The Securities and Transactional Litigation Practice Group focuses on litigation under the federal and state securities laws and litigation arising out of mergers and acquisitions ("M&A"), other transactions and corporate governance matters. Our experience encompasses litigation relating to IPOs and other capital markets financings, public and private M&A deals, investment company activities, and state law corporate and fiduciary duty matters generally. With approximately 120 lawyers in 23 cities around the world, we are positioned at strategic intersections of the global economy and have a strong local presence in key commercial and financial centers. M&A and securities litigation is often multi-jurisdictional, and our multi-office platform and experience with forum-related litigation well equip us to handle such litigation efficiently and effectively.
We have received widespread recognition for the quality, depth and breadth of our practice. We were ranked 7th among the top ten firms in Securities Litigation by Law360 for 2015. We also have been recognized in BTI Consulting Group’s Litigation Outlook surveys as a “Powerhouse” firm in Class Action Litigation for 2014 and 2015, and as a “Powerhouse” and “Standout” firm in Securities & Finance Litigation for 2014 and 2015, respectively. We received “Tier 1” national practice rankings from the U.S. News & World Report-Best Lawyers® survey in “Litigation – Securities” for 2015, and in both “Litigation – Mergers and Acquisitions” and “Litigation – Securities” for 2014, 2013 and 2012.
We litigate both “public” disputes (shareholder class action and derivative cases) and “private” disputes (such as claims between buyers and sellers in M&A deals), and have litigated transactions valued at $1 billion or more. We have extensive experience litigating such disputes in the federal courts throughout the United States, as well as in state courts around the nation, including the Delaware Chancery Court, the Commercial Division of the New York Supreme Court in New York City, and specialized business courts in other states. Our practice group includes a former Attorney General of the United States, a former SEC Assistant General Counsel, former SEC Division of Enforcement attorneys, former Assistant United States Attorneys and District Attorneys, former Department of Justice attorneys and former state securities regulators.
To maximize the effectiveness of our representation, we work closely with and leverage our strong relationships with our colleagues in related practice areas of the Firm, such as Securities Regulation, Mergers & Acquisitions, Corporate Governance, Securities Enforcement, Capital Markets and Investment Management. K&L Gates was named the “Law Firm of the Year” for Securities Regulation for 2015 in the U.S. News & World Report-Best Lawyers® survey. In 2013, K&L Gates was named “Law Firm of the Year” by Mergers & Acquisitions magazine, as part of its annual M&A Mid-Market Awards. The U.S. News & World Report-Best Lawyers® survey singled us out as the national Corporate Governance “Law Firm of the Year” for 2012, and as the national “Law Firm of the Year” in Securities Regulation and Criminal Defense: White Collar in 2013. Our M&A, Capital Markets and Investment Management (Mutual Funds) practices are recognized by U.S. News & World Report-Best Lawyers® as “Tier 1” national practices, with our Investment Management group being one of the largest and most experienced in the United States and globally.
In those instances in which a case survives to reach the discovery phase, our lawyers have available the unmatched capabilities and technical expertise of our e-Discovery Analysis & Technology ("e-DAT") group, led by a team of trial lawyers who assist in the development of reasonable and responsible plans for responding to discovery requests, and who direct specially trained lawyers in document review prior to production. Our e-DAT group has been at the forefront of e-discovery for over a decade, delivering creative, efficient, and cost-effective e-discovery solutions, as well as litigation readiness services.
We regularly litigate disputes arising under the federal securities statutes, such as the Securities Act of 1933 and the Securities Exchange Act of 1934, as well as claims under state securities laws. The experience and success of our practice span the history of securities class action litigation, dating from the successful representation of a national accounting firm in what is believed to have been the first Rule 10b-5 class action ever tried to a conclusion down to current, cutting edge “clawback” litigation arising out of the activities of Bernard Madoff. We have had frequent success in obtaining the dismissal of putative class action complaints, defeating motions for class certification, and limiting the scope of alleged class periods. We also regularly work on behalf of our clients to resolve derivative and individual securities claims, regulatory matters, and compliance concerns.
Securities Class Action and Derivative Lawsuits Recent studies demonstrate that the number of securities class action cases has increased significantly over the last several years, including an increase in the number of cases asserting Rule 10b-5 claims. We regularly defend securities class actions and related derivative claims brought in federal and state courts throughout the United States. We have successfully defended clients ranging from publicly held corporations, investment companies, and investment advisory firms, to underwriters, large and small brokerage firms, stock exchanges, and venture capital firms, as well as the officers and directors of such organizations.
In addition to claims under the federal securities laws, cases sometimes also involve claims under other federal statutes, including the Foreign Corrupt Practices Act and the Racketeer Influenced and Corrupt Organizations Act. K&L Gates litigators are experienced in the defense of such claims.
K&L Gates litigators also have been at the forefront of developments in the law permitting the removal to federal court and the ultimate dismissal of class action claims that at one time might have been brought under the federal securities laws, but that increasingly are being brought in state court as purported state law claims.
