Securities

Stoll Keenon Ogden’s Business Litigation Practice includes attorneys with significant experience litigating securities related matters.  These attorneys together comprise the Securities Litigation Practice.  The litigation with which the Securities Litigation Practice is involved can be divided into two main categories: (1) disputes between securities offerors and offerees; (2) disputes between investment firms and their customers.

(1)  Disputes Between Offerors and Offerees

Business entities raise capital through private placement offerings.  Sometimes disputes arise between the seller and purchaser of the securities sold through such offerings.  SKO represents sellers or purchasers in such disputes.  Its attorneys are experienced in assessing at an early date the exposure of a seller and the potential value of a purchaser’s claim arising from a private placement offering.  SKO’s attorneys also have extensive experience in both federal and state courts litigating claims arising from private placement offerings brought under federal and state securities laws, and common law claims including fraud, breach of fiduciary duty and civil conspiracy.

Representative Litigation:  Recently, SKO represented the defendants in an action brought in a state court by a group of investors who had purchased shares in a private placement offering.  The defendants had also purchased shares, but the plaintiff investors saw the defendants’ deep pockets as the only possibility of recouping their investments.  In an effort to avoid the hurdles presented by the Private Securities Litigation Reform Act (PSLRA), the plaintiff investors alleged no federal or state securities law claims but instead alleged a claim under state law that the defendants had engaged in a civil conspiracy with the truly responsible parties.  In close consultation with the defendants, SKO aggressively prosecuted the litigation and ultimately forced the plaintiff investors to abandon their claims against the defendants in exchange for the defendants’ agreement not to pursue retaliatory claims against the plaintiff investors.  The defendants were particularly pleased with the result as other, similarly situated defendants had paid for releases of the plaintiff investors’ claims against them. 

(2)  Disputes Between Investment Firms and Clients
Investment firms and their customers sometimes have disagreements that they cannot resolve regarding the handling of the customer’s account.  SKO represents either investment firms and firm customers, including individuals, foundations and trust companies, with respect to such matters.  If a settlement cannot be reached, disputes between firms and their customers are routinely litigated through arbitration, rather than court proceedings.  SKO has significant experience in arbitration proceedings of such disputes in the forum provided by the Financial Industry Regulatory Authority (FINRA), and its predecessor, the National Association of Securities Dealers (NASD).  The claims litigated have included violations of FINRA and NASD rules regarding suitability, churning and failure to supervise, state common law claims of breach of fiduciary duty, fraud and conversion, and violations of federal and state securities laws.

Representative Litigation:  Recently, SKO represented a trust company appointed by a court as conservator for a wealthy individual of advanced years.  The individual’s assets had been transferred to another person utilizing the services and with the assistance of a broker and his firm.  In close consultation with the trust company, SKO pursued claims in a state court proceeding and a FINRA arbitration proceeding.  Ultimately, the individual’s assets (a multimillion dollar sum) were recovered and the broker permanently barred from the securities industry.