Matters

Public Company – SEC Investigation in Connection with IPO

Represented a publically traded computer software company in an SEC investigation into the company’s assets and the funds used to purchase shares in the company’s initial public offering.

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. 

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.

NYC Attorney – Successful Defense in $80 Million Securities Fraud Civil Action

Defense of a New York attorney in a civil securities fraud action seeking $80 million in damages and alleging our client and co-defendants participated in a broad-based conspiracy intended to deprive the plaintiff of its shares in a Chinese financial media company at artificially depressed prices in order to realize an unjust windfall for themselves. In response to our motion to dismiss, which included a request for sanctions against the plaintiff for naming our client, the plaintiff agreed to dismiss all claims against our client without any settlement payment.

Investors – Alleged Material Misrepresentations and Omissions

Representing multiple investors in litigation to recover over $18 million in monetary damages arising from the alleged material misrepresentations and omissions made in the Securities and Purchase Agreement through which our clients made a $30 million investment in a publicly traded oil and gas exploration company.

Regional CPA Firm – SEC and PCAOB Investigations into Improper Partner Rotations

Representation of regional certified public accountant in connection with SEC and PCAOB investigations into alleged improper partner rotation and related alleged accounting practice improprieties. Herrick was able to reach a settlement with regulators in which the client admitted no wrongdoing.

NYC Attorney – Joint US Attorney and SEC Investigations into Alleged Misappropriation of Funds and Market Manipulation

Represented a prominent former New York City attorney in a joint federal criminal investigation, conducted by the U.S. Attorney's Office, District of Columbia and the SEC, into alleged misappropriation of funds of a large foreign public company and market manipulation of the securities of several small U.S. public companies. Herrick was able to resolve the federal criminal charges against our client through a guilty plea to a single count of obstruction of justice, resulting in a far lower sentencing guidelines range than would have resulted had the client pled to multiple securities fraud charges, as the Department of Justice was initially contemplating. The client was sentenced to two years of probation, later reduced to one year. Notwithstanding the criminal charges involving the sale of securities, the SEC did not bring charges.

Multiple Claims Dismissed in Shareholder Derivative Litigation

Secured a ruling in Kings County Supreme Court on behalf of a garment manufacturer and certain affiliated individuals and entities that dismissed several causes of action in a purported shareholder derivative suit. Among the claims asserted was the allegation that a competing entity had been used by certain defendants to usurp business opportunities, and that ownership of a company facility had been fraudulently transferred to a charitable trust and foundation. The court granted our motion to dismiss the claim for a constructive trust over either the alleged competing entity or the foundation; an unjust enrichment claim against the charitable trust and foundation defendants; and a claim of rescission of the alleged fraudulent transfer of the facility, which the court found was time-barred.

Publicly Traded REIT – Credit Default Swap Default

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.

Investment Bank and FCM – CFTC Investigation

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.

SEC Administrative Proceeding

Represented the former chairman of the board of directors of a start-up sports and entertainment company, and a company consultant, in an SEC administrative proceeding alleging violations of the anti-fraud, control person, broker registration and securities registration provisions of the federal securities laws.

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.

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.

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.

Futures Commission Merchant Employee – ICE Investigation

Successfully defended an associated person of a futures commission merchant in an enforcement investigation commenced by the Intercontinental Exchange (ICE) alleging that the associated person had improper pre-trade communications, pre-hedged a position on behalf of the FCM and charged improper mark-ups in executing a futures trade in the sugar market.

Commodities Trader – Felony Charges over Alleged ‘Wash Trades’

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.

Compliance Director – CFTC Investigation

A futures compliance director in connection with a Commodity Futures Trading Commission investigation into exchange for related positions trades (EFRPs)

Agricultural Commodities Specialist – Restrictive Covenant Claims

A leading agricultural commodities specialist in recruiting and hiring an executive subject to a 12 month non-competition agreement from his former employer, a leading provider of over the counter derivatives products.

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.

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.

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.

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.

Private Equity Firm – Settlement with SEC – Alleged Violations of Broker-Dealer Registration Requirements

Herrick represented a prominent real estate private equity firm in a precedent-setting and favorable settlement with the Securities and Exchange Commission related to the use of a finder in raising capital and the application of broker-dealer registration requirements.

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 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.

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.

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.

Financial Advisory Group – FINRA Arbitration

Financial Advisory Group - FINRA Arbitration: Negotiated a favorable, but confidential, settlement on behalf of a premier wealth management group at a global financial services firm in FINRA arbitrations relating to disputes with their former employer.

Broker Dealer – SEC Investigation

Representation of a broker dealer in connection with an SEC insider trading investigation.

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 – Representation of Company and CEO Concerning Stock Transaction

Representation of a public company and its chief executive officer in a U.S. Securities and Exchange Commission investigation regarding the company's private offerings of its stock and its disclosures. The work entailed producing documents in response to SEC subpoenas and representing executives required to give testimony before the SEC.

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.

Former MF Global Officers – Regulatory Investigations and Civil Actions

Former MF Global officers in investigations conducted by the Department of Justice, the CFTC and the SEC as well as civil and class action lawsuits filed in the wake of the bankruptcy and collapse of the company. Among our many successes, Herrick secured the dismissal of the CEO who preceded Jon Corzine from the securities class action, and the dismissal of five officers and employees from the commodity class action.

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.

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.

Futures Commission Merchant – Internal Investigation

Conducted an internal investigation of a foreign exchange desk in Asia and advised on suspicious activity reporting requirements.

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 – 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.

Brokerage Firm – Restrictive Covenant Claims

A brokerage firm in enforcing common law and contractual obligations against a former employee who removed confidential and proprietary information from the firm.

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.

Futures Commission Merchant – Bankruptcy Trustee Claims

Two FCMs in defending 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.

Brokerage Firm – Former Employee Claims

An FCM in federal court defending against a broker's claims seeking to recover commissions and compensation arising from alleged breaches of an employment contract.

Global Financial Services Firm – FINRA Action

Defense of a premier global financial firm in a FINRA action involving claims brought by an investor for losses to retirement account resulting from alleged flawed asset allocation.

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.

Advertising Company – Securities Litigation

Representation of a public advertising company in defense of claims for violation of the federal securities laws.

Brokerage Firm – Defamation Litigation

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

Investment Advisor – Successful Conclusion to Internal Investigation

Conducted an internal investigation for a nationally recognized investment adviser to a series of hedge funds following a whistleblower's complaint concerning SEC compliance and operational issues. Upon submission of a report of our investigation, which determined that the whistleblower's allegations had no merit, the SEC never brought charges.