$650,000+ FINRA Arbitration Award

Secured an FINRA arbitration award of more than $650,000 on behalf of a retail brokerage against the firm’s former clearing house, which was alleged to have unlawfully refused to release the client’s funds. Herrick successfully argued that the termination provision in the standard clearing agreement functioned as a penalty rather than as liquidated damages, and therefore could not be enforced. The FINRA panel also required the clearing house to deliver over 10,000 shares of a NASDAQ traded biotechnology company to our client while dismissing the respondent’s counterclaim.

$141 Million Rogue Trader Insurance Coverage Dispute

Representing an FCM in ongoing litigation with insurers over their refusal to honor claims arising from $141 million in losses caused by a rogue employee’s unlawful and unauthorized trades. Recent victories include a ruling by the Special Referee, upheld by the court, which required the consortium of insurers to turn over hundreds of pages of documents they had sought to shield under the attorney/client privilege.

Investment Bank and FCM – CFTC Investigation

Representing a prominent investment bank and futures commission merchant in an investigation by the division of enforcement of the Commodity Futures Trading Commission regarding the purported failure to properly report certain swap data to the firm's designated swap data repository.

Broker-Dealer – Sales Practice Investigation by FINRA

Successfully negotiated a favorable settlement on behalf of a broker-dealer in a sales practice investigation initiated by FINRA concerning allegations that the firm made false and/or misleading representations to customers in connection with the sale of certain mortgage backed securities.

Specialty Finance Company – Summary Judgment Upheld on Appeal

Herrick secured an appellate win for a specialty finance company, successfully defending the trial court's decision granting our motion for summary judgment and awarding money damages with costs. The underlying dispute involved a borrower’s failure to pay a multi-million dollar participatory interest - a percentage of the collateral’s appreciation - in addition to a fixed interest monthly payment under the terms of a $16 million credit arrangement to finance the purchase of taxi medallions. The Appellate Division, First Department affirmed the trial court’s decision, rejecting the borrower’s counterclaims that the participatory interest provision to which it had agreed violated New York law and the federal Small Business Investment Act of 1958.

Favorable Settlement Resolving FINRA Investigation into Self-Raise Through Debt Instruments

Herrick successfully defended a public company, its broker-dealer affiliate and the principal of each, negotiating a favorable settlement that resolved a nearly three-year long FINRA investigation into allegedly false and misleading debt instruments used to raise money for the broker-dealer that did not adequately disclose certain material information, including the use of the raised funds.

CME “Spoofing” Investigation Closed with No Action Taken

Represented a hedge fund trader targeted in a CME investigation into alleged “spoofing,” or the entering of bids with the intent to cancel before execution, a practice made illegal under the Dodd-Frank Act, and one which has come under increased scrutiny under new CME anti-disruptive trading rules. Working with a massive volume of electronic trades, Herrick successfully guided the client through the investigation which was ultimately closed by the CME with no action taken.

Investment Advisor – Litigation Related to Failed Merger and $700 Million in Asset Losses

Represented a registered investment advisor, its managers and the RIA's proprietary funds in a series of four consolidated securities class actions lawsuits, two concurrent state court actions, and a Bermuda and SDNY bankruptcy, involving more than $700 million in claims arising out of a failed merger between the funds and a public shell company.

New York Court of Appeals Victory for Capital One N.A.

Won an important victory before the New York Court of Appeals on behalf of a major national bank regarding the shortening of the limitations period contained in New York’s UCC 4-406 which governs a bank customer's duty to discover and report unauthorized signatures or alterations. In a significant decision for the banking industry, the Court of Appeals held that two financially sophisticated parties can modify UCC 4-406’s statutory one-year period for reporting unauthorized activity to 14 days, the time frame provided for in the bank documents between the parties. Herrick represented Capital One through every stage of the dispute, obtaining dismissal of the customer’s complaint at the trial court which awarded summary judgment to Capital One on all of its counterclaims.

Taxicab Management Company – Breach of Contract AAA Arbitration

Successfully arbitrated breach of contract claim on behalf of one of the largest taxicab management companies in New York City against a former client who breached seventeen taxi medallion management contracts.

International Arbitration – Business Dispute

Successfully represented an individual before the International Centre for Dispute Resolution (the international arm of the American Arbitration Association) in a dispute over the ownership and control of several companies whose operations span three continents. We negotiated a favorable settlement of our client's outstanding monetary obligations coupled with the sale of our client's interest in several businesses resulting in net payments to our client.

Broker-Dealer and Its Principal – FINRA Disciplinary Hearing

Represented an embattled broker-dealer and its founder in a 12-day disciplinary hearing initiated by FINRA alleging multiple counts of fraud, failure to supervise and general violations of FINRA rules.

