Finalist, Securities Litigation Department of the Year: Cravath, Swaine & Moore

Cravath's securities litigation group makes up in brains for what it lacks in size.

, The American Lawyer



Cravath, Swaine & Moore's small but tight-knit securities litigation practice was instrumental in wiping out many prominent shareholder claims stemming from the financial crisis over the last two years, often on precedential grounds.

In a case brought by the National Credit Union Administration Board against Credit Suisse Securities (USA) LLC—for whom Cravath handles all residential mortgage-backed securities litigation—the firm obtained a precedential decision on time-barred claims while reducing its client's exposure to less than half the case's original $715 million value. For JPMorgan Chase & Co., the firm reduced a $774 million case over its Bear Stearns acquisition to $5.7 million—though it was vacated after the case was remanded to state court on jurisdictional grounds—and obtained a $26 million settlement of $558 million in damage claims over its purchase of Washington Mutual Inc. The firm used a novel argument in a case for Vivendi S.A.—challenging the "fraud on the market" presumption of reliance in a $3.5 million suit filed by Gamco Global Series Funds Inc.

Cravath has also carved out unique niches representing accounting firms and resolving actions over mergers and acquisitions. For Deloitte & Touche LLP the firm obtained a $19.9 million settlement to resolve billions of dollars of alleged losses tied to the Bear Stearns collapse. On the merger front, Cravath fought off actions challenging Delphi Financial Group Inc.'s $2.7 billion sale to Tokio Marine Holdings Inc. and Barnes & Noble Inc.'s purchase of Barnes & Noble College Booksellers.

Biggest Win: Cravath stands out for its novel arguments. In litigation stemming from American International Group Inc.'s government bailout in 2008, the firm applied a newly minted decision from the U.S. Court of Appeals for the Second Circuit, Fait v. Regions Financial Corporation, to get Pricewaterhouse­Coopers LLP out of the case, the first time an auditor was dismissed on "subjective falsity" ground. Robert Baron, managing partner of the firm's litigation department, calls it a "blockbuster win."

Biggest Loss: In a trial against Liberty Media Corporation, Cravath lost a $956.6 million verdict for Vivendi Universal S.A. when a jury found that Vivendi had fraudulently inflated its stock price before buying USA Holdings Inc. in 2001. From the start, Cravath and cocounsel Weil, Gotshal & Manges faced a significant barrier: Jurors knew about a separate verdict in 2010 concluding that Vivendi had misled shareholders about its financial condition during that period.

Ongoing Cases: The firm is defending Credit Suisse in a pending $11.2 billion residential mortgage–backed securities case filed by the New York attorney general's office.

What Clients Say: Don Liu, general counsel of Xerox Corporation, praises the firm's aggressive approach in filing a summary judgment motion to toss the last of a series of shareholder suits filed against the company following alleged misrepresentations about a 1998 worldwide restructuring. Prior cases had settled. "It was a bold move," Liu says.

Practice Group Size and Revenue

Partners: 17

Associates: 50

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