Financial Services Litigation & Investigations Group
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In the face of turmoil and uncertainty, the world's major financial institutions continue to choose our team to help them manage their business, litigation and reputational risks and thrive in the new economic and regulatory climate. To our clients we are much more than litigators - we are business partners who have a stake in their success.
Paul, Weiss lawyers have represented leading financial companies in groundbreaking disputes in every forum. Our client work has included:
- Banc One in the successful resolution of class action and derivative lawsuits filed around the U.S. alleging market timing and late trading arising out of investigations conducted by the SEC and the New York State Attorney General.
- Bank of America (BofA) in the successful settlement of a securities class action alleging that BofA and its directors and officers made material misstatements and omissions when seeking shareholder approval for the company’s merger with Merrill Lynch in 2008. The suit was settled for less than 10 cents on the dollar.
- The Bank of New York Mellon in securing the dismissal of a high-stakes investor class action filed in the wake of a pyramid scheme involving purported cryptocurrency OneCoin.
- Citigroup in major litigation and regulatory enforcement matters, including:
- defense of a consolidated multidistrict litigation alleging that Citigroup and various other banks conspired in a group boycott to reduce competition in interest-rate swap trading, effectively raising prices for purchasers of the swaps; and parallel regulatory investigations;
- a complete victory in a multibillion dollar lawsuit brought by the London-based private equity firm Terra Firma. Terra Firma, and its Chairman Guy Hands, claimed they were defrauded in connection with the purchase of the music company EMI in 2007. Terra Firma asserted claims totaling $8 billion, one of the largest claims ever made against Citigroup. Paul, Weiss prepared the case for trial in just 10 months and tried it before a New York jury. The jury deliberated for less than five hours before returning a verdict vindicating Citigroup in all respects;
- a complete defense win in a $30 billion claim against Citigroup brought by Parmalat, and a $364.2 million jury verdict, upheld on appeal, on Citigroup’s counterclaims against Parmalat, culminating in a judgment by Italy’s Supreme Court finding our verdict, by then tripled in value, final and enforceable in Italy;
- a complete defense win in an arbitral panel ruling, subsequently upheld by a federal district and an appellate court, in a $7.5 billion ICDR arbitration brought by the Abu Dhabi Investment Authority (ADIA);
- numerous matters related to residential mortgage-backed securities arising out of the credit crisis, including federal and state regulatory investigations; securities litigation in federal and state courts across the country; breach of contract claims; and various out-of-court mediations. Of several dozen different investigations and lawsuits since 2010, almost all have been dismissed with prejudice or resolved consensually on favorable terms;
- the dismissal of a qui tam action brought in Florida state court under the Florida False Claims Act in connection with two synthetic fixed-rate transactions with a notional value of $1 billion entered into by the Central Florida Expressway Authority with Citibank and several other banks;
- a multi-year federal grand jury investigation of its compliance with BSA/AML requirements that resulted in a non-prosecution agreement and a significantly reduced penalty;
- the dismissal of multiple multibillion-dollar ERISA “stock drop” actions, most recently in the dismissal, affirmed on appeal, of claims made by retirement plan participants alleging that the company should not have allowed them to invest in Citigroup stock from 2008 to 2009, when the value of their investments allegedly dropped by more than $1.5 billion; and
- arguably the most important regulatory appellate decision in the past decade, SEC v. Citigroup, which upheld the ability of corporations to resolve federal regulatory matters without having to admit liability.
- A Special Committee of the Board of Directors of Credit Suisse in an internal review of Credit Suisse’s relationship with hedge fund Archegos Capital and the events leading to losses incurred by the bank as a result of Archegos’s default, culminating in the release of a 165-page report detailing observations and recommendations for remedial measures.
