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.

Company
Description
Recovery Amount
Alstom SA
In re Alstom SA Securities Litigation
$6.95 million

Southern District of New York

Louisiana State Employees’ Retirement System was appointed as co-lead plaintiff and G&E was appointed co-lead counsel in a class action against Alstom SA, a French corporation engaged in power generation, transmission and distribution in France. The suit alleges that Alstom and other defendants made false and misleading statements concerning the growth and financial performance of its transportation subsidiary. G&E achieved a settlement in the amount of $6.95 million.

Asia Pulp and Paper
Franklin High Income Trust, et al. v. APP Global Ltd., et al.

New York Superior Court

On behalf of bondholders of various subsidiaries of Indonesian paper-making giant Asia Pulp and Paper (“APP”), G&E filed an action alleging that the bondholders were defrauded by APP’s financial statements which were inflated by nearly $1 billion in fictitious sales. Defendants’ motions to dismiss were denied. The matter was resolved through a confidential settlement.

Cellstar
Gluck v. CellStar Corp.
$14.6 million

Northern District of Texas

In one of the earliest cases filed after the enactment of PSLRA, the State of Wisconsin Investment Board (“SWIB”) was designated lead plaintiff and G&E was appointed lead counsel. The cited opinion is widely considered the landmark on standards applicable to the lead plaintiff/lead counsel practice under PSLRA. (See, especially, In re Cendant Corp. Litig., 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 as well. With SWIB’s active lead in the case, the class recovery, gross before fees and expenses, was approximated to be 56% of the class’ actual loss claims, about 4 times the historical 14% average gross recovery in securities fraud litigation. Because of the competitive process that SWIB had undertaken 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.

Citigroup Opt-Out
Multiple Opt-Out cases

Southern District of New York

International Fund Management S.A., et al. v. Citigroup, Inc.
Norges Bank v. Citigroup, Inc. et al.
Swiss & Global Asset Management AG and Swiss & Global Asset Management (Luxembourg) SA v. Citigroup, Inc. et al.
Universal-Investment Gesellschaft MBH, et al. v. Citigroup Inc., et al.
British Coal Staff Superannuation Scheme and Mineworkers Pension Scheme v. Citigroup, Inc. et al.
Stichting Pensioenfonds ABP v. Citigroup, Inc. et al.
Swisscanto Asset Management AG, et al. v. Citigroup Inc., et al.

G&E represented a number of European investors in litigation in the U.S. District Court for the Southern District of New York, seeking to recover losses on investments in Citigroup securities that were issued in the U.S. and the United Kingdom.  These losses stemmed from, among other things, Citigroup’s failure to publicly disclose the extent of its exposure to risks associated with subprime debt.  Because U.S. federal securities laws do not apply to investors’ purchases of bonds that were issued and purchased overseas, G&E brought claims pursuant to Section 90 of the U.K.’s Financial Services and Markets Act of 2000 to recover its clients’ losses on these non-U.S. bonds.  This was the first case in which such claims were asserted in a U.S. court, and indeed these claims are largely untested even in the courts of the U.K.  The case was settled for significantly more than G&E’s clients would have received if they had not opted out of the related class actions.

DaimlerChrysler
In re DaimlerChrysler AG Securities Litigation
$300 million

District of Delaware

G&E represented the Florida State Board of Administration 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 Dutch pension fund Stichting Pensioenfonds ABP 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 institutional investors.

Dollar General
In re Dollar General Securities Litigation
$172.5 million

Middle District of Tennessee

Grant & Eisenhofer 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 were 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.

Dura Pharmaceuticals
Dura Pharmaceuticals Inc. v. Broudo

United States Supreme Court

Grant & Eisenhofer represented the pension funds of the City of New York, the California Public Employees’ Retirement System (CalPERS), the California State Teachers’ Retirement System (CalSTRS), Los Angeles County Employees Retirement Association (LACERA) and the New York State Common Retirement Fund (NYSCRF) as Counsel for Amici Curiae before the Supreme Court of the United States.

General Motors
In re General Motors Corp. Securities and Derivative Litigation
$303 million

Eastern District of Michigan

G&E represented Deka Investment GmbH and Deka International SA in a securities class action against General Motors 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, with GM’s auditor, Deloitte & Touche contributing an additional $26 million.  The combined $303 million settlement ranked among the largest shareholder recoveries of 2008, and represented approximately 7% of the estimated provable damages.

