G&E regularly serves as lead counsel in national securities class actions, working closely with institutional investors as lead plaintiffs. G&E has filed individual actions for those clients whose losses are sufficient to justify an individual opt-out action, and successfully negotiated settlements that are exponentially higher than what the clients would have received in the class action. In both class actions and in litigation on behalf of individual investor clients, G&E has achieved notable results. Below is a representative sampling of the Firm’s U.S. securities litigation cases:

  • Company
  • Description
  • Recovery Amount
  • CellStar
  • Gluck, et al v. CellStar Corporation, et al.
  • $14.6 million

 

Northern District of Texas

In one of the earliest cases filed after the enactment of the Private Securities Litigation Reform Act (“PSLRA”), a large public pension fund was designated lead plaintiff and G&E was appointed lead counsel in an opinion that is widely considered the landmark on standards applicable to the lead plaintiff/lead counsel practice under the PSLRA. (See, especially, In re Cendant Corp. Litigation, 2001 WL 980469, at *40, *43 (3d Cir. Aug. 28, 2001), citing CellStar.) After the CellStar defendants’ motion to dismiss failed and a round of discovery was completed, the parties negotiated a $14.6 million settlement, coupled with undertakings on CellStar’s part for significant corporate governance changes. With the plaintiff’s active lead in the case, the class recovery, gross before fees and expenses, was approximated to be 56% of the class’s actual loss claims, about 4 times the historical 14% average gross recovery in securities fraud litigation. Because of the competitive process that the lead plaintiff undertook in the selection of counsel, resulting in a contingent fee percentage significantly less than the average 31% seen historically, the net recovery to the class after all claims were submitted came to almost 50% of actual losses, or almost 5 times the average net recovery.

 

  • DaimlerChrysler
  • In re DaimlerChrysler AG Securities Litigation
  • $300 million

 

District of Delaware

G&E represented a public pension fund as lead plaintiff in this action on behalf of former Chrysler shareholders who exchanged their shares for stock in the new DaimlerChrysler AG, formed in the so-called “merger of equals” between Chrysler and Daimler-Benz. The class claimed that the defendants concealed their true intent to acquire Chrysler as a mere division of Daimler, depriving former Chrysler stockholders of a fair acquisition premium for their shares. Shortly before trial, the defendants agreed to settle the case for $300 million in cash, among the largest securities class action settlements since the enactment of the Private Securities Litigation Reform Act. Shareholders who opted out of the class settlement and later proceeded to trial had their claims rejected by the court.

 

  • Delphi Corporation
  • In re Delphi Corp Securities Litigation
  • $325 million

 

Eastern District of Michigan

G&E represented an international pension fund as lead plaintiff in a consolidated class action against Delphi Corp. Defendants included Delphi directors and officers in addition to the company’s accounting firm, Deloitte & Touche. The resulting settlement agreements totaled more than $325 million and included $204 million from Delphi Corp., $80 million from Delphi’s directors and officers’ insurance, and $38 million from Deloitte & Touche, highlighting the importance of holding gatekeepers accountable to investors.

 

  • Dollar General
  • In re Dollar General Securities Litigation
  • $172.5 million

 

Middle District of Tennessee

G&E was co-lead counsel in the consolidated federal securities class actions arising out of Dollar General’s material misstatement of several years of financial statements due to improper accounting practices. The actions settled for a total of $172.5 million in cash, at that time one of the top ten securities class action settlements in history, plus significant corporate governance changes.

 

  • General Motors (securities)
  • In re General Motors Corp. Securities and Derivative Litigation
  • $303 million

 

Eastern District of Michigan

G&E represented an institutional investor in a securities class action against General Motors (“GM”) and its auditor, Deloitte & Touche LLP, alleging misleading financial reports dating back to 2000. In 2005, investors filed securities class actions in federal court in New York and derivative actions in federal court in Detroit. G&E’s international clients were appointed co-lead plaintiffs in the case, which was consolidated in the U.S. District Court for the Eastern District of Michigan. After about two and a half years of litigation, a settlement was reached with GM for $277 million, and with Deloitte & Touche for an additional $26 million. The combined $303 million settlement ranked among the largest shareholder recoveries of 2008.

