Labaton Sucharow

Global

Review

United States (National)

Dispute resolution

Plaintiff shop Labaton Sucharow has been historically viewed as, and still is primarily known as, a securities boutique, although the firm has broadened its scope to take on cases in the antitrust arena as well. Operating in the financial district of New York as well as in Wilmington, Delaware; and Washington, DC, the firm is well poised to feed heartily on a steady diet of corporate disputes arising on Wall Street and in the Delaware Court of Chancery.
     One of the Labaton’s biggest developments over the past year has been the rising profile of the firm’s Delaware practice. This has largely been attributed to the efforts of Ned Weinberger, a partner who has the community talking. “Ned Weinberger is a real up and comer,” confirms one Wilmington peer. “He is not yet at the level of the big Delaware of the more established senior guys around [Wilmington] but he has a couple of wins under his belt and a lot of people really respect him.” Another observes, “There’s definitely something going over at Labaton in Delaware, you can feel it. And that’s Ned. He is making waves around here and is going to start making life a little more difficult for some of the more senior ‘swashbucklers’ who are used to running the show.” Weinberger scored a plum appointment in March 2019 when he was appointed co-lead counsel in a class action against Dell Technologies stemming from a $14 billion share exchange transaction that closed in December 2018. The action alleges that the controlling stockholders of Dell breached their fiduciary duties and expropriated billions of dollars in value from Dell's Class V Stockholders. According to the complaint, Dell's controllers created a sham special committee that was riddled with conflicts, failed to obtain appropriate and independent advice, and ultimately aligned itself with Dell. Weinberger also served as co-lead counsel in a derivative lawsuit challenging decisions made by the board of directors of AGNC Investment, a mortgage REIT, including paying exorbitant annual fee payments to the company’s external asset manager, and then, acquiring that manager for an inflated price. A $35.5 million settlement was announced in June 2019. Weinberger is also is co-lead counsel in a class action litigation challenging the fairness of a take-private transaction involving AmTrust Financial Services. Private equity funds managed by Stone Point Capital together with AmTrust’s directors proposed to take the insurer private for $2.95 billion. The firm had been prosecuting a derivative lawsuit against the same defendants since 2014, which alleged that the controlling shareholders of AmTrust and the board of directors breached their fiduciary duties by acting to advance the interests of the controlling shareholder’s family, rather than the interests of AmTrust and its minority stockholders. In 2016, the court denied the only motion to dismiss filed in the derivative suit. The consolidated class Action Complaint filed in January 2019 alleges that members of the AmTrust board of directors’ special committee charged with reviewing the take private transaction were conflicted.
     Another major development within the firm is blossoming of its whistleblower practice, an area that has received a significant level of attention from peers, opponents, and the media. The credit for this lies with New York’s Jordan Thomas. Over the past seven years, Thomas, a former SEC regulator himself, has cultivated “a very impressive space for himself in that world, and a very impressive pathway for this practice in general.” One peer insists, “He is the guy – the most renowned SEC whistleblower in the nation. He had a $13 million claim. He has a pipeline of about 30 matters that have been accepted by the SEC.” Thomas scored big in March 2018, when the SEC announced that it awarded a group of whistleblowers more than $83 million, the largest awards announced by the agency since the inception of the SEC's Whistleblower program in 2011. The firm’s clients tipped the SEC off to misconduct at Merrill Lynch, leading to a landmark enforcement action resulting in Merrill paying $415 million to settle charges that it misused customer cash to generate profits for the bank and failed to safeguard customer assets. Another New York partner, Jonathan Gardner secured a $42.5 million recovery in a securities class action against Intuitive Surgical. The action alleged that Intuitive violated federal securities fraud laws by making false and misleading statements regarding the safety and efficacy of its marquee product, the da Vinci Surgical System, and its compliance with FDA regulations.
    Thomas Dubbs, one of the firm’s more senior partners, remains one of its most active litigators and, according to a peer, “is still Tom Dubbs, and will continue to be until he decides to stop being Tom Dubbs. Those who’ve seen him in action know what I mean by that.” Dubbs is co-lead counsel in a high-profile litigation based on the scandals involving Goldman Sachs’ sales of the Abacus CDO. The lawsuit alleges that Goldman made a series of false and misleading statements surrounding its sale of the Abacus CDO, and concealed conflicts of interest in several CDO transactions. Dubbs is also lead counsel in a complex securities class action against California utility PG&E related to a series of wildfires that devastated Northern California in October 2017 and subsequently filed for bankruptcy. Dubbs is also co-lead counsel in a landmark class action against seven US stock exchanges alleging that the defendant exchanges provided distinct products and services to high-frequency trading firms that manipulated the market in favor of these firms at the expense of ordinary investors. In May 2019, the Southern District of New York denied the defendant exchanges’ renewed motion to dismiss in its entirety, reasoning that plaintiffs had successfully alleged standing, reliance, scienter, and loss causation.