Representative Engagements

• ADT Corporation, a leading securities systems company, in the successful defense of a securities regulatory probe, securities class action and shareholder derivative actions challenging the company’s billion-dollar stock buyback from a corporate activist that occurred just before ADT announced a disappointing quarter, leading to a share price decline. Paul, Weiss obtained the dismissal of the derivative actions and securities class action, establishing the precedent that companies have broad authority to buy back their shares; the SEC concluded its investigation without taking action.
• American International Group (AIG) in the successful settlement of a securities class action and derivative lawsuits seeking over $20 billion in damages related to allegations of anticompetitive market division, accounting violations and stock price manipulation under a former AIG CEO.
• Alere, Inc., a global medical device and diagnostics company, in the ongoing defense of a securities class action alleging material misstatements and omissions regarding numerous aspects of the company’s business operations and financial statements. The court has dismissed all claims except those concerning the recall of a single diagnostic product, and dismissed all claims against one executive. Paul, Weiss also represented Alere in the successful settlement of a multi-billion dollar litigation stemming from Abbott Laboratories’ attempt to cancel its $5.3 billion acquisition of Alere.
• Bank of America (BofA) in the successful settlement of a securities class action alleging that BofA and its directors and officers made material misstatements and omissions when seeking shareholder approval for the company’s merger with Merrill Lynch in 2008. The suit was settled for less than 10 cents on the dollar.
• Citigroup in:
  • defeating two separate multibillion-dollar arbitral claims brought by the Abu Dhabi Investment Authority (ADIA) in connection with losses the sovereign wealth fund sustained in its $7.5 billion investment in Citigroup;
  • securing the dismissal of multiple multibillion-dollar ERISA “stock drop” actions, most recently in the dismissal, affirmed on appeal, of claims made by retirement plan participants alleging that the company should not have allowed them to invest in Citigroup stock from 2008 to 2009, when the value of their investments allegedly dropped by more than $1.5 billion;
  • numerous matters related to residential mortgage-backed securities arising out of the credit crisis, including federal and state regulatory investigations; securities litigation in federal and state courts across the country; breach of contract claims; and various out-of-court mediations. Of several dozen different investigations and lawsuits since 2010, almost all have been dismissed with prejudice or resolved consensually on favorable terms; and
  • arguably the most important regulatory appellate decision in the past decade, SEC v. Citigroup, which upheld the ability of corporations to resolve federal regulatory matters without having to admit liability.
• Dennis J. “Chip” Wilson, founder of lululemon athletica in the dismissal of a securities class action and derivative litigation alleging the company had omitted to disclose deficiencies in the company’s quality control procedures, and that Mr. Wilson had motive to conceal the product issues from investors because he profited by selling lululemon stock during the relevant period.
• Ericsson in securing the dismissal, affirmed on appeal, of a securities class action arising out of the company’s 2007 financial disclosures.
• Fitch Ratings Inc. and affiliates in the dismissal of securities fraud claims brought by various overseas funds alleging that Fitch, along with two rival ratings agencies, knowingly issued inaccurate ratings related to residential mortgage-backed securities and collateralized debt obligations secured by subprime mortgages, and fraudulently induced the plaintiff to buy and continue to hold the securities.
• HCP, Inc., a REIT invested primarily in real estate serving the healthcare industry, in an ongoing putative securities class action and derivative litigation alleging that HCP and its current and/or former directors failed to make sufficient disclosures about the company’s financial condition and portfolio.
• Imperial Sugar Company and its former executives in securing the dismissal of several derivative lawsuits and a federal securities class action alleging defendants made material misrepresentations about the company’s use of co-packers and its purchase of sugar from other refiners. Paul, Weiss also successfully represented Imperial Sugar’s board in connection with shareholder opposition to its merger with Louis Dreyfus Commodities.
• iStar Financial Inc. in securing the dismissal of a putative class action and derivative complaint, affirmed on appeal, alleging the company and its directors improperly modified financial awards to its senior management, breached fiduciary duty and wasted corporate assets.
• JPMorgan Chase & Co. in the litigation and settlement of a securities class action and several opt-out cases brought by investors in The Bear Stearns Companies Inc. who alleged that Bear Stearns’s public disclosures misrepresented the company’s financing, leverage, liquidity, capital, risk management and mortgage business prior to its near-collapse and subsequent acquisition by JPMorgan Chase in 2008.
• Outside Directors of JPMorgan Chase & Co. in the dismissal of a shareholder derivative lawsuit alleging our clients breached their fiduciary duties in connection with the bank’s prior relationship with former client Jeffrey Epstein.
• Kohlberg & Co., LLC and certain affiliates in securing the dismissal of a stockholder derivative action brought by a pension fund shareholder against home infusion services provider BioScrip, Inc., a company in which Kohlberg owned 26% of its shares, alleging that certain current and/or former directors and officers violated various federal and state laws in allegedly causing BioScrip to engage in a drug sales kickback scheme. Paul, Weiss also defeated an amended complaint made by the investor plaintiff, now on appeal.
• MagnaChip Semiconductor Corporation and two current and former outside directors in securing a favorable resolution of a consolidated securities class action alleging that the company issued false and misleading statements, failed to disclose the inadequacy of its internal controls and inflated its financial results. Paul, Weiss negotiated a settlement of the securities litigation for an amount equal to 7.1% of maximum estimated damages and without any admission of fault or wrongdoing, and of a parallel SEC investigation of certain financial restatements.
