Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Citigroup Wins Dismissal of Auction Rate Securities Suit
- Client News
- August 24, 2016
Justice Jeffrey K. Oing of the New York Supreme Court issued an
order dismissing on statute of limitations grounds claims brought
by All Children's Hospital (ACH) against Paul, Weiss client
Citigroup Global Markets Inc. (CGMI). CGMI served as the
underwriter and broker-dealer for $92.2 million of auction rate
securities (ARS) that ACH issued in September 2007, and Citibank.
N.A. served as counterparty for a related interest rate swap. ACH
asserted four causes of action, each of which arose out of the same
general theory of liability: that CGMI misled ACH about the risks
of ARS and CGMI's role in the ARS market. In his ruling,
Justice Oing held that New York's borrowing statute mandated the
application of Florida's statute of limitations (ACH is located in
St. Petersburg, Florida), and that under those statutes of
limitations all of ACH's claims were time-barred.
Prior to filing its summons and complaint in New York Supreme
Court in December 2014, ACH had sought to bring the same claims in
arbitration before the Financial Industry Regulatory Authority.
CGMI, represented by Paul, Weiss, successfully moved to enjoin the
arbitration based on a forum selection clause in the broker-dealer
agreement between the parties, and ACH voluntarily dismissed its
appeal of the injunction after CGMI won a favorable ruling from the
Second Circuit in a related appeal argued by litigation partner
Audra Soloway.
The Paul, Weiss team includes litigation partners Andrew
Ehrlich, who argued the motion to dismiss, and Audra
Soloway.