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

Southern District of New York

G&E represented the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio 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. Among the settlements G&E obtained were settlements 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.

Hayes Lemmerz
Pacholder High Yield Fund, et al v. Cucuz, et al.
$51 million

Eastern District of Michigan

G&E served as lead counsel to plaintiffs and class members who purchased or acquired over $1 billion in bonds issued by Hayes Lemmerz International, Inc.  G&E negotiated a settlement worth $51 million.

Hollinger
Hollinger International Securities Litigation
$37.5 million

Northern District of Illinois

Grant & Eisenhofer was co-lead counsel in this securities class action arising out of a company scandal at Hollinger International, Inc. which involves payment of millions of dollars to certain executives, including the company’s former CEO, Lord Conrad Black, relating to sales of company assets. G&E negotiated a settlement with Hollinger in the amount of $37.5 million.

JPMorgan
In re JPMorgan Chase & Co. Securities Litigation

Southern District of New York

G&E represents co-lead plaintiffs Ohio Public Employees’ Retirement System, School Employees Retirement System of Ohio, and State Teachers’ Retirement System of Ohio in pursuing securities fraud claims under Section 10(b) of the Securities and 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 markets and caused JPM shareholders to suffer billions of dollars in damages. In March 2014, the Court issued a decision denying defendants’ motion to dismiss the case, on the grounds that plaintiffs had adequately alleged that materially false and misleading statements were issued by the defendants JP Morgan, its CEO (Jamie Dimon) and its CFO (Douglas Braunstein).  The case is now proceeding to discovery.

Just For Feet
In re Just for Feet Securities Litigation
$32 million

District of Delaware

G&E represented the State of Wisconsin Investment Board (“SWIB”) in a federal securities class action against certain officers and directors of Just For Feet, Inc., and against Just For Feet’s auditors, in the Northern District of Alabama.  That action arose out of the defendants’ manipulation of the company’s accounting practices to materially misstate the company’s financial results.  Having been appointed co-lead plaintiff, SWIB and (G&E) as its counsel took primary responsibility for the case.  (SWIB v. Ruttenberg, et al., N.D. Ala., CV 99-BU-3097-S and 99-BU-3129-S, 102 F. Supp. 2d 1280 (N.D. Ala. 2000)).  SWIB obtained a policy limits settlement with the individual defendants’ D&O carrier and an additional $7.4 million from Just For Feet’s auditor, for a recovery totaling approximately $32 million.

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

Southern District of New York

Grant & Eisenhofer represented the Public Employees Retirement System of Ohio, the State Teachers’ Retirement System of Ohio, the Ohio Bureau of Workers’ Compensation and the State of New Jersey’s division of investment as lead plaintiffs in this federal securities class action alleging that the Marsh & McLennan, 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 its clients – co-lead plaintiffs the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio.

Medtronic
Minneapolis Firefighters’ Relief Association, et al. v. Medtronic, Inc., et al.
$85 million

District of Minnesota

Grant & Eisenhofer served as co-lead counsel in a securities fraud class action against Medtronic, and certain of its executive officers, alleging that materially false and misleading statements and omissions were made regarding the extent to which revenue from one of Medtronic’s products, the INFUSE bone graft device, depended on marketing and sales for applications not approved by the FDA (i.e., “off-label” uses).  Plaintiffs alleged that the defendants failed to disclose to investors that its INFUSE-based revenues were being boosted by Medtronic’s illegal off-label marketing practices, while at the time concealing the severe adverse side-effects associated with such off-label uses, thereby causing the Company’s stock to trade at artificially-inflated prices.  After a vigorous discovery period, G&E negotiated a settlement for $85 million, one of the largest settlements of its kind in the District of Minnesota.  In approving the settlement, District Judge Paul Magnuson observed that: “Lead Counsel have conducted the litigation and achieved the Settlement with skill, perseverance and diligent advocacy.”

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, the Colorado Public Employees’ Retirement Association, was a 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, 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 Hermes Focus Asset Management Europe, Ltd. 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.” G&E 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 its foreign member firm. However, G&E won a ground-breaking ruling rejecting Deloitte and Grant Thornton’s attempt to deny responsibility for the misdeeds of their foreign “affiliate.” The Parmalat decision, the first of its kind, held that the global accounting firms, through its U.S. parent, could be vicariously liable for the actions of its foreign member firm. Ultimately, settlements were reached with Parmalat, two investment banks, auditors and other defendants totaling over $110 million.

