Securities & Investment Fraud

Brooks Automation, Inc.

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Result: $7.75 million settlement
Year: 2008

In re Brooks Automation, Inc. Securities Fraud Litigation

Lieff Cabraser served as Court-Appointed Lead Counsel for lead plaintiff the Los Angeles County Employees Retirement Association and co-plaintiff the Sacramento County Employees’ Retirement System in a class action lawsuit on behalf of purchasers of Brooks Automation securities.

Plaintiffs charged that Brooks Automation and its senior corporate officers and directors violated federal securities laws by backdating company stock options over a six year period, and failed to disclose the scheme in publicly filed financial statements. Subsequent to Lieff Cabraser’s filing of a consolidated amended complaint in this action, both the Securities and Exchange Commission and the United States Department of Justice filed complaints against the Company’s former C.E.O., Robert Therrien, related to the same alleged practices.

In October 2008, the Court approved a $7.75 million settlement of the action.


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Result: $13 million settlement
Year: 1990

Nguyen v. FundAmerica Securities Fraud Litigation

Lieff Cabraser served as Plaintiffs’ Class Counsel in this securities/RICO/tort action seeking an injunction against alleged unfair “pyramid” marketing practices and compensation to participants.

The District Court certified a nationwide class for injunctive relief and damages on a mandatory basis and enjoined fraudulent overseas transfers of assets. The Bankruptcy Court permitted class proof of claims. Lieff Cabraser obtained dual District Court and Bankruptcy Court approval of settlements distributing over $13 million in FundAmerica assets to class members.

Network Associates

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Result: $30 million settlement
Year: 2001

In re Network Associates, Inc. Securities Fraud Litigation

Following a competitive bidding process, the Court appointed Lieff Cabraser as Lead Counsel for the Lead Plaintiff and the class of investors. The complaint alleged that Network Associates improperly accounted for acquisitions in order to inflate its stock price. In May 2001, the Court granted approval to a $30 million settlement.

In reviewing the Network Associates settlement, U.S. District Court Judge William H. Alsup observed,

[T]he class was well served at a good price by excellent counsel … We have class counsel who’s one of the most foremost law firms in the country in both securities law and class actions. And they have a very excellent reputation for the conduct of these kinds of cases and their experience and views…

Media Vision

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Result: $31 million settlement
Year: 2003

In re Media Vision Technology Securities Fraud Litigation

Lieff Cabraser served as Co-Lead Counsel in a class action lawsuit which alleged that certain Media Vision officers, outside directors, accountants, and underwriters engaged in a fraudulent scheme to inflate the company’s earnings, and issued false and misleading public statements about the company’s finances, earnings and profits.

By 1998, the Court had approved several partial settlements with many of Media Vision’s officers and directors, accountants and underwriters which totaled $31 million. The settlement proceeds have been distributed to eligible class members. The evidence that Lieff Cabraser developed in the civil case led prosecutors to commence an investigation and ultimately file criminal charges against Media Vision’s former Chief Executive Officer and Chief Financial Officer.

The civil action against Media Vision’s CEO and CFO was stayed pending the criminal proceedings against them. In the criminal proceedings, the CEO pled guilty on several counts, and the CFO was convicted at trial. In October, 2003, the Court granted Plaintiffs’ motions for summary judgment and entered a judgment in favor of the class against these two defendants in the amount of $188 million.

California Micro Devices

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Result: $31 million settlement
Year: 2001

In re California Micro Devices Securities Fraud Litigation

Lieff Cabraser served as Liaison Counsel for the Colorado Public Employees’ Retirement Association and the California State Teachers’ Retirement System, and the class they represented.

Prior to 2001, the Court approved $19 million in settlements. In May 2001, the Court approved an additional settlement of $12 million, which, combined with the earlier settlements, provided class members an almost complete return on their losses.

The settlement with the company included multi-million dollar contributions by the former Chairman of the Board and Chief Executive Officer.

Commenting in 2001 on Lieff Cabraser’s work in Cal Micro Devices, U.S. District Court Judge Vaughn R. Walker stated,

It is highly unusual for a class action in the securities area to recover anywhere close to the percentage of loss that has been recovered here, and counsel and the lead plaintiffs have done an admirable job in bringing about this most satisfactory conclusion of the litigation.

