Matters

Securities Trader – Federal Criminal and SEC Civil Insider Trading Charges

Representing a securities trader in a Department of Justice criminal action and a related SEC civil action where our client is charged with participating in an insider trading scheme in which the securities of public companies were sold short in advance of secondary offerings, allegedly based upon material, non-public information.

Wealth Management Division – Closure of FINRA Sales Practice Investigation and Dismissal of Related Customer Arbitration

Successfully represented the wealth management division of a major international bank, obtaining the closure, with no further action, of a FINRA investigation into alleged sales practice violations and the dismissal of a related customer arbitration alleging unsuitable investments in structured products.

Inter-Dealer Brokerage Firm – $500 Million Raiding Case

Represented the affiliate of a billion-dollar inter-dealer brokerage firm in a large "key employee raiding case" brought by a competitor whose stock market valuation declined 24% (approximately $450 million) on the day following our client’s hire of approximately 20 of its credit derivatives brokers and employees. Following an intense oral argument by Herrick and other firms aligned with our client, a New York Supreme Court denied the plaintiff’s motion for a temporary restraining order and later denied a motion for preliminary injunction in rulings which allowed the subject employees to work for our client. The dispute then moved to a FINRA arbitration where we defended hundreds of millions of dollars in claims. After more than 240 hearing sessions, the matter was fully settled and all claims withdrawn.

Regional Securities Firm – FINRA Investigation

Representation of a regional securities firm in a FINRA investigation in connection with the firm’s hiring of a statutorily disqualified person.

Senior Investment Banker – SEC/FINRA Investigations

Representation of a senior investment banker in parallel SEC and FINRA investigations relating to allegations of fraud and misrepresentation in connection with the sale of private equity securities.

SEC Matter – Securities Fraud Allegations

Representation of a business executive in an SEC civil securities fraud matter alleging participation in a pump-and-dump scheme involving two penny stocks.

FINRA Investigation

Representation of an account executive in a FINRA investigation alleging sales practice violations, selling away and paying non-licensed persons transactional based compensation. 

FINRA Arbitration

Representation of a national broker dealer in an arbitration claiming fraud and misrepresentation in the sale of private placements.

Trust Litigation – Fraud/Breach Claims

Representing a New York limited partnership in litigation filed in federal court alleging fraud and dissipation of family trust assets against major offshore bank and international investment advisors.

FINRA Investigation – Failure to Supervise

Representation of a major broker dealer investigated by FINRA for failure to supervise brokers in connection with the sale of speculative securities.

Senior Broker – FINRA Investigation

Representation of a registered senior broker in a FINRA investigation into possible selling-away activities.

Madoff Litigation – SIPC Trustee Actions

Representation of Madoff victims named as defendants in actions filed by the SIPC Trustee to recover monies withdrawn from their Madoff securities accounts. Those actions, which are commonly referred to as "clawback" claims, are before the Bankruptcy Court for the Southern District of New York.

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.

Favorable Resolution in FINRA Arbitration Initiated by Former Managing Director

Herrick successfully defended a midmarket investment bank and brokerage in a FINRA arbitration initiated by a former Managing Director who alleged that our client had wrongly denied him commissions on deals in which he claimed to have been involved. The parties ultimately entered into binding mediation where virtually all claims against our client were dismissed and the matter was resolved with a minimal settlement that was a small fraction of the amount initially claimed.

Favorable Resolution Negotiated in FINRA Customer Arbitration Alleging Sales Practice Violations

Herrick successfully defended a leading investment banking and brokerage firm in a FINRA arbitration initiated by the beneficiary of an estate seeking to hold our client liable for the alleged misconduct of the estate's trustees, including alleged defalcation, in connection with significant losses incurred by a brokerage account opened on behalf of the estate. Herrick was able to negotiate an extremely favorable settlement involving no admissions of wrongdoing or further disciplinary actions by FINRA. 

