Broker–Dealer and Securities Litigation -

Broker–Dealer and Securities Litigation

OUR PRACTICE

Sutherland’s broker-dealer and securities litigators regularly represent broker-dealers, insurance companies, investment advisers, banks, underwriters and other capital markets and financial services professionals in all types of securities disputes, from Financial Industry Regulatory Authority (FINRA) arbitrations to highly complex class actions and multidistrict litigation. We have experience with almost every securities product, investment strategy and securities-related legal claim. Our experience includes directly representing securities industry clients, as well as handling insured matters through errors and omissions policies. We have partners and associates who are admitted to practice in Florida and California, two states with significant limitations on pro hac admissions. We have represented clients in arbitrations and court cases throughout the country.

We have the tools to resolve these matters efficiently and cost effectively, and we have a keen understanding of the appropriate strategy to achieve the most favorable outcome, whether it be through litigation, mediation or settlement.

INDUSTRY KNOWLEDGE

At Sutherland, we combine the resources of our broker-dealer and securities litigation practice with those of our financial services, regulatory and enforcement practices. More than 130 of our approximately 425 lawyers firmwide regularly represent financial services firms and individuals in transactional, regulatory, enforcement or litigation matters. Our resources include former senior attorneys from the U.S. Securities and Exchange Commission (SEC), FINRA and the Department of Justice, as well as in-house counsel and seasoned lawyers who have years of experience in the representation of financial services providers.

BROKER-DEALER ARBITRATION

Sutherland has represented major brokerage firms, independent broker-dealers, insurance companies, banks, registered representatives and compliance professionals in hundreds of arbitrations. While the amounts at stake have ranged from relatively small sums of money to well over $50 million, we take each case seriously and strategize with our clients, based on their business needs, to determine the best way to handle each matter. We are frequently called upon to handle those cases that “must be tried.” In the past few years alone, our securities litigation group has tried more than 75 cases before FINRA arbitration panels across the country. We have handled arbitrations involving traditional products like stocks, bonds, listed options and mutual funds, as well as third-party managed products, derivatives, and hedging tools. Our attorneys have experience with virtually every legal theory and every sales practice claim asserted in customer cases, ranging from securities fraud and breach of fiduciary duty to unsuitability, “defective products,” over-concentration, churning, unauthorized trading, mutual fund switching, selling away, Internet abuses and failure to supervise, among others.

Highly publicized state or federal investigations sometimes prompt investors to flood FINRA Dispute Resolution with mass filings of similar claims. A vigorous and well-coordinated defense strategy is essential in these situations. For example, when various plaintiffs’ counsel filed hundreds of cases involving similar claims in the hope of extracting quick settlements from several brokerage firm clients, Sutherland developed and executed a successful nationwide strategy for defending these cases.

We make it a point to know as much as possible about the arbitrators before whom we appear. We maintain a sophisticated database that contains volumes of information about nearly 6,000 arbitrators from across the country.

SECURITIES LITIGATION, CLASS ACTIONS AND MULTIDISTRICT CASES

In addition to arbitrations, we bring the same exceptional depth of knowledge and experience to the courtroom. We have handled everything from interpleader and debtor-creditor matters to complex securities class actions. Our clients in these cases have included brokerage firms, investment advisers, insurance companies, asset managers, corporations, banks, individuals and others in the financial services industry.

The diverse backgrounds of our lawyers enable us to represent clients in the full range of matters arising under federal and state securities laws, corporate laws and ERISA, including:

Federal and state securities class actions
Fraud on the market cases
Credit market meltdown claims
Public offering litigation
Proxy litigation and contests for corporate control
Tender offer cases
ERISA and trust law claims
Auction rate securities litigation
Private placements
Asset-backed securities
Third-party product due diligence

Sutherland also works with other professionals to ensure that its representation is properly coordinated along with other concurrent private claims and regulatory or criminal investigations.

REPRESENTATIVE CASES HANDLED BY BROKER-DEALER AND SECURITIES LITIGATION TEAM*

Of the hundreds of broker-dealer and securities cases that our lawyers have handled in recent years, the handful highlighted below are representative of the breadth of our practice:

Auction Rate Securities Class Action – We recently successfully defended a bank in a class action filed by purchasers of auction rate securities and obtained a dismissal with prejudice of the action.
Arbitration National Counsel – We currently serve as national counsel for several brokerage firms that are defending against hundreds of common theme suitability, prospectus disclosure, and “defective product” cases concerning asset-backed securities and private placements, resulting in a substantial number of “zero” awards and voluntary dismissals.
Research Analyst Arbitrations – We defended a major wire house firm in hundreds of arbitrations alleging wrongdoing by research analysts, and took several dozen cases to final hearing.
Suitability – We have defended hundreds of suitability cases alleging that brokers ignored their firms’ asset-allocation models, over-concentrated investor accounts in risky securities, recommended higher cost B-share mutual funds or recommended other allegedly unsuitable securities.
Financial Planning Seminars/Retirees – We successfully defended a brokerage firm in a series of cases brought by retirees who attended seminars hosted by financial planners and financial advisers.
Failure to Register – Successful defense of numerous failure to register claims involving stocks and emerging market debt instruments.
Selling Away – We successfully defended broker-dealers in cases arising from the sale of non-approved products such as viaticals, promissory notes and limited partnership interests.
Precedent-Setting Derivatives Case – In a case filed against a bank, we prevailed in the federal district court, then obtained an important opinion from the U.S. Court of Appeals for the Sixth Circuit addressing the duties of marketers of derivative products.
Promissory Note Class Action – We successfully defended a class action brought on behalf of purchasers of promissory notes; all claims against the firm’s client were dismissed on summary judgment and affirmed.
Prospectus Fraud Class Actions – We obtained the dismissal of several separate class action cases involving allegations of material misrepresentations in prospectus and registration statements.
Stock Option Exercise Cases – We successfully defended several broker-dealers in numerous stock option exercise cases, including one in which the claimants alleged that their broker had recommended a strategy of exercising stock options on margin.

*Prior results do not guarantee a similar outcome