One year later, in a related proceeding and in response to the statement that the class had received nearly a 100% recovery, Judge Walker observed,

That’s pretty remarkable. In these cases, 25 cents on the dollar is considered to be a magnificent recovery, and this is [almost] a hundred percent.


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Result: $32 million settlement
Year: 1994

In re FPI/Agretech Securities Fraud Litigation

We served as Lead Class Counsel for investors defrauded in a “Ponzi-like” limited partnership investment scheme. The Court approved $15 million in partial, pretrial settlements.

At trial, the jury returned a $24 million verdict, which included $10 million in punitive damages, against non-settling defendant Arthur Young & Co. for its knowing complicity and active and substantial assistance in the marketing and sale of the worthless limited partnership offerings.

The appellate court affirmed the compensatory damages award and remanded the case for a retrial on punitive damages. In 1994, the Court approved a $17 million settlement with Ernst & Young, the successor to Arthur Young & Co.

Cablevision Systems Corp. Securities Fraud Derivative Litigation

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Result: $34.4 million settlement
Year: 2008

In re Cablevision Systems Corp. Derivative Securities Fraud Litigation

Lieff Cabraser served as Co-Lead Counsel in a shareholders’ derivative action against the board of directors and numerous officers of Cablevision.

The suit alleged that defendants intentionally manipulated stock option grant dates to Cablevision employees between 1997 and 2002 in order to enrich certain officer and director defendants at the expense of Cablevision and Cablevision shareholders. According to the complaint, Defendants made it appear as if stock options were granted earlier than they actually were in order to maximize the value of the grants.

In September 2008, the Court granted final approval to a $34.4 million settlement of the action. Over $24 million of the settlement was contributed directly by individual defendants who either received backdated options or participated in the backdating activity.

Peregrine Securities Fraud

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Result: $45 million settlement
Year: 2006

Allocco v. Gardner Securities Fraud Litigation

Lieff Cabraser represented Lawrence L. Garlick, the co-founder and former Chief Executive Officer of Remedy Corporation and 24 other former senior executives and directors of Remedy Corporation in a private (non-class) securities fraud lawsuit against Stephen P. Gardner, the former Chief Executive Officer of Peregrine Systems, Inc., John J. Moores, Peregrine’s former Chairman of the Board, Matthew C. Gless, Peregrine’s former Chief Financial Officer, Peregrine’s accounting firm Arthur Andersen and certain entities that entered into fraudulent transactions with Peregrine.

The lawsuit, filed in California state court, arose out of Peregrine’s August 2001 acquisition of Remedy. Plaintiffs charged that they were induced to exchange their Remedy stock for Peregrine stock on the basis of false and misleading representations made by defendants. Within months of the Remedy acquisition, Peregrine began to reveal to the public that it had grossly overstated its revenue during the years 2000-2002, and eventually restated more than $500 million in revenues.

After successfully defeating demurrers brought by defendants, including third parties who were customers of Peregrine who aided and abetted Peregrine’s accounting fraud under California common law, plaintiffs reached a series of settlements. The settling defendants included Arthur Andersen, all of the director defendants, three officer defendants and the third party customer defendants KPMG, British Telecom, Fujitsu, Software Spectrum and Bindview. The total amount received in settlements was approximately $45 million.

Japanese Bank Princeton Notes Securities Fraud

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Result: $50 million settlement, a 100% recovery for our client
Year: 2001

Kofuku Bank Ltd. and Namihaya Bank Ltd. v. Republic New York Securities Corp., et al. and Related Securities Fraud Actions (“Princeton Notes” cases)

Lieff Cabraser represented Kofuku Bank, Namihaya Bank and Kita Hyogo Shinyo-Kumiai (a credit union) in individual lawsuits against, among others, Martin A. Armstrong and HSBC, Inc., the successor-in-interest to Republic New York Corporation, Republic New York Bank and Republic New York Securities Corporation for alleged violations of federal securities and racketeering laws.

Through a group of interconnected companies owned and controlled by Armstrong – the Princeton Companies – Armstrong and the Republic Companies promoted and sold promissory notes, known as the “Princeton Notes,” to more than eighty of the largest companies and financial institutions in Japan.

Lieff Cabraser’s lawsuits, as well as the lawsuits of dozens of other Princeton Note investors, alleged that the Princeton and Republic Companies made fraudulent misrepresentations and non-disclosures in connection with the promotion and sale of Princeton Notes, and that investors’ monies were commingled and misused to the benefit of Armstrong, the Princeton Companies and the Republic Companies.