FINRA Employment Arbitration

Representation of a broker-dealer in a complex employment arbitration brought by six former employees seeking over $10 Million in collective damages. This FINRA arbitration proceeded for 60 sessions, including 32 hearing days, and resulted in a virtually complete defense verdict for the firm, including for attorneys' fees. The award was confirmed in its entirety by the Southern District of New York.

FINRA Arbitration – Sexual Discrimination Claim

Representation of a regional broker dealer in a claim asserted by a former account executive alleging the firm had engaged in sexual discrimination and failed to pay certain bonuses and other compensation.

Business Executive – Parallel Criminal and Civil Insider Trading Investigations Settled Favorably

Herrick successfully represented a business executive in parallel criminal and civil insider trading investigations conducted by the U.S. Attorney's Office for the Eastern District of New York and the SEC, in connection with allegations that our client and four other defendants used illegal tips to trade in the stock of a company prior to it being taken private in a multibillion dollar deal. Herrick was able to resolve the SEC claims with a favorable settlement which involved no admission of wrongdoing, and obtained no prosecution with the U.S. Attorney's Office.

Employee Claim

Representation of a regional broker dealer in a claim asserted by a former research analyst alleging that the firm wrongfully withheld certain bonus and other transactional compensation. 

Philadelphia Stock Exchange and FINRA Investigation

Representation of a regional brokerage firm in a FINRA and Philadelphia Stock Exchange investigation into payment of transaction based compensation to unregistered persons in numerous violations of the just and equitable principles of trade.

Madoff Litigation – Filings Against the SEC

We represent a number of victims of Bernard Madoff's Ponzi scheme. In January of 2009, we filed notices of claim with the Securities & Exchange Commission alleging negligence under the Federal Tort Claims Act. The SEC rejected our claims six months later, and on Wednesday, October 14, 2009, we filed the historic and first known lawsuit against the SEC seeking monetary damages under the FTCA, Molchatsky and Schneider v. United States. We were lead counsel on the Molchatsky case and filed two additional cases against the United States on behalf of other Madoff victims. While the Second Circuit ultimately dismissed the action, essentially saying that the SEC had absolute immunity, the case sent a message that Herrick will leave no stone unturned on behalf of its clients. The firm continues to defend Madoff victims in clawback actions initiated against them by the Madoff bankruptcy trustee.

FINRA Investigation

Representation of a registered representative of a major broker dealer in a FINRA investigation into mismarking of trade tickets and unsuitable trading. After successfully filing a Wells submission, the matter was ultimately dropped and the client received no formal discipline.

Financial Service Firm – Insider Trading Investigation

Herrick successfully represented a financial services firm and key executives in a joint SEC and US Attorney's insider trading investigation related to the purchase of shares in multiple pharmaceutical companies prior to announcements of multibillion mergers. The investigation concluded with no action taken against our clients.

SEC Matter – CEO of Broker Dealer Investigated for Fraud

Representation of the Chief Executive Officer of a significant broker dealer in a U.S. Securities and Exchange Commission investigation regarding alleged misrepresentations in the offering of private placement interests, and responding to an SEC Wells Notice. The matter was ultimately favorably resolved.

Favorable Resolution to FINRA Customer Arbitration

Herrick successfully defended a regional broker dealer in a FINRA customer arbitration seeking both compensatory and punitive damages in connection with alleged fraud and misrepresentation related to the sale of publicly traded securities and private placements. We negotiated a settlement for a fraction of the initial claim, resolving the matter with no further disciplinary actions against our client.

Broker Dealer – Regulatory Investigation

Defended broker dealer in a FINRA regulatory investigation alleging that a former analyst made misrepresentations about high-growth securities in multiple firm research reports.

