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securities & commodities: matters
Summary Professionals Matters News Events Publications
Asset Management Company - Employment Issues
Representation of one of leading independent asset management companies in its defense of a wrongful termination action claiming religious discrimination, and in a separate action claiming discrimination based on disability. We continue to represent the company in all aspects of its employment disputes, and in risk management issues.
Ongoing
Inter-Dealer Brokerage Firm - $500 Million Raiding Case
Representation of an 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) in one day after our client hired approximately 20 of its credit derivatives brokers and employees. After an intense oral argument by our firm and other firms aligned with our client in the spring of 2008, the New York Supreme Court denied a temporary restraining order. A few months later, the court denied a preliminary injunction.  Thus, the subject employees were permitted to work for our client.  The matter is now in arbitration where we are defending hundreds of millions of dollars in claims.
Ongoing
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.
Ongoing
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.
Ongoing
SEC Matter - Private Placement Fraud Investigation
Representation of members of the board of directors of a start-up company in an SEC investigation into potential civil securities fraud related to a private placement offering.
Ongoing
Brokerage Firms - Internal Investigations
Conducted numerous internal investigations for broker-dealers to identify fraud and wrongdoing and defend against criminal and regulatory enforcement actions.
2014
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.
2014
Agricultural Commodities Specialist - Restrictive Covenant Claims
Represented 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.
2014
Compliance Director - CFTC Investigation 
Represented a futures compliance director in connection with a CFTC investigation into exchange for related positions trades (EFRPs)
2014
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.
2014
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.
2013
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.
2013
Witness - SEC Action
Representation of a key witness in an SEC lawsuit charging kickbacks, failures to disclose and overvaluing of assets involving the owners of a registered investment adviser which claimed to have had over $130 million in assets under management.
2013
Broker-Dealer - Sales Practice Investigation by FINRA  
Successfully defended 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. 
2013
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. 
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.
2011
Brokerage Firm President - SEC Action
Representation of the former president and owner of a brokerage firm in post-trial proceedings following an SEC lawsuit involving the alleged employment of a barred person.
2011
Brokerage Firm - Customer Litigation
Representation of a leading independent broker in connection with a customer default on over-the-counter credit derivative swap transactions.
2010
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.
2010
Private Equity Fund - Clean Technology
Representation of principals in a $250 million Cayman Islands-based fund investing in SE Asian clean technology projects through a Netherlands-based investment vehicle to achieve optimum tax efficiency.  Investments will be conducted in concert with local governments and the World Bank.  Investors will be domiciled in Europe, Asia and the United States.
2010
Semiconductor Company - Capital Raise
Representation of a start-up semiconductor company in its private placement of up to $5 million of Class A common stock.
2010
Hedge Fund - Reverse Merger into Public Shell
Representation of domestic and Cayman Island-based hedge funds in their planned acquisition through reverse merger by an OTCBB-listed shell company.
2010
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.
2009
Commodity Futures Broker - SEC Investigation
Representation of 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. After we made a Wells submission, the SEC determined to close the investigation and not to pursue any enforcement action against our client.
2009
Rogue Employee - CFTC and CME Investigations
Conducted an internal investigation into massive trading losses incurred by a rogue employee of a futures commission merchant, and representing the FCM in connection with investigations into the conduct by the CFTC and CME.
2009
Broker-Dealer - Employment Contracts
Representation of a regional bank broker-dealer in preparing employment contracts to hire an account executive.
2009
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.
2009
National Retail Brokerage Firm - Civil Litigation
Representation of a national retail brokerage firm in a state court action alleging sales practice violations.
2009
Investor - SEC Investigation
Representation of an investor in multiple inquiries by governmental authorities in connection with alleged insider trading.
2009
Principal of Securities Brokerage - NASD Arbitration
Representation of the principal of a brokerage firm in an NASD customer arbitration for breach of contract.
Ongoing
Fund of Funds - Investment Litigation
Representation of a fund of funds in investment-related litigation.
2009
Trader - FINRA Investigation
Representation of a former trader at a national retail brokerage firm in a FINRA regulatory investigation into charges of front-running one of the firm's customers.
2009
Hedge Fund Collapse - SEC Investigation
Representation of the chief operating officer of a $1 billion hedge fund in connection with an SEC investigation into the fund's collapse and liquidation.