In December 2001, the claims of our clients and those of the other Princeton Note investors were settled. As part of the settlement, our clients recovered more than $50 million, which represented 100% of the value of their principal investments less money they received in interest or other payments.

Tyco International

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Result: $54 million settlement
Year: 2009

BlackRock Global Allocation Fund, Inc., et al. v. Tyco International Ltd., et al.; Nuveen Balanced Municipal and Stock Fund, et al. v. Tyco International Ltd., et al. Securities Fraud Litigation

Lieff Cabraser represented multiple funds of the investment firms BlackRock Inc. and Nuveen Asset Management in separate, direct securities fraud actions against Tyco International Ltd., Tyco Electronics Ltd., Covidien Ltd, Covidien (U.S.), L. Dennis Kozlowski, Mark H. Swartz, and Frank E. Walsh, Jr.

Plaintiffs alleged that defendants engaged in a massive criminal enterprise that combined the theft of corporate assets with fraudulent accounting entries that concealed Tyco’s financial condition from investors. As a result, plaintiffs purchased Tyco common stock and other Tyco securities at artificially inflated prices and suffered losses upon disclosures revealing Tyco’s true financial condition and defendants’ misconduct.

In 2009, the parties settled the claims against the corporate defendants (Tyco International Ltd., Tyco Electronics Ltd., Covidien Ltd., and Covidien (U.S.). The litigation concluded in 2010. The total settlement proceeds paid by all defendants were in excess of $57 million.

Celera Corporation

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Result: Confidential settlement
Year: 2014

Biotechnology Value Fund, L.P. v. Celera Corp.

Lieff Cabraser represented a group of affiliated funds investing in biotechnology companies in this individual action arising from misconduct in connection with Quest Diagnostics Inc.’s 2011 acquisition of Celera Corporation.

Celera, Celera’s individual directors, and Credit Suisse were charged with violations of Sections 14(e) and 20(a) of the Exchange Act and breach of fiduciary duty. In February 2014, the Court denied in large part defendants’ motion to dismiss the second amended complaint.

In September 2014, the plaintiffs settled with Credit Suisse for a confidential amount. After the completion of fact and expert discovery, and prior to a ruling on defendants’ motion for summary judgment, in January 2015 the plaintiffs settled with the Celera defendants for a confidential amount.

AXA Rosenberg Investor Litigation

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Result: $65 million settlement
Year: 2012

In re AXA Rosenberg Investor Fraud Litigation

We served as Co-Lead Counsel for a class of institutional investors, ERISA-covered plans, and other investors in quantitative funds managed by AXA Rosenberg Group, LLC and its affiliates (“AXA”). Plaintiffs alleged that AXA breached its fiduciary duties and violated ERISA by failing to discover a material computer error that existed in its system for years, and then failing to remedy it for months after its eventual discovery in 2009.

By the time AXA disclosed the error in 2010, investors had suffered losses and paid substantial investment management fees to AXA. After briefing motions to dismiss and working with experts to analyze data obtained from AXA relating to the impact of the error, we reached a $65 million settlement with AXA that the Court approved in April 2012.

Diamond Foods Securities Litigation

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Result: Settlement valued at $127.3 million
Year: 2014

Lieff Cabraser served as local counsel for Lead Plaintiff Public Employees’ Retirement System of Mississippi (“MissPERS”) and the class of investors it represented in this securities class action lawsuit arising under the PSLRA.

The complaint charged Diamond Foods and certain senior executives of the company with violations of the Exchange Act for knowingly understating the cost of walnuts Diamond Foods purchased in order to inflate the price of Diamond Foods’ common stock.

In January 2014, the Court granted final approval of a settlement of the action requiring Diamond Foods to pay $11 million in cash and issue 4.45 million common shares worth $116.3 million on the date of final approval based on the stock’s closing price on that date.


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Result: $136 million settlement
Year: 1999

Lieff Cabraser represented Richard H. Williams, the former Chief Executive Officer and President of Illustra Information Technologies, Inc. (“Illustra”), and a class of Illustra shareholders in a class action suit on behalf of all former Illustra securities holders who tendered their Illustra preferred or common stock, stock warrants or stock options in exchange for securities of Informix Corporation (“Informix”) in connection with Informix’s 1996 purchase of Illustra.