 

  • Global Crossing
  • In re Global Crossing Ltd. Securities Litigation
  • $448 million

 

Southern District of New York

G&E represented two public pension funds as lead plaintiffs in a securities fraud class action against Global Crossing, Ltd. involving the failed business plan of the telecom company and the eventual swapping of telecom capacity with other telecom companies. G&E obtained various partial settlements in the case, totaling $448 million. These included a settlement with Global Crossing’s former officer and directors – including its former Chairman and founder, Gary Winnick, from whom G&E obtained a personal contribution of $30 million. G&E also obtained settlements with Global Crossing’s former auditor, Arthur Andersen LLP, former outside counsel, and a number of investment banks that underwrote public offerings during the class period.

 

  • JPMorgan
  • In re JPMorgan Chase & Co. Securities Litigation
  • $150 million

 

Southern District of New York

G&E represented the co-lead plaintiff in pursuing securities fraud claims under Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, against J.P. Morgan Chase & Co. (“JPM”) and certain senior executives of JPM in the very high profile “London Whale” proprietary trading scandal that roiled the credit markets and caused JPM shareholders to suffer more than a billion dollars in damages. In issuing its decision denying defendant’s motion to dismiss, the Court reasoned that plaintiffs had adequately alleged that materially false and misleading statements were issued by JPM, its CEO (Jamie Dimon) and its CFO (Douglas Braunstein).  In December 2015, just months after the Court granted in full the plaintiffs’ motion class certification, lead plaintiffs reached a settlement calling for an immediate $150 million cash payment.

  • Marsh & McLennan
  • In re Marsh & McLennan Securities Litigation
  • $400 million

 

Southern District of New York

G&E represented public pension funds as lead plaintiffs in this federal securities class action alleging that Marsh & McLennan and its officers, directors, auditors, and underwriters participated in a fraudulent scheme involving bid-rigging and secret agreements to steer business to certain insurance companies in exchange for kick-back commissions. After five years of litigation, G&E achieved a $400 million settlement on behalf of the class.

 

  • Merck (securities)
  • In re Merck & Co., Inc. Vytorin/Zetia Securities Litigation
  • $215 million

 

District of New Jersey

G&E served as co-lead counsel representing a foreign public pension fund and other funds in a securities class action suit against Merck & Co. after the drugmaker’s stock price plummeted and shareholders lost billions of dollars. The claims stemmed from a 2006 clinical trial called the ENHANCE study, which indicated that Merck’s anti-cholesterol drug Vytorin (a combination of Schering-Plough’s drug Zetia and Merck’s much cheaper and widely available Simvastatin, formerly known as Zocor), had no statistical advantage in treating atherosclerosis when compared to use of Simvastatin alone. The company settled the case just prior to trial, which was scheduled to begin on March 4, 2013.

 

  • Oxford Health
  • In re Oxford Health Plans Securities Litigation
  • $300 million

 

Southern District of New York

This was a consolidated securities class action in which G&E was appointed co-lead counsel and its client, a public pension fund, co-lead plaintiff. After jury selection had begun for trial, the defendants agreed to settle the case for $300 million, including $75 million from KPMG, constituting one of the largest settlements ever by an accounting firm.