- Deutsche Bank in:
- the global resolution of a multi-year investigation by the IRS and DOJ into the execution of tax shelter transactions for high net-worth individuals. The investigation concluded when Deutsche Bank and the government agencies signed a settlement for $533 million, a fraction of the sums at issue and considerably less than the government originally demanded. The settlement included a non-prosecution agreement such that no criminal charges will be filed;
- multi-regulator, multi-jurisdictional inquiries concerning the setting of numerous Interbank Offered Rates (IBORs) — the largest investigations ever faced by the bank — and in 50-plus individual and class actions concerning IBOR rates in multiple currencies. Paul, Weiss negotiated coordinated resolutions of the investigations with U.S. and UK authorities, secured the dismissal of numerous private claims and negotiated resolutions in four major class actions; and
- an industry-wide investigation by the U.S. Commodity Futures Trading Commission into alleged manipulation of a global benchmark for U.S. Dollar swap rates and swap spreads and in related civil litigation. Deutsche Bank secured a favorable settlement.
- Goldman Sachs Group in securing a 8-1 victory at the U.S. Supreme Court in connection with a $13 billion private securities action in which plaintiffs alleged that Goldman Sachs violated securities laws by making a series of generic and aspirational statements, such as “our clients’ interests come first,” which impacted Goldman Sachs’s stock price. The decision may have significant implications for plaintiffs’ ability to achieve class certification in putative securities class actions.
- JPMorgan Chase & Co. in
- the litigation and settlement of a securities class action and several opt-out cases brought by investors in The Bear Stearns Companies Inc. who alleged that Bear Stearns’s public disclosures misrepresented the company’s financing, leverage, liquidity, capital, risk management and mortgage business prior to its near-collapse and subsequent acquisition by JPMorgan Chase in 2008; and
- the favorable resolution of a multi-year investigation conducted by various authorities, including the DOJ and SEC, into whether hiring practices in Asia complied with anti-corruption laws.
- The outside directors of JPMorgan Chase in the dismissal of a shareholder derivative lawsuit stemming from the bank’s 2020 resolutions with various regulators over various financial “spoofing” trading violations.
- Mastercard in three of the largest antitrust litigations pending nationally, including litigation challenges, and a subsequent settlement, of payment card “interchange” fees and certain rules governing merchants’ acceptance of payment cards; antitrust and consumer protection class actions on behalf of independent ATM operators and consumer groups challenging Mastercard’s ATM access fee non-discrimination rule; and an antitrust and consumer protection class action on behalf of merchants who incurred “chargebacks” for payment card fraud.
- Morgan Stanley in securing the dismissal of multiple high-stakes class actions, including:
- a class action alleging that several financial institutions that participate in the auction and trading of securities issued by the U.S. Treasury had conspired to reduce competition in the secondary market for Treasury securities, and colluded to block the emergence of new trading platforms through which better prices could ostensibly have been obtained for Treasury securities; and
- a putative antitrust class action brought by traders of odd-lot bonds—groups of bonds that are worth less than $1 million—alleging that 10 financial institution defendants were engaged in a conspiracy to increase prices on odd-lot bond trades by group boycotting certain odd-lot e-trading platforms.
- Nomura Securities International, Inc. and Nomura Holdings, Inc. in:
- the dismissal, along with other joint defense firms, of a consolidated class action alleging that Nomura and other major global financial institutions conspired to manipulate prices in the multitrillion-dollar global market for supranational, sub-sovereign and agency (SSA) bonds; and
- a putative antitrust class action alleging that the defendant banks participated in an anticompetitive conspiracy to purchase European government bonds in the primary market and sell them at fixed prices in a secondary market.
- UBS AG in its settlement with the Antitrust Division of the DOJ, the SEC, the Internal Revenue Service and a group of 25 state attorneys general of investigations into the firm's former municipal reinvestment and derivatives group.
- Virtu Financial, a leading high-frequency trading firm, in the successful resolution of a preliminary injunction brought under Section 202 of the Delaware Corporation Law challenging Virtu’s $1.4 billion acquisition of Knight Capital Group. Paul, Weiss subsequently negotiated the favorable settlement of a stockholder class action in the Delaware Court of Chancery alleging breach of fiduciary duty and disclosure-related claims concerning the same transaction.