Brokerage Firms – Internal Investigations

Representing broker-dealers in numerous internal investigations to identify fraud and wrongdoing and defend against criminal and regulatory enforcement actions.

$141 Million Rogue Trader Insurance Coverage Dispute

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.

Private Equity Firm – Breach of Contract Claims

A global life sciences private equity fund, several related entities and individual defendants in a federal lawsuit brought by a former general counsel and partner alleging breaches of certain partnership and employment agreements.

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.

Global Commodities Trading Firm – NFA Arbitration

One of the world’s largest commodities trading houses in a National Futures Association arbitration initiated by a customer’s claims of fraud and millions of dollars in trading losses arising from the alleged malfunctions of a front-end trading platform.

CME “Spoofing” Investigation Closed with No Action Taken

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.

Futures Commission Merchant – NFA Arbitration

Successful defense of an FCM and associated persons in an NFA arbitration brought by a customer alleging that trading losses resulted from the alleged improper conduct of various associated person. Obtained a confirmation of the arbitration award in favor of our clients.

Executive – Restrictive Covenant Claims

An executive against claims by his former employer, a multinational technology and consulting corporation, seeking to enforce a 12-month non-competition agreement following our client’s resignation to pursue a position with a competitor. After three weeks of intensive expedited discovery, and in the midst of an evidentiary hearing on a motion for a preliminary injunction, the parties were able to reach a confidential settlement that allowed the client to join his new employer within 40 days of the suit's filing.

Private Bank – Restrictive Covenant Claims

An international private bank in obtaining a temporary restraining order and preliminary injunction enforcing non-competition and non-solicitation restrictive covenants against a team of private bankers, responsible for $4 billion in assets, who breached obligations when they resigned en masse to join a competing bank. Following an evidentiary hearing, the court fully enforced the restrictive covenants and enjoined the defendants until the expiration of the non-competition and non-solicitation periods.

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.

Compliance Director – CFTC Investigation

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

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.

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.

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.

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.

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.

Brokerage Firm – Customer Litigation

A leading independent broker in connection with a customer default on over-the-counter credit derivative swap transactions.

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.

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.

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.

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 – Internal Investigation

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

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

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.

Commodities Broker – Dismissal of Complaint

A leading futures commission merchant in defending claims 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.

Securities Broker – Summary Judgment in Raiding Dispute

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.

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.

Securities Trader/Broker-Dealer – Investigations

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.

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.

Former CEO – SEC Investigation

The former CEO of a major fiber optic company in an SEC investigation of accounting irregularities. After a grueling deposition and an in-depth Wells Submission, the SEC determined not to pursue any action against our client.

Commodities Broker – Dismissal of Class Action

A major commodities broker in a class action brought in 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.

Securities Broker – FINRA Arbitration

A broker-dealer and its employees in a multi-million dollar FINRA arbitration brought by an introducing broker/investment advisor and his customers. The customers suffered losses in clearing accounts when their short positions became over-leveraged and they failed to meet margin calls, prompting their investment advisor to liquidate their positions. An arbitration panel in Denver rejected the claimants' attempt to blame our clients for the losses, dismissed all of the claims, ordered the expungement of the matter from the FINRA registration records, and awarded $500,000 in damages to our client. A federal district court denied the claimants' motion to vacate the award and confirmed it in all respects.

Corporate Director – Dismissal of Securities Class Action Complaint

The former CEO of a publicly owned telecommunications company in two securities fraud class actions stemming from the company's bankruptcy in the wake of the dot-com bubble burst. The first complaint alleged fraud in connection with disclosures about the company's credit facility. The plaintiffs then filed a second class action alleging that our client engaged in accounting improprieties and caused the company to issue false financial statements. The court granted our motion to dismiss the second complaint on the grounds that plaintiffs were on inquiry notice of a potential fraud long before they asserted their claims, and dismissed the action as barred by the statute of limitations. We were able to obtain a settlement of the entire matter on terms that were very favorable to our client.

Independent Directors – Internal Investigation

The independent directors of a public corporation in conducting an internal investigation into shareholder derivative claims.