Finalist, Securities Litigation Department of the Year: Sullivan & Cromwell
Sullivan & Cromwell played a key role in many of the high-profile securities suits arising from the financial crisis.
With clients such as UBS AG, Goldman Sachs & Co., JPMorgan Chase & Co. and Bank of America Corporation, Sullivan & Cromwell has seen plenty of challenging cases arising from the 2008 financial crisis. "We've been at the center of the most important securities litigation for the last two years," says practice head Robert Giuffra Jr. The firm helped more than a dozen banks recover billions from MBIA Inc. when they sued over a restructuring that left the monoline insurer unable to pay out on their policies. (Morgan Stanley alone collected $1.1 billion.) And Sullivan & Cromwell's precedential win in Fait v. Regions Financial Corporation sets a high bar for securities cases brought over accounting statements that can be counted as opinion, such as loan loss reserves.
But clients outside the financial industry rely on S&C's securities litigation prowess, too. Oil giant BP plc turned to the firm to handle shareholder litigation after the Deepwater Horizon spill sent the company's stock price plummeting; S&C got billions of dollars worth of claims dismissed and defeated a motion for class certification. The firm also pushed $5 billion in shareholder claims against Porsche Automobil Holding SE out of state and federal courts in New York and sent them to Germany, where their prospects are far dimmer.
Biggest Win: UBS faced a massive securities class action after its mortgage-backed securities write-downs led to a $114 billion stock drop. Guiffra wielded the then-new U.S. Supreme Court decision in Morrison v. Australia National Bank, which bars suits in U.S. courts over shares purchased on foreign exchanges, to trim 90 percent of claims. He then convinced the court to dismiss the remaining claims with prejudice. (The plaintiffs' appeal is pending.)
Biggest Loss: In NECA-IBEW Health and Wealth Fund v. Goldman Sachs & Co., the U.S. Court of Appeals for the Second Circuit limited a key defense used by banks to trim MBS suits. The ruling broadens the ability of class representatives to sue over offerings in which they didn't invest if those additional securities are backed by mortgages from the same lender. Plaintiffs attorneys have used the ruling to resurrect big claims against Goldman and other banks.
Ongoing Cases: S&C is defending Goldman and three other banks in a tough fight against the Federal Housing Finance Agency over up to $200 billion in mortgage-backed securities sold to Freddie Mac and Fannie Mae. Last fall the firm helped JPMorgan exit the case with a $4 billion settlement.
What Clients Say: In difficult litigation over a financial restatement by VeriFone Systems Inc., S&C successfully extricated the company from a U.S. Securities and Exchange Commission investigation despite a Wells Notice for fraud charges—which were ultimately never filed. After an appeals court reinstated a shareholder class action, the firm achieved what VeriFone general counsel Albert Liu calls a satisfactory settlement. S&C lawyers are "business-minded and creative," he says.
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