Pursuant to that acquisition, Illustra stockholders received Informix securities representing approximately 10% of the value of the combined company. The complaint alleged claims for common law fraud and violations of Federal securities law arising out of the acquisition.

In October 1999, U.S. District Judge Charles E. Breyer approved a global settlement of the litigation for $136 million, constituting one of the largest settlements ever involving a high technology company alleged to have committed securities fraud. Our clients, the Illustra shareholders, received approximately 30% of the net settlement fund.

Merrill Lynch Funds SF Lawsuit Against McKesson

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Result: $145 million settlement
Year: 2004

Merrill Lynch Funds v. McKesson Securities Litigation

Lieff Cabraser served as counsel for two Merrill Lynch sponsored mutual funds in a private lawsuit alleging that a massive accounting fraud occurred at HBOC & Company ("HBOC") before and following its 1999 acquisition by McKesson Corporation ("McKesson").

The funds charged that defendants, including the former CFO of McKesson HBOC, the name McKesson adopted after acquiring HBOC, artificially inflated the price of securities in McKesson HBOC, through misrepresentations and omissions concerning the financial condition of HBOC, resulting in approximately $135 million in losses for plaintiffs.

In a significant discovery ruling in 2004, the California Court of Appeal held that defendants waived the attorney-client and work product privileges in regard to an audit committee report and interview memoranda prepared in anticipation of shareholder lawsuits by disclosing the information to the U.S. Attorney and SEC. McKesson HBOC, Inc. v. Supr. Court, 115 Cal. App. 4th 1229 (2004).

Lieff Cabraser’s clients recovered approximately $145 million, representing nearly 104% of damages suffered by the funds. This amount was approximately $115-120 million more than the Merrill Lynch funds would have recovered had they participated in the federal class action settlement.

Edsaco and Scorpion Technologies Securities Fraud

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Result: $170 million jury verdict
Year: 2002

In re Scorpion Technologies, Inc. Securities Litigation I

Lieff Cabraser served as Lead Counsel in class action suits arising out of an alleged fraudulent scheme by Scorpion Technologies, Inc., certain of its officers, accountants, underwriters and business affiliates to inflate the company’s earnings through reporting fictitious sales. In Scorpion I, the Court found plaintiffs had presented sufficient evidence of liability under Federal securities acts against the accounting firm Grant Thornton for the case to proceed to trial. In re Scorpion Techs., 1996 U.S. Dist. LEXIS 22294 (N.D. Cal. Mar. 27, 1996).

In 1988, the court approved a $5.5 million settlement with Grant Thornton. In 2000, the Court approved a $950,000 settlement with Credit Suisse First Boston Corporation. In April 2002, a federal jury in San Francisco, California, returned a $170.7 million verdict against Edsaco Ltd. The jury found that Edsaco aided Scorpion in setting up phony European companies as part of a scheme in which Scorpion reported fictitious sales of its software to these companies, thereby inflating its earnings. Included in the jury verdict, one of the largest verdicts in the U.S. in 2002, was $165 million in punitive damages. Richard M. Heimann conducted the trial for plaintiffs.

On June 14, 2002, U.S. District Court Judge Susan Illston commented on Lieff Cabraser’s representation:

[C]ounsel for the plaintiffs did a very good job in a very tough situation of achieving an excellent recovery for the class here. You were opposed by extremely capable lawyers. It was an uphill battle. There were some complicated questions, and then there was the tricky issue of actually collecting anything in the end. I think based on the efforts that were made here that it was an excellent result for the class… [T]he recovery that was achieved for the class in this second trial is remarkable, almost a hundred percent.


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Result: Settlements valued at $197.5 million
Year: 2011

In re Broadcom Corp. Derivative Litigation

Lieff Cabraser served as Court-appointed Lead Counsel in a shareholders derivative action arising out of stock options backdating in Broadcom securities. The complaint alleged that defendants intentionally manipulated their stock option grant dates between 1998 and 2003 at the expense of Broadcom and Broadcom shareholders.

By making it seem as if stock option grants occurred on dates when Broadcom stock was trading at a comparatively low per share price, stock option grant recipients were able to exercise their stock option grants at exercise prices that were lower than the fair market value of Broadcom stock on the day the options were actually granted.

