Securities Litigation The experience and success of K&L Gates’ securities litigation practice spans the history of private securities class action litigation, dating from the successful representation of a national accounting firm in what is believed to have been the first Rule 10b-5 class action ever tried to a conclusion, down to current, cutting-edge investment company litigation.
The firm’s securities litigation team includes trial lawyers, former government prosecutors and regulators, and transactional securities lawyers, in 12 offices throughout the United States. The firm’s size and integrated approach to problem-solving enables K&L Gates to provide litigation coordination on a regional, national, or international scale as necessary. The firm’s offices in Asia and Europe provide support through their ability to serve foreign clients which have become entangled in securities litigation in the United States.
Transactional Litigation K&L Gates has significant experience litigating and advising on transactional litigation arising in connection with merger, stock purchase, asset purchase, and other corporate M&A-type transactions, in both the United States and abroad.
Our experience includes both pre-closing disputes, such as those involving whether “material adverse effect” or other closing conditions have been met, and post-closing disputes, such as claims under indemnity and “earn out” or “hold back” provisions in the transaction documents. The firm represents both buyers and sellers, and handles disputes involving claims for injunctive relief or specific performance, “break up” or termination fees, and other damages or relief. We also have handled securities law and common law fraud or misrepresentation claims made in connection with M&A transactions.
Class Action and Derivative Lawsuits K&L Gates regularly defends class and derivative actions brought under federal and state law for clients ranging from publicly held corporations, investment companies, and investment advisory firms, to underwriters, large and small brokerage firms, and venture capital firms, as well as the officers and directors of these organizations.
In addition to claims under the federal securities laws, K&L Gates litigators are experienced in the defense of cases that involve claims under other federal statutes, including the Foreign Corrupt Practices Act and the Racketeer Influenced and Corrupt Organizations Act. Increasingly, class actions that at one time might have been brought under federal law are being brought in state court as purported common law claims for negligence or breach of fiduciary duty. K&L Gates litigators have been at the forefront of developments in the law permitting the removal of such claims to federal court and the ultimate dismissal of these claims.
The firm’s securities class action representation focuses on the importance of pretrial motions, which frequently have proven successful in securing an early dismissal. When this is not possible, the K&L Gates team seeks to minimize the scope of litigation by vigorously opposing class certification and employing sophisticated damage analyses to limit potential exposure. The firm’s securities litigators also have employed alternative dispute resolution methods, including mediations and traditional settlement negotiations, to reach creative resolutions of securities class and derivative actions on terms favorable to our clients.
Individual Securities LawsuitsK&L Gates represents a broad range of clients in individual (non-class) actions involving alleged violations of the securities laws and other securities-related theories of liability. Individual securities lawsuits can provide plaintiffs with potent remedies while avoiding certain of the procedural requirements and restrictions applicable to class actions, and they create risks for defendants which differ from those associated with securities class actions. With our multi-office platform and focus on forum selection procedures, K&L Gates litigators work to secure the best available venue for the dispute. We then utilize our experience with local courts, relevant federal and state securities laws, and related common law theories to vigorously represent our clients’ interests.
Internal InvestigationsK&L Gates also undertakes internal investigations at the request of clients confronted with allegations of wrongdoing for the purpose of recommending corrective or other actions to boards of directors, assessing litigation risk, or addressing enforcement actions. These engagements have included service as independent counsel to Special Litigation Committees of boards of directors in connection with shareholder derivative complaints. Among the firm’s many investigative assignments, we have been retained as special counsel to a former chairman of the Securities and Exchange Commission in connection with his performance of an independent investigation of a mutual fund complex. One of our lawyers also was appointed by the Department of Justice as the Examiner of subprime lender New Century Financial Corporation, in connection with its bankruptcy proceedings. The K&L Gates team explored accounting and financial reporting irregularities and the potential use of post-petition cash collateral in the investigation. Law Enforcement Investigations In addition to the firm’s private securities litigation defense practice, K&L Gates has one of the largest groups of lawyers in the United States who regularly represent clients in government enforcement investigations and proceedings. More than two dozen of the firm’s lawyers have served on the staff of the Securities and Exchange Commission and many others have served in senior positions in state regulatory bodies, including state securities commissions. As a result, K&L Gates understands both federal and state securities regulators, their operations, and their decision-making processes.
We have litigated corporate control and stockholder disputes, such as those involving proxy contests, tender offers and poison pills, and so-called strike suits brought by dissatisfied stockholders. We advise board of director independent or special committees considering particular M&A transactions or other strategic options. K&L Gates also has been engaged on deal matters being litigated in the context of a bankruptcy proceeding, such as fraudulent conveyance claims following an LBO and claims arising out of M&A transactions preceding the bankruptcy.
The firm also counsels on deals in the absence of actual litigation, including during the negotiation, drafting, and post-signing/pre-closing phases, with a view to either avoiding litigation or better positioning clients for potential litigation. K&L Gates also undertakes pre-litigation investigations to advise clients as to claims or defenses that might arise in connection with a particular transaction.
We also have litigated or advised on specialized issues arising in connection with M&A transactions, including insurance, antitrust, employee stock ownership plan, and labor and employment-related issues. Similarly, the firm advises clients on Foreign Corrupt Practices Act issues that may arise in connection with M&A transactions.
Investment bank and hedge fund clients have retained our transactional litigators to monitor and analyze in real time high-profile transactional litigation proceedings that are important to the business interests of those clients.