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. In the criminal case, our client recently received a sentence of Probation.

Multiple Hedge Funds – Federal Investigations

Represented several multi-billion dollar hedge funds in parallel SEC and US Attorney investigations. In many instances, no action or minimal sanctions were achieved.

Financial Professionals – FINRA Expungement Proceedings

Representing multiple clients in FINRA proceedings to expunge reportable events from the Central Registration Depository

Broker – FINRA Investigation

Represented a terminated broker in a FINRA investigation related to discretionary trading, and a negotiated departure from his firm.

Financial Consultant – FINRA Arbitration

Representing a senior financial consultant in a FINRA arbitration where certain employees alleged that the firm and the consultant constructively terminated them.

Broker – FINRA Investigation

Successfully represented a broker in a FINRA investigation into selling away activities; FINRA closed the investigation with no action taken.

Reserve Primary Fund Investor – Recovery of $150 Million Investment

Represented an investor in seeking the recovery of a $150 million investment in the Reserve Primary Fund, a $62 billion mutual fund that was the first to “break the buck,” or fall below the $1 NAV requirement for mutual funds, due to its large holding in Lehman Brothers, which filed for Chapter 11 bankruptcy protection during the height of the 2008 financial crisis.  Our client ultimately recovered approximately 98% of its investment. 

Telecommunications CEO – Dismissal of Securities Class Action

Represented the former CEO of a public telecommunications company in two securities fraud class actions stemming from the company's bankruptcy. 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, and we were able to obtain a settlement of the entire matter on terms that were very favorable to our client.

Hedge Fund Manager – No Action Letter in SEC Insider Trading Investigation

Successfully represented a hedge fund manager and his fund in an SEC insider trading investigation involving a US-based, multinational technology company and the alleged intentional manipulation of securities prices through the creation and spreading of false information.  The investigation concluded with the issuance of a no-action letter from the SEC. 

Financial Advisor – FINRA Customer Claim Investigation

Represented a veteran financial advisor in a FINRA investigation into customer claims that the client recommended unsuitable investments and maintained an overly concentrated account resulting in millions of dollars in damages.  FINRA closed the investigation with no action taken against our client. 

Stock Promoter – Department of Justice and SEC Investigations

Representing a stock promoter in wide-ranging investigations by the Department of Justice and the SEC of securities fraud in the promotion and potential manipulation of the stocks of various start-up companies. 

Investment Advisor – Department of Justice, SEC Investigations, and 9 State Attorney General Investigations

Represented an SEC registered investment advisor to several private equity funds with over $1.0 billion in assets under management, in connection with investigations of alleged securities law violations by the DOJ, the SEC and state securities regulators.

Registered Investment Advisory Firm – SEC Investigation

Represented Registered Investment Advisory Firm in SEC investigation into allegations of fraudulent misallocation of trades, also known as “cherry-picking.”  Following year-long representation, including document production and on-the-record testimony, the SEC determined to close the matter with no action taken against the client.

Key Figure in “Varsity Blues” Case

Represented key figure in the Government’s investigation of and prosecutions in the college admissions scandal known as the “Varsity Blues” case.

Australian Public Company – Misrepresentation Against U.S. Financial Institution

Achieved significant settlement on behalf of the former Chief Executive Officer of an Australian public company alleged of misrepresentation against a U.S. financial institution in connection with the sale of securities in certain securitized loans.

Asia-based Investors – Favorable Settlement in Insider Trading Case

Represented two Asia-based investors indicted and sued in insider trading cases. Succeeded in preventing extradition and having all SEC and criminal charges dropped in a very favorable settlement for our client.

Institutional Trader – Asset Recovery

Representation of institutional trader who was victimized in a Ponzi Scheme in order to recover assets that were defalcated.

International Broker Dealer – DOJ and SEC Investigations, Federal Trial

Represents major international broker dealer in connection with DOJ and SEC investigations, and federal criminal trial against founder of publicly traded company for, inter alia, creating false earnings to inflate the price of the company’s stock.

Public Company – Investigation of Potential Illegal Short Selling

Retained by public company to investigate potential illegal short selling of company's stock. 

Activist Investor – SEC Insider Trading Investigation

Successfully defended a principal of a prominent activist fund in an insider trading investigation conducted by the SEC.

Broker-Dealer – FINRA Arbitration

Represent an investment bank and broker dealer in a FINRA arbitration alleging the wrongful withholding.

Senior Trader – FINRA Investigation

Represent a senior trader of a financial institution in a FINRA investigation alleging market manipulation.

Executive – Internal Investigation

Represent the CEO of a wealth management firm in an internal investigation into selling away and improperly executing client documentation.

Broker – FINRA Investigation

Represent a broker in a FINRA investigation into improperly soliciting investments away from the firm.

Executive – Fraud Action

Represent a prominent foreign investor in an affirmative fraud action against an alternative energy broker and a related law firm.

Hotelier and Restaurant Developer – SEC Receivership Clawback Litigation

Secured an extremely favorable settlement on behalf of a prominent national hotelier and restaurant developer in connection with an aggressively litigated action commenced by an SEC appointed receiver in the United States District Court for the District of New Jersey.

Broker and Wealth Manager – Criminal and Regulatory Fraud Investigation

Defend a broker and registered wealth manager in parallel fraud investigations conducted by the U.S. Attorney’s Office for the District of Connecticut, the SEC and FINRA.

Broker-Dealer – FINRA Arbitration

Represent the U.S. Broker-Dealer division of an Israeli bank in a FINRA industry arbitration.

$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.

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.

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. 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.

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.

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. 

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, defeated the plaintiff's multiple post-trial motions, and successfully defended those decisions before the New York State Appellate Division, Second Department which unanimously affirmed.

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.

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.

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.

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.

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.

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.

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.

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.

Broker-Dealer – FINRA Employment Arbitration

Represented 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.

Investors – Resolution of Fraud and Breach of Contract Claims

Represented a group of investors against foreign international bank alleging fraud and failure to detect that the approved money managers were engaging in a Ponzi scheme. Negotiated a favorable settlement involving the payment of significant monetary damages on behalf of a New York limited partnership to resolve allegations of fraud and dissipation of family trust assets against a 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.

Broker Dealer – SEC & U.S. Attorney Investigation

Represented a broker dealer and proprietary trading firm in connection with an SEC insider trading investigation. Succeeded in having no actions brought by either arm of the government.

Senior Investment Banker – SEC/FINRA Investigations

Represent 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 – 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.

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.