In December 2009, U.S. District Judge Manuel L. Real granted final approval to a partial settlement in which Broadcom Corporation’s insurance carriers paid $118 million to Broadcom. The settlement released certain individual director and officer defendants covered by Broadcom’s directors’ and officers’ policy.

Plaintiffs’ counsel continued to pursue claims against William J. Ruehle, Broadcom’s former Chief Financial Officer, Henry T. Nicholas, III, Broadcom’s co-founder and former Chief Executive Officer, and Henry Samueli, Broadcom’s co-founder and former Chief Technology Officer.

In May 2011, the Court approved a settlement with these defendants. The settlement provided substantial consideration to Broadcom, consisting of the receipt of cash and cancelled options from Dr. Nicholas and Dr. Samueli totaling $53 million in value, plus the release of a claim by Mr. Ruehle, which sought damages in excess of $26 million.

Coupled with the earlier $118 million partial settlement, the total recovery in the derivative action was $197 million, which constitutes the third-largest settlement ever in a derivative action involving stock options backdating.

First Capital Holdings Financial Products

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Result: Settlement valued at $1 billion
Year: 1994

In re First Capital Holdings Corp. Financial Products Securities Litigation

Lieff Cabraser served as Co-Lead Counsel in a class action brought to recover damages sustained by policyholders of First Capital Life Insurance Company and Fidelity Bankers Life Insurance Company policyholders resulting from the insurance companies’ allegedly fraudulent or reckless investment and financial practices, and the manipulation of the companies’ financial statements.

This policyholder settlement generated over $1 billion in restored life insurance policies, and was approved by both federal and state courts in parallel proceedings and then affirmed by the Ninth Circuit on appeal.

State Street Securities Litigation

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Issue: False foreign exchange rates
Result: $300 million settlement

Arkansas Teacher Retirement System v. State Street Corporation, et al.

Lieff Cabraser is co-counsel for a proposed nationwide class of institutional custodial customers of State Street, including public pension funds and ERISA plans, who allege that defendants deceptively charged class members on FX trades done in connection with the purchase and sale of foreign securities. On November 2, 2016, U.S. District Senior Judge Mark L. Wolf granted final approval to a $300 million settlement of the litigation.

Similar to the action against BNY Mellon, the complaint charged that between 1999 and 2009, State Street consistently incorporated hidden and excessive mark-ups or mark-downs relative to the actual FX rates applicable at the times of the trades conducted for State Street’s custodial FX clients. State Street allegedly kept for itself, as an unlawful profit, the “spread” between the prices for foreign currency available to it in the FX marketplace and the rates it charged to its customers.

Plaintiffs sought recovery under Massachusetts’ Consumer Protection Law and common law tort and contract theories. In May 2012, the Court denied State Street’s motion to dismiss in all substantive respects. Thereafter and until the November 2016 settlement, the parties had been engaged in mediation and discovery.

Lieff Cabraser is also actively involved in counseling other state pension and ERISA funds with respect to their potential exposure to FX manipulation by custodial service providers.

Charles Schwab Cases – Residential Mortgage-Backed Securities

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Issue: Alleged violations of California Securities Laws

The Charles Schwab Corp. v. BNP Paribas Sec. Corp., No. CGC-10-501610 (Cal. Super. Ct.); The Charles Schwab Corp. v. J.P. Morgan Sec., Inc., No. CGC-10-503206 (Cal. Super. Ct.); The Charles Schwab Corp. v. J.P. Morgan Sec., Inc., No. CGC-10-503207 (Cal. Super. Ct.); and The Charles Schwab Corp. v. Banc of America Sec. LLC, No. CGC-10-501151 (Cal. Super. Ct.).

Lieff Cabraser, along with co-counsel, represents Charles Schwab in four separate individual securities actions against certain issuers and sellers of mortgage-backed securities (“MBS”) for materially misrepresenting the quality of the loans underlying the securities in violation of California state law. Charles Schwab Bank, N.A., a subsidiary of Charles Schwab, suffered significant damages by purchasing the securities in reliance on defendants’ misstatements.

The court largely overruled defendants’ demurrers in January 2012. Settlements have been reached with certain defendants for confidential amounts. Trials against remaining defendants Morgan Stanley & Co. Inc. and UBS Securities, LLC are scheduled for July 2016 and February 2017, respectively. Motions for summary judgment by defendant Goldman, Sachs & Co. are currently being briefed.