Matters

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 represented the FCM in connection with investigations into the conduct by the CFTC and CME.

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.

National Retail Brokerage – State Court/NASD Arbitration

Represented a national retail brokerage firm in successfully seeking a TRO, permanent injunction and monetary damages in connection with raiding of employees by a competitor.

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.

National Retail Brokerage Firm – Arbitrations

Representation of a national retail brokerage firm and its employees in over 75 arbitrations alleging various sales practice violations.

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.

Broker-Dealer – Employment Contracts

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

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.

Securities Finder – SEC Investigation

Representation of securities finder in a joint U.S. Attorney and SEC action alleging fraud in connection with securities lending.

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.

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.

Hedge Fund Managers – SEC Investigation

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

National Retail Brokerage Firm – Civil Litigation

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

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.

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.

Stock Brokers – FINRA Investigation

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

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.

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.

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.

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.

Investor – SEC Investigation

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

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.

Asset Management Company – Employment Issues

Represented 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.

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.

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.

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.

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.

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.

Securities Brokerage Principal – NASD Arbitration

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

Securities Broker – NASD Regulatory Proceeding

Representation of a broker in an NASD administrative proceeding alleging unsuitable and unauthorized transactions made in numerous clients' accounts.

National Retail Brokerage – NASD Arbitration

Representation of a national retail brokerage firm and a number of individual employees in NASD customer arbitrations alleging sales practice violations.

Retail Brokerage – NASD Arbitration

Representation of a national retail brokerage firm in an NASD customer arbitration alleging sales practice violations.

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.

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.

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.

Broker/Dealer – Non-Solicitation Dispute

Represented 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.

Independent Directors – Internal Investigation

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

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.

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.

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.

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 multiple brokers in multiple offices.

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.

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.

Pharmaceutical Company – Insider Trading Investigation

Represented the senior management of a pharmaceutical company in an SEC insider trading investigation of a PIPE offering.

Commodities Broker – Civil Litigation

A leading futures and options broker in a civil litigation stemming from a $200 million fraud perpetrated by a hedge fund manager.

Retail Brokerage – Federal Investigation

Representation of a national retail brokerage firm in a joint U.S. Attorney/SEC investigation of illegal "frontrunning" trading activity.

Retail Brokerage Branch Manager – NASD Charges

Successful defense of a branch manager of a national retail brokerage firm. Following a hearing, the hearing panel dismissed all of the NASD's charges, including allegations of supervisory failures. The dismissal was upheld on appeal by the NASD to the NASD's National Adjudicatory Council.

Individuals – Insider Trading

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

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.

Multinational Financial Institution – Summary Judgment Dismissal in Securities Fraud Class Action

Successful defense of global bank in connection with a class action brought in the U.S. District Court for the Southern District of New York alleging violations under the 1934 Act and Rule 10b-5. Plaintiffs alleged that the bank knowingly engaged in a scheme with an Italian dairy conglomerate involving the securitization of worthless receivables in order to disguise that the transactions were really a loan meant to prop up the failing Italian company, which was not disclosed to investors. The Court determined that Plaintiffs’ claims against the bank failed because Plaintiffs could not establish that they relied upon the bank’s allegedly deceptive conduct, except in an indirect chain, the type of which the Supreme Court found too remote for liability. (Prior firm experience)