in action claiming securities and common law fraud in connection with the sale of their corporation

Investigations and Enforcement Actions

Representation of defendants in civil proceeding in which the SEC is seeking a permanent bar and fines against officers and directors of a public company based on alleged violations of the Securities Exchange Act, premised on allegations that the defendants (i) filed a materially false and misleading Form 10-K, (ii) did not obtain the auditors’ consent to file the Form 10-K, (iii) failed to maintain a reasonable system of internal controls, and (iv) violated the certification requirements of the Sarbanes-Oxley Act

Representation of former director and chair of the compensation committee of the board of a major telecommunications company in connection with investigations and inquiries by the SEC, the United States Attorney’s Office, and Congress regarding corporate governance issues and alleged federal securities law violations

Representation of an officer of a public company under investigation by the Atlanta Division of the SEC and the Department of Justice concerning alleged improper revenue accounting and questionable stock sales

Representation of Chief Financial Officer of Fortune 100 company in connection with investigation and inquiry by the SEC concerning a restatement of the company’s financial statements regarding revenue recognition and issues relating to reserves

Representation of accounting firm in proceedings and investigations commenced by the SEC and the AICPA relating to collapse of firm’s audit client (a government securities dealer) claiming, inter alia, violations of federal securities laws

Representation of auditors of Fortune 500 company in proceedings and investigations commenced by the SEC and other agencies (following the company’s bankruptcy filing) predicated on alleged deficiencies in its audits of the company’s financial statements, including revenue recognition and overstated inventory issues

Representation of accounting firm in defense of SEC and AICPA proceeding charging firm with deficiencies in its audit of public company, primarily in the area of revenue classification and the recording of complex real estate transactions

Representation of accounting firm in connection with SEC investigation relating to alleged financial statement improprieties

Representation of corporate officers and others in connection with SEC investigation relating to allegations of insider trading

Representation of investor relations firm in connection with SEC investigation regarding market manipulation

Representation of bank in connection with SEC investigation relating to insider trading

Representation of individual in connection with regulatory investigation relating to research analyst reports

Representation of investment advisory firm in connection with SEC investigation relating to possible wrongdoing of a portfolio manager

Representation of a public company in connection with an investigation by the Atlanta Division of the SEC into accounting issues related to the expensing of certain items

Representation of several officers of a public company that the SEC alleged violated the books and records and periodic reporting provisions of the Securities Exchange Act of 1934

Representation of an officer of a first-tier investment bank in connection with an SEC investigation involving the pricing of derivative securities (PAC 10s) for a mutual fund

Representation of the CEO of a public company in one of the first Internet disclosure cases brought by the SEC

Representation of clients in connection with investigation and proceedings commenced by the NASD and NYSE relating to mark-ups, market manipulations, research analyst reports, churning, and suitability

Representation of companies, individuals, and board committees in connection with various SEC investigations regarding alleged market manipulation, insider trading, and financial reporting improprieties

Representation of the family members of the CEO of a public company who were subpoenaed by the Atlanta Division of the SEC in connection with an insider trading investigation

Accountants’ Liability Litigation

Saxon Litigation

U.S. District Court for the Southern District of New York and New York, New Jersey, California, Maryland, and Florida State Courts

Representation of auditors of Saxon Industries in over 40 lawsuits (following the company’s bankruptcy filing) claiming violations of the federal securities laws and the common law (also represented auditors in proceedings and investigations commenced by the SEC and other agencies)

Employers Insurance of Wausau v. Musick, Peeler & Garrett

U.S. District Court for the Southern District of California

Defense of accounting firm J.H. Cohn & Company against contribution claim brought by insurance carriers in connection with the $13.5 million paid by the carriers to a plaintiff class in settlement of a securities class action

Richard W. Hill, Trustee v. Frederick S. Todman & Company


Defense of an auditor of brokerage firms against claim for $600,000,000 based upon alleged securities fraud, malpractice, negligent misrepresentation, and breach of contract, where plaintiffs alleged that audit derelictions enabled management of brokerage firm to divert to themselves customers’ funds and securities through the manipulation of repurchase and reverse repurchase transactions

Hudson v. Central Management International Inc.

U.S. District Court for the Northern District of California

Defense of an accounting firm against claims for violation of federal and state securities laws, common law fraud, negligent misrepresentation, and professional malpractice, which arose out of the sale of interests in 45 limited partnerships to more than 2,300 investors over a seven-year period

Boardwalk Associates v. National Westminster Bank, et al., v. Laventhol Horwath


Defense of accounting firm Laventhol & Horwath in suit alleging misrepresentations in financial statements of a limited partnership race horse syndication (audited by Laventhol) allegedly to induce third-party plaintiff to invest funds and guarantee a $10,000,000 bank loan

Miller Brewing Co. v. Eisner & Lubin, et al. v. The American Broadcasting Company

U.S. District Court for the Eastern District of Wisconsin

Representation of accounting firm Eisner & Lubin, the auditors for Robert Landau Associates (a public relations and promotional firm) against federal and state law claims arising from Eisner & Lubin’s preparation of a “comfort” letter that allegedly induced Miller Brewing Co. to advance $1.5 million to Landau for services which, on account of Landau’s bankruptcy, were never performed

The Giant Group v. Sands, et al.

U.S. District Court for the Southern District of New York and


Defense of accounting firm in federal and state fraud litigation based on plaintiff’s allegation that it acquired all of the outstanding shares of Periscope Sportswear for $30 million in reliance upon the company’s false financial statements and the accompanying auditors’ reports

ESM Litigation

U.S. District Courts for the Southern District of New York and the Southern District of Florida and Ohio State Court

Representation of Grant Thornton in over 25 lawsuits in New York, Florida, and Ohio brought by numerous municipalities, other public entities, and savings and loan associations for alleged damages aggregating over $300,000,000 arising from the collapse of Grant’s audit client, ESM Government Securities, Inc. (a Florida government securities dealer) claiming violations of federal securities laws and other federal and state laws (also represented Grant Thornton in proceedings and investigations commenced by the SEC and the AICPA)

Reliance Insurance Co., et al. v. Eisner & Lubin


Defense of defendant auditor Eisner & Lubin in complex securities case

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