2008
Commodities Broker - Dismissal of Complaint
Representation of a leading futures commission merchant in an action brought by another FCM who accused our client of violating the Commodity Exchange Act, breach of contract and negligence in connection with futures and options trading in an omnibus clearing account.  After the Southern District of New York dismissed the complaint, we obtained a dismissal with prejudice of a new complaint filed in state court.
2008
Securities Broker - Summary Judgment
Representation of a broker-dealer and its employees in a "raiding" dispute brought by a rival broker-dealer, including claims of corporate espionage and theft of trade secrets.  After a number of the plaintiff's claims were dismissed at the pleading stage, we obtained summary judgment in favor of our clients and dismissal of the remaining causes of action.
2008
Futures Commission Merchant - CFTC Investigation
Representation of a futures commission merchant 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.
2008
Investor Group - Fraud and Misrepresentation Claims
Representation of an investor group in connection with fraud and misrepresentation claims against an investment manager in various private investments.
2008
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.
2008
Stock Brokers - FINRA Investigation
Representation of multiple stock brokers of a national retail brokerage firm in a FINRA investigation into various sales practice violations.
2008
Individuals - Insider Trading
Representation of two foreign citizens in connection with an SEC lawsuit alleging insider trading of a New York Stock Exchange listed security.
2008
Broker/Dealer - Non-Solicitation Dispute
Representation of a registered broker/dealer in defending an action for a temporary restraining order brought by a competitor seeking to restrain our client’s brokers from contacting their respective clients.
2008
Securities Finder - SEC Investigation
Representation of securities finder in a joint U.S. Attorney and SEC action alleging fraud in connection with securities lending.
2007
Securities Trader/Broker-Dealer - Investigations
Representation of the principal of a securities trader/broker-dealer in connection with investigations by the New York State Attorney General and the SEC into mutual fund trading practices including market timing and late trading.
2007
Futures Broker - CFTC Investigation
Representation of 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.
2007
Retail Brokerage - NASD Investigation
Representation of a retail broker of a national retail brokerage firm in a NASD investigation alleging numerous sales practice violations in connection with customer accounts. No charges were instituted after the filing of a Wells submission.
2007
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.
2007
National Retail Brokerage Firm - Arbitrations
Representation of a national retail brokerage firm and its employees in over 75 arbitrations alleging various sales practice violations.
2007
Senior Executive - U.S. Attorney/SEC Investigation
Representation of a senior executive of a national retail brokerage firm in a joint U.S. Attorney/SEC investigation relating to market timing activities. No charges were instituted against the executive.
2007
Money Center Bank - $75 Million Facility
Representation of a money center bank in a $75 million unsecured uncommitted credit facility to a clearing house operator for national and international broker-dealers.
2007
Retail Brokerage - NYSE Investigation
Representation of a national retail brokerage firm in claims brought by the Enforcement Division of the New York Stock Exchange relating to proxy procedures used on an industry-wide basis. The case was favorably resolved after discovery.
2007
National Retail Brokerage - NASD Arbitration
Representation of a national retail brokerage firm and its employee in an NASD customer arbitration alleging sales practice violations.
2007
Private Company Officers - SEC Investigation
Representation of officers of a non-public company in an SEC investigation of the company's unregistered offerings. The SEC alleged that the offerings violated various securities laws, but we convinced the SEC's New York Regional Staff to recommend that charges not be brought against these individuals.
2007
National Exchange Department Head - SEC Investigation
Representation of a department head of a national exchange's regulatory division in an SEC investigation into the exchange's failure to enforce its member surveillance program and filing false records with the SEC. The former department head received a cease-and-desist order with no monetary penalties assessed against him.
2007
Securities Broker - Termination Disclosure Inquiry
Representation of a securities broker in an NASD regulatory inquiry relating to his termination disclosure concerning alleged forgery of customer signatures on new account forms.
2007
Retail Brokerage - NASD Arbitration
Representation of a national retail brokerage firm in an NASD customer arbitration alleging sales practice violations.