 

  • Parmalat
  • In re Parmalat Securities Litigation
  • $110 million

 

Southern District of New York

G&E represented a foreign institutional investor as lead plaintiff in a class action arising out of a multi-billion dollar fraud at Parmalat, which the Securities and Exchange Commission described as “one of the largest and most brazen corporate financial frauds in history.” The suit alleged that Parmalat’s accounting firms (Grant Thornton and Deloitte & Touche) engaged in a sham audit that concealed the company’s true financial condition and contributed to the company’s bankruptcy status. Deloitte and Grant Thornton advanced an argument, successful in many other cases, that they had no responsibility for the deficient audit (and resulting securities fraud liability) conducted by their foreign member firms. However, G&E won a ground-breaking ruling rejecting Deloitte and Grant Thornton’s attempt to deny responsibility for the misdeeds of their foreign “affiliates.” The Parmalat decision, the first of its kind, held that global accounting firms, through their U.S. parents, could be vicariously liable for the actions of their foreign member firms. Ultimately, settlements were reached with Parmalat, two investment banks, auditors, and other defendants totaling over $110 million.

 

  • Pfizer Inc.
  • In re Pfizer Inc. Securities Litigation
  • $486 million

 

Southern District of New York

G&E was lead counsel in a securities class action against Pfizer alleging that the pharmaceutical company misrepresented the cardiovascular safety of its multi-billion-dollar arthritis drugs, Celebrex and Bextra. In 2004, when the truth about the drugs’ cardiovascular risks was revealed, Pfizer’s stock price declined significantly. The case was extensively litigated for over 10 years, with millions of pages of documents produced and more than 100 depositions taken. As the case was nearing trial in 2014, however, the Court granted defendants’ motion to exclude the testimony of plaintiffs’ expert concerning damages and causation, and thereafter granted summary judgment for defendants because without the testimony, plaintiffs could not prove damages or loss causation. Plaintiffs appealed, and in 2016, the decision was reversed. The parties later agreed on a settlement of the litigation providing for a cash payment by Pfizer of $486 million.

  • Refco
  • In re Refco, Inc. Securities Litigation
  • $422 million

 

Southern District of New York

G&E represented an investment manager as co-lead plaintiff in a securities class action alleging that certain officers and directors of Refco, Inc., as well as other defendants including the company’s auditor, its private equity sponsor, and the underwriters of Refco’s securities, violated federal securities laws in connection with investors’ purchases of Refco stock and bonds.

  • Safety-Kleen
  • In re Safety-Kleen Corporation Bondholders Litigation
  • $276 million

 

District of South Carolina

G&E represented numerous public and private funds in a federal securities class action and a series of related individual actions against former officers, directors, auditors, and underwriters of Safety-Kleen Corporation, who allegedly made false and misleading statements in connection with the sale and issuance of bonds. This was only the fifth securities class action to go to trial since the passage of the Private Securities Litigation Reform Act. At the conclusion of trial, the court entered judgments in the amount of $192 million against Safety-Kleen Corporation’s former CEO and CFO. Settlements totaling $84 million were reached with the company’s outside directors and auditor, bringing the total in judgments and settlements to $276 million.

 

  • Satyam
  • In re Satyam Computer Services Ltd. Securities Litigation
  • $150.5 million

 

Southern District of New York

G&E represented a public pension fund as lead plaintiff in a securities class action against Satyam. Dubbed “The Enron of India,” investors in Satyam were stunned when the company’s Chairman, B. Ramalinga Raju, publicly released a letter admitting that Satyam’s balance sheet was inflated by at least INR 71 billion (Indian rupees), equal to approximately $1.4 billion USD. The day prior to its collapse, Satyam was listed as having a market capitalization of $3.15 billion USD. That value evaporated overnight as a result of the fraud. The litigation was settled for a total of $150.5 million.

 

  • Tyco
  • In re Tyco International, Ltd. Securities Litigation
  • $3.2 billion

 

District of New Hampshire

G&E represented two public pension funds as co-lead plaintiffs in a securities class action against Tyco International, Ltd., involving acquisition accounting fraud and looting of the company’s assets by its former officers and directors. After extensive discovery and litigation, the class reached a historic settlement with Tyco for $2.975 billion, the single largest payment from any corporate defendant in the history of securities class action litigation. The class also reached a settlement with Tyco’s former auditor, PricewaterhouseCoopers LLP, for $225 million, the second highest settlement ever reached with an auditor in securities litigation.