Often, plaintiffs bring derivative claims for breach of fiduciary duty based on the same or similar events that are at issue in prior or contemporaneously filed securities class actions. We are experienced at defending such derivative claims, and we efficiently and effectively litigate and manage both the derivative claims and the related securities class actions, for example, by developing strategies to extinguish purported federal securities fraud claims that in reality are state law breach of fiduciary duty claims.
Our securities class action and derivative claim representations focus on the importance of pretrial motions, which frequently have proven successful in obtaining early case dismissal. When this is not possible, our team seeks to minimize the scope of litigation by vigorously opposing class certification. We also use alternative dispute resolution methods, including mediations and traditional settlement negotiations, to reach creative resolutions of securities class actions and derivative cases on terms favorable to our clients. Our litigators are prepared to take class action and derivative cases to trial when necessary or appropriate.
Private Securities LawsuitsPrivate parties often assert, on an individual and non-class basis, claims involving alleged violations of the securities laws and other securities-related theories of liability. For example, a party to an M&A deal or other transaction may assert a Rule 10b-5 claim against the counterparty. Individual securities lawsuits can provide plaintiffs with potent remedies while avoiding certain of the procedural requirements and restrictions applicable to class actions, and can create dangers for defendants which differ from those associated with securities class actions. We represent a broad range of clients in these types of individual securities actions, bringing to bear our experience with the securities laws generally and in related areas such as M&A litigation.
As with our securities class action and derivative claim representations, we focus on the importance of pretrial motions, which have frequently proven successful in securing early case dismissal, and when appropriate, we also use alternative dispute resolution methods to reach creative resolutions on terms favorable to our clients. Our litigators are prepared to take individual securities claims to trial when necessary or appropriate.
Investment Company LitigationWe represent registered investment companies, and their directors, trustees and investment advisers, in actions brought by fund shareholders either derivatively or as putative class actions. These have included, among others, claims for asserted breach of fiduciary duty in connection with market-timing activity, the alleged failure to pursue claims on behalf of funds, and the redemption of hundreds of millions of dollars in auction rate securities. We also are experienced in “excessive fee” litigation under Section 36(b) of the Investment Company Act of 1940, in which we have represented investment advisers as well as fund directors and trustees. In addition, we have served as counsel to special committees of fund boards charged with investigating and responding to shareholder demands. Enforcement Actions K&L Gates also has one of the largest and most geographically diverse Securities Enforcement practices of any law firm. That practice focuses on law enforcement and internal investigations and has been involved in virtually every significant enforcement initiative during the past 40 years. K&L Gates attorneys literally wrote the book on criminal and civil securities enforcement, titled The Securities Enforcement Manual, Second Edition, published in 2007 by the American Bar Association.
Shareholder Class Action and Derivative Litigation Challenging Public M&A Transactions Recent studies demonstrate that the number of shareholder suits challenging M&A deals involving a public company seller or target has jumped dramatically over the years, with well over 90 percent of such deals now generating shareholder suits, often in multiple jurisdictions. We routinely defend such suits, representing both targets and their boards of directors as well as acquirers, who increasingly find themselves joined as defendants under various legal theories. Public M&A transactions with a significant shareholder or controlling party are a particular target of shareholder suits, and we are experienced at handling such litigation. Our experience includes navigating the complexities of parallel shareholder litigation in multiple jurisdictions and handling motions for expedited discovery and preliminary injunction motions. We also advise and defend independent or special committees of directors in connection with shareholder class action and derivative suits challenging M&A transactions.
Pre-Closing Litigation Between Acquirer/Buyer and Target/Seller Pre-closing litigation between the buyer and seller in an M&A transaction has become more commonplace since the financial crisis of 2007-2008. For example, a buyer may refuse to close a transaction based on claims that “material adverse effect” or other closing conditions have not been met, and sellers may demand specific performance by the buyer of an agreement to merge or purchase. The parties also may dispute entitlement to “break up” or termination fees. Common law fraud or misrepresentation claims also are often made by buyers against sellers. We regularly handle these types of pre-closing suits.
Post-Closing Litigation Between Acquirer/Buyer and Target/Seller We also routinely handle the types of post-closing claims that frequently arise between the buyer and seller in an M&A deal, such as claims under indemnification, price adjustment, “earn out,” or “hold back” provisions in the transaction documents. These post-closing disputes also may involve issues regarding entitlement to funds held in an escrow account administered by a third-party escrow agent.
Corporate Governance and Control Disputes We advise and defend independent or special committees of directors considering particular M&A or other corporate transactions. We also have litigated and advised on various corporate governance and corporate control-related disputes, such as those involving proxy contests, tender offers and poison pills.
Investment Bank and Hedge Fund Representation The investment bank giving a fairness opinion to the target board of directors often must give a deposition and produce documents in shareholder litigation or appraisal proceedings. We represent investment banks in connection with such litigation matters.
In addition, hedge fund and investment bank clients have retained us to analyze in “real time” high-profile securities and transactional litigation proceedings that are important to the business interests of those clients.
Executive Compensation Derivative Litigation Reflecting the growing frequency of executive compensation and “say on pay”-related litigation, we have handled executive compensation-related derivative litigation on behalf of our clients and advised on “say on pay” disputes.