Pfizer
In re Pfizer Inc. Securities Litigation

Southern District of New York

Grant & Eisenhofer is currently class counsel in a certified federal securities class action against Pfizer and certain of its former officers and directors, including former Pfizer CEO, Hank McKinnell. Plaintiffs are alleging that Pfizer affirmatively misrepresented the cardiovascular safety of its multi-billion-dollar arthritis drugs, Celebrex and Bextra, and actively concealed adverse safety information concerning the products in order to win market share from Merck’s competing Cox-2 drug, Vioxx. In 2004 and 2005, when the truth about the cardiovascular risks of Celebrex and Bextra was finally revealed, Pfizer shareholders collectively lost tens of billions of dollars. Plaintiffs are also alleging that certain former officers and directors of Pfizer illegally sold shares of Pfizer stock during the class period while in possession of material, non-public information concerning the drugs.

The case has been extensively litigated for nearly 8 years, with millions of pages of documents produced and more than 50 depositions taken.  A class of investors has been certified by the Court.  Further, prior to the beginning of merits discovery, the parties engaged in a Daubert proceeding in which Pfizer argued that there was no scientific basis for a claim that Celebrex and Bextra were associated with adverse cardiovascular effects.  Both sides submitted extensive expert repots and, after a 5 day trial, the Court completely rejected Pfizer’s challenges to Plaintiffs’ expert testimony.

Porsche Automobile
Porsche Automobile Holdings S.A. and Volkswagen AG

G&E, along with German counsel, is prosecuting claims in the German Regional Court of Braunschweig against Porsche and Volkswagen arising out of the “short squeeze” orchestrated by Porsche with respect to Volkswagen shares in 2008. The claims arise out of losses suffered by investors who engaged in short sales and other transactions respecting Volkswagen stock and who were injured by Porsche’s allegedly false and misleading statements concerning its lack of intention to increase its holdings of Volkswagen stock. On behalf of its clients, G&E initially filed claims in the U.S. under the federal securities laws, but after the Supreme Court’s decision in Morrison v. Australia Nat’l Bank, which precludes investors who purchased securities on foreign exchanges from suing under the federal securities laws, G&E looked for an alternative forum in which the investors might be able to recover their losses. The case was filed in Germany in late 2011 asserting claims under German corporate and tort law. A large number of institutional investors, from both the U.S. and Europe, have joined the case, asserting damages in excess of $1 billion.

Refco
In re Refco Inc. Securities Litigation
$407 million

Southern District of New York

G&E represented Pacific Investment Management Company LLC (“PIMCO”) 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 the federal securities laws in connection with investors’ purchases of Refco stock and bonds.  Recoveries for the class exceeded $400 million, including $140 million from the company’s private equity sponsor, over $50 million from the underwriters, and $25 million from the auditor.

Royal Dutch/Shell Transport
In re Royal Dutch/Shell Transport Securities Litigation
$450 million

District of New Jersey

Grant & Eisenhofer represents several European institutional investors in the pan-European class action settlement with Royal Dutch Shell relating to misrepresentations concerning its proven oil and gas reserves between 1999 and 2004, when Shell traded as two stocks: Shell Transport & Trading and Royal Dutch Petroleum. After several months of negotiations, settlement was reached, valued at approximately $450 million, including $352.6 million in cash paid from Shell and an expected payment to non-U.S. shareholders of an additional $120 million fine Shell paid to the U.S. Securities and Exchange Commission. In addition to this amount, Shell agreed to pay all fees and expenses relating to the settlement.

The settlement was reached under Dutch law. The Netherlands, the location of Shell’s headquarters, is the only European country that provides for the approval of class action settlements. Pursuant to Dutch law, the Amsterdam Court of Appeals may approve a settlement on a class-wide basis if it finds the settlement to be reasonable. However, Dutch law does not allow aggrieved individuals to petition the court for a class-wide settlement. The power to petition the court to approve a class-wide settlement can only be done through the creation of a special purpose legal entity – a foundation or association. G&E created a foundation with over 100 large institutional investors of Shell as participants or members.

This ground-breaking settlement provides the opportunity for non-U.S. investors to be part of a novel event by resolving a dispute without resorting to litigation. With over 80 percent of Shell’s stock traded on European exchanges, its large shareholders are almost all located in Europe, where the fraudulent activity occurred. Consequently, Shell is supportive of this settlement and hopes to increase goodwill with shareholders by making changes in corporate governance.

