In the aftermath of the financial crisis and the corporate scandals of recent years, securities class action litigation has become a prevailing issue for U.S. corporations. These lawsuits not only pose a significant financial risk to companies but also to their senior management and directors, who are often named as individual defendants.
Experience
Gibson Dunn has a remarkable track record of achieving favorable outcomes for their clients in major securities class actions. Some recent representations include:
Complete dismissal of securities fraud claims against Herbalife Ltd. and its CEO
The Central District of California dismissed the third amended complaint without leave to amend. The court found that plaintiffs failed to provide evidence of material misstatements or scienter in support of their allegations that the company lied about its compliance with anti-pyramid scheme laws. The court also determined that any misstatements were not material because Herbalife extensively warned investors that its multi-level marketing business model could potentially be challenged as a pyramid scheme. Additionally, the court firmly rejected the argument that the defendants acted with an intent to defraud Herbalife shareholders.
Complete dismissal of claims against Molycorp, Inc. and its senior executives
Plaintiffs alleged that the defendants made false and misleading statements regarding the progress of “Project Phoenix,” the amount of inventory, cost of sales, income tax benefit reported in Molycorp’s financial results, and the marketability of its cerium-based water filtration product known as “SorbX.” Based on Gibson Dunn’s compelling motion papers, the court ruled that plaintiffs failed to provide sufficient evidence of scienter regarding their allegations and that statements regarding SorbX were protected under the Private Securities Litigation Reform Act’s “safe harbor” provision.
Dismissal and Second Circuit affirmance of a securities fraud class action against UBS AG and its senior executives
The case arose from unauthorized trades by a UBS London employee that resulted in over $2 billion in losses. Plaintiffs alleged that statements by UBS and the individual defendants regarding the quality of the company’s risk management and controls were false or misleading. The Second Circuit affirmed the dismissal, stating that plaintiffs did not adequately plead scienter.
Complete dismissal of a securities class action against The Royal Bank of Scotland and other defendants in the New York State Supreme Court
The case alleged fraud and negligent misrepresentation in connection with the sale of residential mortgage-backed securities. The court agreed with Gibson Dunn’s argument that the complaint failed to show that the plaintiffs justifiably relied on the alleged misrepresentations.
Representation of a former executive of a major international insurer in a securities class action
The Southern District of New York preliminarily approved a proposed class settlement in which Gibson Dunn’s client would bear no responsibility for a financial contribution and have all claims against him released.
Successful dismissal of a high-profile class action against Microsoft and its senior management
The class action was filed following a $900 million accounting charge related to the company’s first-generation Surface RT tablet products. The court accepted all of Gibson Dunn’s arguments for dismissal, and the plaintiffs declined to amend their complaint, leading to the final judgment.
As you can see, Gibson Dunn has an established reputation for achieving favorable outcomes in securities class actions. Their expertise, experience, and track record of success make them a leading choice for clients dealing with securities litigation. Visit Garrity Traina to learn more about their services.