Taxi Medallion Financing Company – $27.5 Million Judgment

Represented a large specialty financing company in enforcing a series of agreements that provided the company with an interest in the appreciation of the underlying collateral. Following extensive briefing on a summary judgment motion, the court rejected defenses based on usury and the Small Business Investment Act and issued a $27.5 million judgment in favor of our client.

Publicly Traded REIT – Credit Default Swap Default

Defense of a publicly traded hospitality REIT against allegations by its counterparty, a large multi-national investment bank, that two of our client's funds defaulted on their obligations under a $1.2 billion credit default swap.

Successful Resolution to FINRA Selling Away Investigation

Successfully represented a registered representative of a broker dealer against allegations of selling away (FINRA Rule 3040) in an investigation initiated by FINRA. The registered representative concluded the matter with a letter of caution.

DataTreasury Corp. – $100 Million Dispute with Former COO

Successful defense of DataTreasury Corp. in a 41-day bench trial arising from claims by the company's former Chief Operating Officer that he was entitled to exercise certain stock options granted to him during his tenure. We helped obtain a decision dismissing all of the former executive's claims based on his disloyal conduct in trying to usurp business opportunities coupled with his failure to properly exercise the options, and defeated the plaintiff's multiple post-trial motions.

Futures Commission Merchant – Bankruptcy Trustee Claims

Defense of two FCMs  against fraudulent transfer claims asserted by a Bankruptcy Trustee seeking to recover funds deposited into trading accounts of the debtor, which ran a Ponzi scheme.

Regional Bank – Litigation Related to Failed Acquisition

Successfully prosecuted a multi-million dollar claim on behalf of a large regional bank stemming from a failed acquisition of the bank. We were able to bring the matter to a swift conclusion through a dispositive motion after minimal discovery and cost.

Commodities Trader – Felony Charges over Alleged ‘Wash Trades’

Successfully represented a veteran commodities trader against potential federal felony charges related to alleged “wash trades” executed on behalf of a customer suspected of having ties to Russian organized crime. Obtained a non-prosecution agreement with the U.S. Attorney’s Office for the Eastern District of New York.

Futures Commission Merchant – Bankruptcy Trustee Claims

An FCM defending against a Bankruptcy Trustee's allegations that funds transferred to the debtor's trading account were fraudulent transfers and, although largely lost in futures trading, should be returned to the estate by the FCM.

Futures Commission Merchant – NYMEX Arbitration

Obtained a complete defense award in favor of an executing FCM in a NYMEX arbitration which involved allegations that a guaranteed floor broker violated exchange rules resulting in substantial trading losses and other consequential damages.

NYSE Company – Internal Investigation

Representation of the Audit Committee of a New York Stock Exchange listed company to conduct an internal investigation of whistleblower claims brought by a former officer alleging that certain officers and directors had committed accounting fraud and violated the Sarbanes-Oxley Act.

Futures Commission Merchant – Software License Dispute

A futures commission merchant in an arbitration brought by a software developer to recover fees allegedly owed for the use of a platform to support OTC brokers in the fixed income and derivative markets.

Futures Commission Merchant – Commodities Fraud Claims

Obtained the dismissal with prejudice of federal and state court complaints asserted against an FCM by investors in a commodity pool who alleged that the FCM aided and abetted a Ponzi scheme perpetrated by the pool operator.

Futures Commission Merchant – CME and CFTC Investigation

An FCM in an investigation by the CFTC and the CME in connection with futures trading by a customer in violation of capital and trading limits, implicating pre-trade and post-trade risk management.

Commodity Futures Broker – SEC Investigation

Successfully represented a commodity futures broker in an SEC investigation into allegations that the broker participated in a Ponzi scheme fraud perpetrated by a hedge fund manager. Following our Wells submission, the SEC determined not to pursue any enforcement action against our client and closed the investigation.

Real Estate Company – Management Agreement Litigation

Representation of a real estate services company in a $20 million lawsuit brought by former customers. The former customers, owners of two large NYC office buildings, claimed that our client, which managed the buildings, had committed numerous acts of wrongdoing over several years, including breaching the contracts, fraud, and breaching fiduciary duties. The customers sought to recover all the fees they’d paid our client over the years under New York’s “faithless servant” doctrine. The District Court granted our summary judgment motion, dismissing all of the higher-damage tort and equity claims, and we then settled the remaining breach of contract claim. The former customers lost their appeal to the Second Circuit Court of Appeals, bringing the case to a successful conclusion for our client.

Futures Commission Merchant – CFTC Investigation

A futures commission merchant in defending against potential claims by a hedge fund receiver whose manager committed fraud. We defended the FCM in an investigation by the CFTC, which asserted no charges.

Futures Broker – CFTC Investigation

A futures commission merchant in a CFTC investigation arising from a $200 million fraud perpetrated by a hedge fund manager and commodity pool operator who hid trading losses.

Retail Brokerage – NASD Arbitration

Representation of a national retail brokerage firm in an NASD customer arbitration alleging sales practice violations.