• Merck & Co.:
  • along with its former subsidiary Medco Health Solutions, Inc. and five of the company’s officers and directors in securing the dismissal with prejudice, affirmed on appeal, of a securities class action and derivative action alleging the misstatement of company revenues by billions of dollars;
  • in the successful resolution of SEC and DOJ investigations, class action and individual shareholder lawsuits arising from the sale, marketing and voluntary withdrawal of Vioxx. After four years, the SEC closed its investigation into the company’s public disclosures concerning the drug without taking any action. The DOJ investigation, class action and individual shareholder suits favorably settled thereafter; and
  • along with Schering-Plough and certain of the companies’ current or former directors and officers in several securities, derivative, ERISA and opt-out complaints arising out of Merck’s cholesterol-lowering drug Vytorin. Paul, Weiss settled the main action before trial and obtained dismissal of the securities fraud claims asserted in the opt-out cases.
• Morgan Stanley & Company in the ongoing defense of a consolidated multidistrict litigation alleging that the largest financial institutions were involved in bid-rigging auctions for U.S. Treasury securities. Paul, Weiss was tapped by all 26 defendants, each separately represented by a major law firm, to serve on the defense steering committee.
• Nicholas S. Schorsch, the founder and former CEO of American Realty Capital Properties (ARCP), in the partial dismissal of a class action and several opt-outs and derivative litigations alleging accounting errors in the company’s public reporting.
• Oaktree Capital Management in securing the dismissal, affirmed on appeal, of a putative class action and three derivative lawsuits arising out of the merger of Oceanbulk Carriers and Oaktree portfolio company, Star Bulk Carriers. Plaintiff F5 Capital was a minority shareholder in Star Bulk and asserted derivative claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty and corporate waste, as well as a class action claim for dilution.
• OnDeck Capital and its directors and officers in the successful defense of a securities class action in which the lead plaintiff voluntarily withdrew after a motion to dismiss was filed.
• Paramount Pictures Corporation in a major trial victory in an action brought by investors in a special purpose vehicle that in turn invested in a slate of Paramount films. The investors asserted that their investments were induced by a private placement memorandum containing allegedly false and misleading statements. They also asserted claims of federal securities fraud, common law fraud and unjust enrichment. At the close of plaintiffs’ case on liability, the court granted Paramount’s motion to dismiss, holding that plaintiffs had failed to prove liability.
• Steven A. Cohen and SAC Capital (now Point72 Asset Management) in criminal and regulatory proceedings and litigations arising out of claims of insider trading. Paul, Weiss negotiated a settlement of an SEC civil enforcement action based on alleged insider trading in Élan and Wyeth, ushered in the resolution of proceedings pertaining to the U.S. Attorney’s criminal indictment of four SAC entities for alleged money laundering, and navigated an SEC administrative proceeding against Cohen seeking to bar him from managing outside investors’ money on the basis that he failed to reasonably supervise certain SAC employees. Most recently, Paul, Weiss defended against putative class actions based on alleged insider trading in the securities of Élan and Wyeth, which resulted in the dismissal of civil RICO claims as well as the settlement of all remaining insider trading cases for 5-10% of potential damages.
• Teladoc Health, Inc. in the dismissal of a securities class action in New York federal court alleging that Teladoc made materially false and misleading statements concerning the integration process following its merger with Livongo Health.
• The former CEO and CFO of Triad Guaranty, Inc., a mortgage insurer now in bankruptcy, in securing the dismissal with prejudice of a securities class action alleging that the company and its officers concealed the risks associated with its principal line of business, understated its loss reserves and misreported its risk-to-capital ratio.
• Turquoise Hill Resources (TRQ), an international mining company, and certain of its officers and directors, in securing the dismissal of a putative securities class action regarding alleged misstatements made by TRQ about its financial performance as it related to a change in revenue recognition practices by a partially owned subsidiary.
• UBS AG as underwriter of $1.4 billion of certificates of participation issued by special purpose entities to defray municipal pension obligations in all matters arising out of the Detroit bankruptcy.
• Numerous syndicates of underwriters in Securities Act class actions arising out of public offerings of debt and equity, including, most recently:
  • seventeen financial institutions in the dismissal, on appeal, of all claims related to their role as initial purchasers of $15 billion of senior notes issued in Rule 144A private placements by Valeant Pharmaceuticals;
  • four underwriters led by HSBC and Citigroup in the dismissal, with prejudice, of a securities class action in connection with a stock offering by Horizon Pharma PLC;
  • sixteen underwriters , including Citi, Goldman Sachs, UBS, J.P. Morgan and Evercore, in a securities class action related to a secondary offering of common stock of an oil drilling company;
  • the underwriters, led by Citigroup and HSBC, in a securities class action related to a $609 million secondary offering of shares of Abengoa S.A.;
  • three underwriters, including Morgan Stanley, Goldman Sachs and Canaccord Genuity, in securities class actions stemming from GT Advanced Technologies Inc.’s secondary equity offering and concurrent senior convertible notes offering; and
  • 37 underwriters, led by Citigroup, Goldman Sachs, Morgan Stanley and Barclays in three pending securities class actions related to the initial public offering of stock by Ally Financial, Inc.