Investment Advisor – Successful Conclusion to SEC Investigation and Wells Notice Alleging Fraud Against Senior Executive – Stanford Ponzi Scheme

We represented a senior executive investment advisor formerly associated with the now infamous Stanford Financial Group in a Securities and Exchange Commission investigation. In 2011, the SEC issued a Wells Notice concerning our client's alleged fraudulent disclosures and affirmative misrepresentations in the sales of Stanford International Bank CDs, allegedly a massive Ponzi scheme. After making two submissions in response to the Wells Notice and an oral presentation to the staff at the SEC's Fort Worth office, we successfully persuaded the SEC to issue a no-action letter stating that it will not bring any charges against the client.

Regional Brokerage Firm – Investor Claims

Representation of a regional brokerage firm in multiple investor claims alleging fraud and misrepresentation in connection with a failed private placement.

SEC Matter – Insider Trading

Representation of a defendant charged with insider trading by the Securities Exchange Commission.

International Insurance Company – Breach of Contract

Representation of major international insurance company in breach of contract dispute.

Brokerage Firm – Defamation Litigation

Representation of a leading independent broker-dealer against claims of defamation and tortious interference asserted by a competitor firm.

Securities Brokers – State Insurance Department Investigation

Representation of more than 275 securities brokers of a number of national retail brokerage firms in proceedings before the NY State insurance department on issues concerning annuity exchanges. We were successful in convincing the department to drop approximately 90% of the cases with no formal action and received favorable settlements in the case of the other 10% of the advisor.

International Insurer – FINRA Arbitration

Representation of a major international insurer in a FINRA arbitration brought by a group of customers alleging improper selling- away by an account executive.

International Insurance Carrier – Indebtedness Recovery

Representation of international insurance carrier in its attempts to recover a two million dollar indebtedness from a former account executive.

Foreign Insurance Company – Wrongful Discharge Claim

Representation of a foreign insurance company in connection with the wrongful discharge claim from the managing directors of a U.S. subsidiary.

FINRA Investigation – Falsification of Records

Representation of four account executives in an FINRA investigation alleging the falsification of records during a raiding dispute.

FINRA Investigation – Gift and Gratuity

Representation of a senior trader in a FINRA investigation into the possible violation of FINRA gift and gratuity rules.

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.

Broker-Dealer – Employment Contracts

Representation of a regional bank broker-dealer in preparing employment contracts to hire an account executive.

Principal of Securities Brokerage – NASD Arbitration

Representation of the principal of a brokerage firm in an NASD customer arbitration for breach of contract.

Investor – SEC Investigation

Representation of an investor in multiple inquiries by governmental authorities in connection with alleged insider trading.

Individuals – Insider Trading

Representation of two foreign citizens in connection with an SEC lawsuit alleging insider trading of Dow Jones' stock.

Investment Banker – FINRA Proceeding

Representation of a former employee of a major investment bank in a FINRA regulatory proceeding on charges that he misappropriated funds from his employer by improperly submitting personal expenses as business-related expenses.

Investor Group – Fraud and Misrepresentation Claims

Represented an investor group in connection with fraud and misrepresentation claims against an investment manager in various private investments.

International Investigation – Market Manipulation

Representation of a foreign citizen in connection with an indictment by the U.S. Attorney’s Office and an SEC investigation alleging market manipulation of multiple OTC securities in the U.S. markets via the internet.

Stock Brokers – FINRA Investigation

Representation of multiple stock brokers of a national retail brokerage firm in a FINRA investigation into various sales practice violations.

Branch Manager – FINRA Investigation

Representation of the branch manager of a national retail brokerage firm in a FINRA investigation involving the failure to supervise in connection with a major defalcation from a customer account by an administrative employee.

Executive – SEC Investigation

Representation of an executive of a national retail brokerage firm in a joint U.S. Attorney and SEC action alleging fraud in connection with securities lending.

National Retail Brokerage Firm – Civil Litigation

Representation of a national retail brokerage firm in a state court action alleging sales practice violations.

Hedge Fund Managers – SEC Investigation

Representation of two hedge fund managers in an SEC investigation relating to market timing activities. No charges were instituted.