2007
Commodities Broker - Dismissal of Class Action
Representation of a major commodities broker in a class action brought in a Florida state court.  The plaintiffs were investors in a foreign exchange hedge fund whose principal perpetrated a multi-million dollar fraud.  The investors alleged that our client, which executed trades on behalf of the fund, violated Florida blue sky laws and aided and abetted the fraud. After twice dismissing the complaint and granting plaintiffs leave to replead, the court finally dismissed all claims with prejudice and awarded our client its costs and attorneys' fees. The appellate court affirmed.
2007
Securities Broker - State Regulatory Proceeding
Representation of a securities broker in a regulatory proceeding brought by the New Jersey Bureau of Securities alleging unregistered and unauthorized transactions.
2007
Independent Broker-Dealer - State and NASD Litigation
Representation of a national independent broker-dealer in a New York State civil litigation and in a related NASD arbitration against former employees to recover fees and restitution payments made by the firm as a result of the misconduct of its former employees.
2007
Commodities Broker - Civil Litigation
Representation of a leading futures and options broker in a civil litigation stemming from a $200 million fraud perpetrated by a hedge fund manager.
2007
Financial Services Firm - FINRA Arbitration
Representation of a major financial services firm and one of its brokers in an arbitration brought by three customers seeking over $20 million in damages. Following 16 days of hearings before a FINRA panel, the customers received an award (less amounts awarded on our client’s counterclaim) of $28,430. The panel granted the broker’s request for an expungement of the matter from his CRD record.
2006
First Allied Securities - NASD Arbitration
Representation of First Allied Securities in an NASD arbitration in Seattle, Washington involving claims against a competitor for raiding an entire division of the company, including mutliple brokers in multiple offices.
2006
Pharmaceutical Company - Insider Trading Investigation
Representation of the senior management of a pharmaceutical company in an SEC insider trading investigation of a PIPE offering.
2006
Investment Advisor - SEC Investigation
Representation of an investment advisor in an SEC investigation of the "cherrypicking" of trades.
2006
Securities Brokers - Termination Litigation
Representation of brokers of a national retail brokerage firm in negotiating termination language on their form U-5s, in the subsequent NYSE regulatory inquiry into their terminations, and in making a written submission to recover allegedly forfeited deferred compensation.
2006
Securities Broker - FINRA Arbitration
Representation of a broker-dealer and its employees in a multi-million dollar FINRA arbitration brought by an introducing broker/investment advisor and his customers.
2006
Securities Broker - Forgery Investigation
Representation of a broker in an NYSE regulatory investigation alleging that the broker forged managerial signatures on new accounts forms and disposed of original employer documents. The broker received an admonition letter in lieu of an enforcement proceeding being brought against him.
2006
Brokerage Branch Manager - NASD Investigation
Representation of the branch manager of a regional brokerage firm in an NASD regulatory investigation into improper market timing activities that allegedly occurred in the branch office. No charges were brought against the branch manager.
2006
Securities Broker - NASD Regulatory Proceeding
Representation of a broker in an NASD regulatory proceeding alleging unsuitable and unauthorized transactions made in numerous clients' accounts.
2006
OTC Hedging Service - Market Formation
Representation of a hedging service for over-the-counter commodities in forming a unique credit-enhanced automated trading market in a joint venture with an affiliate of Bechtel Corporation.
2005
National Retail Brokerage - State Court/NASD Arbitration
Representation of a national retail brokerage firm in successfully seeking a TRO, permanent injunction and monetary damages in connection with raiding of employees by a competitor.
2005
Hedge Fund Managers - SEC Investigation
Representation of two hedge fund managers in an SEC investigation relating to market timing activities. No charges were instituted.
2005
Mutual Fund Company - NASD Arbitration
Representation of an international mutual fund company in a NASD arbitration brought by a senior officer seeking alleged wrongfully withheld compensation and bonuses.
2005
Employees - SEC Investigation
Representation of multiple employees from a public company in an SEC investigation alleging misstatements in the company’s public filings. No charges were instituted.
2005
Boards of Directors - Internal and SEC Insider Trading Investigations
Conducted an insider trading investigation on behalf of the boards of directors of two affiliated publicly owned computer software companies, and represented them in a related SEC investigation.
2004
Independent Directors - Internal Investigation
Representation of the independent directors of a public corporation in leading an investigation into shareholder derivative claims.