Practice Strengths

Baker Hostetler represents corporations and SEC-regulated entities, as well as their officers, directors and committees, that face complex securities litigation. We handle private securities-related litigation, shareholder class actions, derivative suits, shareholder and partnership disputes, as well as AAA and FINRA arbitrations. We have recently represented clients such as New York Life Insurance, Southwest Securities, Prudential Financial, Wells Fargo (f/k/a Wachovia Securities) and Matrix Financial Solutions.

Our lawyers achieve favorable results and settlements on securities matters involving fraud, insider trading, unauthorized and unsuitable trading, registration violations, breach of fiduciary duty and accounting irregularities. In addition to trial representation, we counsel clients through SRO examinations and investigations and those by the SEC, CFTC, U.S. Attorney's offices, state attorney generals and the various states' securities commissions.

Members of our Securities Litigation and Regulatory Enforcement Practice Team are working in the firm’s representation of the SIPA Trustee, Irving Picard, in the liquidation proceeding for Bernard L. Madoff Investment Securities LLC. This Ponzi scheme is the largest investor fraud case. Since December 2008, team members have been investigating the activities of the broker-dealer and investment adviser and, on behalf of the Trustee, have filed a number of lawsuits seeking to recapture “false profits” and other payments made to BLMIS insiders, favored clients and investment funds. These actions involve securities, bankruptcy, international law, corporate governance and investment management issues.

Our team also has first-hand knowledge of the securities enforcement process. The team includes a former Branch Chief and Senior Counsel with the SEC's Division of Enforcement, Regional Counsel with FINRA, Chief of the Securities Fraud Unit for the U.S. Attorney's office and the Deputy Chief of Investigations at the New York District Attorney's Office.

Members of our team have handled hundreds of securities regulatory investigations for issuers, broker-dealers, investment advisers, mutual funds, hedge funds and their officers and associated persons resulting in no formal public action by these agencies. We are regularly retained to conduct internal investigations of potential accounting fraud, SOX issues and other securities laws violations. In fact, former Congressman Michael G. Oxley, co-author of the Sarbanes-Oxley Act, is a member of our team.

Because of their broad experience, our lawyers have counseled market leaders when first response in high profile matters require sound judgment and quick actions. We know how to organize an effective team experienced to defend against public and regulatory pressure and the ensuing shareholder suits and governmental and quasi governmental investigations.

Our team has first-hand knowledge of the securities enforcement process at the highest levels.

Leadership in Action

Securities Litigation & Regulatory Enforcement: Defending the officers and directors of not-for-profit organization

Client: The officers and directors of a not-for-profit corporation

Type of Matter: Securities class action litigation

Our Client's Challenge: A class action claim was filed on behalf of all public holders of $52 million in bonds issued for the construction and equipping of a life-care facility.

The Goal: Refute the allegations that our client had violated the Securities Act of 1933, and achieve a settlement short of litigation.

Our Strategy:

Results: The case was settled favorably following four years of discovery involving more than 100 depositions, and the identification and computer control of more than one million documents.

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Securities Litigation & Regulatory Enforcement Experience

 

• Various class action defense of investment advisers, investment banks and key executives under the 1933, 1934 and 1940 Federal Securities Laws
• Class action and opt-out defense of a bar coding company and its CEO, CFO and Controller in accounting misstatement cases 
• Class action defense of the former General Counsel of a large commodity trading organization
• Derivative action defense of a former CFO in stock options backdating litigation
• SEC injunctive action defense of a foreign accounting firm involving alleged auditors’ misconduct
• SIPC litigation defense of a broker-dealer in a misappropriation case
• Representation of aggressive growth mutual fund companies under the 1940 Advisers Act before the SEC and in class action 
• Internal investigation of mutual fund company and banks relating to Ponzi scheme involving Martin Frankel
• Representation of Navy contractor management before Philadelphia federal district court and Third Circuit appeal, successfully dismissing federal fraud claims involving a triangular merger
• Representation of broker's assistant who lied to government in the ImClone/Martha Stewart investigation, resulting in no federal felony charges or jail time, and related class-action
• Successfully defended nationwide broker-dealer concerning private placements of securities in federal and state court litigation arising under federal and Texas securities laws
• Representation of hedge fund in connection with investigations related to late trading and market timing allegations before the SEC, CFTC and Boston U.S. Attorney's Office, and related class actions
• Defended health care distribution conglomerate against derivative and class action claims that company and its directors had violated their fiduciary duties and the federal securities laws through alleged managed earnings fraud
• Appointed by five separate broker-dealers to serve as their Third Party Examiner as the result of different FINRA settled proceedings concerning the broker-dealers’ sale of certain mutual fund classes to customers
• Representation of NYSE floor brokers in SEC comment letters and litigation arising from proposed Hybrid Market and Archipelago merger, resulting in favorable modifications to trading protocol on the Exchange floor
• Successfully defended commodities futures broker charged by the CFTC with market manipulation and false reporting in feeder cattle futures, resulting in decision for the defendant after a 2-week trial
• Class action defense of Bank in connection with alleged employee malfeasance
• Defense of Senior Portfolio and Risk Manager at Freddie Mac involving “swaptions” in three-year SEC investigation (D.C.), successfully convincing staff to drop charges
• Representation of Midwest broker-dealer in alleged affinity fraud Ponzi scheme of $170 million in church bond offerings before the SEC and FINRA (Chicago) avoiding any criminal liability 
• Representation of Managing Director of French Bank U.S. subsidy responsible for proprietary trading in internal investigation of PIPEs transactions
• Successful representation of public manufacturing concern in three-year SEC investigation (Chicago) involving alleged violations of SOX 404 (internal controls), Reg FD and stock manipulation, resulting in no charges against the client

About Baker Hostetler's Litigation Team

When the stakes are bet-the-company monetary damages, potential criminal sentences and intense scrutiny in the court of public opinion, the more than 325 litigators of Baker Hostetler are a team to depend on. We have the kind of credentials you expect from a leading national litigation firm and a client base we have protected in and out of court for decades.

What really sets us apart is our practical experience as trial lawyers. The Baker Hostetler team includes former top prosecutors of the U.S. Justice Department (four of whom received the Attorney General's Distinguished Services Award), former prosecutors for major municipalities, veteran civil trial attorneys and enforcement officials from various federal agencies, from the Department of Energy to the SEC and NASD (now FINRA).