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

District of South Carolina

Grant & Eisenhofer 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

Grant & Eisenhofer represented lead plaintiffs in the Satyam matter, which was dubbed, “The Enron of India.” Investors in Satyam were stunned when the Company’s CEO, B. Ramalinga Raju, publicly released a letter admitting to inflating the amount of cash on the Company’s balance sheet, overstating revenue and operating margin while understating liabilities. The resulting settlement totaled $150.5 million.

Styling Technology Corporation
Franklin High Income Trust, et al. v. Richard R. Ross, et al.

Superior Court of California

G&E represented funds managed by Franklin Advisers, Inc., Conseco Capital Management, Inc., Credit Suisse Asset Management, Pilgrim American Funds and Oppenheimer Funds, Inc. in a securities action brought in May 2001, asserting both federal (1933 Act) and state claims brought in the Superior Court of California.  The suit alleged that certain former officers, as well as the independent auditors, of Styling Technology Corporation made false and misleading statements in connection with the sale and issuance of Styling Technology bonds.  Styling Technology filed for bankruptcy protection under Chapter 11 in August 1999.  In October 2000, discovery of accounting irregularities and improperly recognized revenue forced the Company to restate its financial statements for the years 1997 and 1998.  Plaintiffs, owning $66.5 million of the total $100 million in bonds sold in the offering, settled the case for a recovery representing approximately 46% of the losses suffered by the client funds that they manage.

Telxon Corporation
Wyser-Pratte Management Co., Inc. v. Telxon Corp., et al.

Northern District of Ohio

G&E filed a federal securities and common law action against Telxon Corporation, its former officers and directors and its accountants in the Northern District of Ohio on behalf of Wyser-Pratte Management Co., Inc., an investment management firm.  Following mediation, G&E negotiated a settlement of all claims.

Total Renal Care
In re Total Renal Care Securities Litigation
$25 million

Central District of California

In June 1999, the Louisiana State Employees’ Retirement System (“LASERS”) and Teachers’ Retirement System of Louisiana (“TRSL”) were appointed as Lead Plaintiff in a federal securities class action against Total Renal Care (“TRC”) and certain of its officers and directors, pending in the U.S. District Court for the Central District of California.  G&E was approved as Plaintiffs’ Lead Counsel.  Plaintiffs filed their Corrected Consolidated Amended Complaint against the defendants, alleging, inter alia, that the defendants manipulated TRC’s financial statements so as to materially overstate TRC’s revenues, income and assets and to artificially inflate TRC’s stock price.  G&E negotiated a settlement requiring TRC’s payment of $25 million into a settlement fund for the class and the company’s adoption of certain internal corporate governance policies and procedures designed to promote the future accountability of TRC’s management to its stockholders.  At the time of the settlement, this amount represented 33% of the value of the Company’s shares.

Tyco
In re Tyco International, Ltd., Securities Litigation
$2.975 billion

District of New Hampshire

G&E represented the Teachers’ Retirement System of Louisiana and the Louisiana State Employees’ Retirement System 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 reached a settlement with Tyco’s former auditor, PricewaterhouseCoopers LLP, for $225 million, which represents the second highest settlement ever reached with an auditor in securities litigation. This case put the spotlight on the responsibility of both corporate leaders and outside auditors to protect shareholder interests.

Waste Management
Lens Investment Management, LLC v. Waste Management, Inc., et al.

Northern District of Florida

G&E filed a non-class federal securities action against Waste Management, Inc., its former and current directors, and the company’s accountants in the Northern District of Florida, on behalf of Lens Investment Management, LLC and Ram Trust Services, Inc.  The complaint alleged that Waste Management had, over a five-year period, issued financial statements and other public statements that were materially false and misleading due to the defendants’ fraudulent and improper accounting manipulations.  G&E also filed non-class actions in Illinois state court, asserting similar claims on behalf of the Florida State Board of Administration (“FSBA”) and the Teachers’ Retirement System of Louisiana (“TRSL”).  After G&E successfully defeated the defendants’ motions to dismiss FSBA’s complaint in state court, FSBA’s cause of action was transferred to the Northern District of Florida.  At the point where there were competing motions for summary judgment pending, G&E successfully negotiated a settlement pursuant to which each plaintiff received several times what it would have received in the class action.