Securities and Shareholder Litigation

Our deep bench and extensive experience allow us to represent a wide range of clients. This includes major corporations and private companies, boards of directors and board committees, senior executives, financial advisers, investment banks, and auditors. We harness the full power of our global practice for our clients, working across offices and disciplines to ensure that they benefit from our collective experience.

A client observes ‘The client service is near flawless. I now hold the Sidley Austin team as the standard by which I compare others.’
— Chambers USA 2022, Nationwide: Securities Litigation

• Crisis management. When a crisis occurs, litigation, shareholder demands, and investigations often follow. We are skilled at responding effectively to the consequences of all manner of corporate traumas, such as product recalls, regulatory events, government investigations, accounting improprieties and restatements, unexpected losses or business downturns, data breaches, and whistleblower reports. Often asked to handle the multiple, overlapping proceedings that result from such events, our lawyers have a proven track record of successfully protecting our clients’ brands and reputations amid scrutiny.
• Seeing the big picture. We have provided board-level counsel for decades. Sidley has been, and continues to be, instrumental in the development of corporate and securities law, from winning the seminal Tellabs securities fraud case in the United States Supreme Court to defeating class certification and enforcing exclusive forum selection and arbitration bylaws today. The diversity of our lawyers’ experience and backgrounds — from first-chairing securities class action jury trials, to negotiating complex corporate governance settlements, to conducting investigations in response to shareholder demands — enables us to offer valuable insight that helps clients solve their most urgent legal and business matters.
• Focusing on individual needs. Our lawyers have a deep understanding of the challenges particular to our clients’ industries and are adept at drawing on the knowledge and experience of Sidley’s other practices to create a tailored, multidimensional response. We craft strategies to achieve each client’s goals, whether that is negotiating an early resolution or fighting through trial and appeal, if necessary. We also pride ourselves on our success in helping clients avoid litigation entirely.
• Regulatory interface. We are especially well-suited to handle matters involving both regulatory and litigation components. Our lawyers have substantial experience with virtually every subject investigated by the SEC and other governmental agencies, including financial accounting fraud, disclosure and reporting irregularities, stock option backdating, insider trading, broker-dealer trading and operations, IPOs and other offerings, hedge fund conduct, sales of unregistered securities, trading irregularities, and Foreign Corrupt Practices Act issues. In litigation matters with a significant regulatory interface, we offer our clients coordinated and complete solutions that are fully integrated into their larger business objectives. For example, in representing life sciences companies in shareholder litigation, we work collaboratively with our cutting-edge Food, Drug, and Medical Device practice in order to provide clients with comprehensive representation.
• Long-standing relationships with D&O insurers. Sidley routinely works with all of the major D&O insurers and is panel counsel for the market-leading carriers, including AIG and Chubb. Our close relationships with these insurers reflect their confidence in our ability to effectively and vigorously represent insureds. We also work closely with insurance brokers, and serve as D&O panel counsel for Marsh.

Recognition for our practice

Our lawyers have been consistently recognized for their securities and shareholder litigation work by leading legal directories and publications, including Chambers, The American Lawyer, Benchmark Litigation, U.S. News – Best Lawyers®, LMG Life Sciences, and The Legal 500. Chambers USA has ranked Sidley among the leading firms nationwide in Securities Litigation for seven consecutive years since 2015, with a client noting in the 2021 guide: “They're stellar at what they do.” Benchmark Litigation has ranked Sidley among the top U.S. law firms in Securities in 2021. Sidley’s Litigation group was praised as “built to win” by The American Lawyer, and was a finalist for the publication’s prestigious “Litigation Department of the Year” award in 2020. In its Best Law Firms survey, U.S. News – Best Lawyers named Sidley as the 2015 and 2018 “Law Firm of the Year” in the category of Litigation – Securities; 2020 “Law Firm of the Year” in the category of Securities Regulation; and 2021 “Law Firm of the Year” in the category Litigation – Regulatory Enforcement. In the 2021 U.S. News – Best Lawyers rankings, Sidley earned first-tier national rankings in Litigation for Securities and M&A, as well as first-tier regional rankings for Litigation – Securities in Chicago, Los Angeles, New York City, San Francisco, and Washington, D.C. In 2020, BTI Consulting Group named Sidley a “Standout Litigation Powerhouse” for class action litigation in its BTI Litigation Outlook. According to the legal analytics provider Lex Machina, Sidley is among the top five law firms representing defendants in terms of the number of federal securities cases over the past six years, with a total of 301 cases from 2014 to 2020.

• Successfully represented FUJIFILM Holdings Corporation in connection with several litigation matters relating to a proposed US$6.1 billion merger transaction with Xerox Corp. These matters were highly publicized in the media, including in The Wall Street Journal, Bloomberg, Reuters, Fortune, and Law360.
  
  Prior to Sidley’s engagement in June 2018, the merger transaction had been enjoined by the Supreme Court of the State of New York, and Xerox Corp. then purported to terminate the transaction. In addition to taking an appeal from the injunction orders and defending FUJIFILM against the three class and derivative actions, Sidley filed a new lawsuit against Xerox in the Southern District of New York, alleging breach of the merger agreement. The Appellate Division of the Supreme Court of the State of New York issued a unanimous opinion reversing the trial court’s orders, vacating the injunction, and ordering the dismissal of the claims against FUJIFILM. FUJIFILM’s lawsuit against Xerox in the Southern District of New York led to a highly favorable settlement by which FUJIFILM bought out Xerox’s remaining interest in the joint venture and extracted numerous other concessions.
• Obtained a very significant victory in the U.S. Court of Appeals for the Tenth Circuit, which affirmed the dismissal of claims against Western Union and certain officers in a major securities class action that arose out of the company’s Deferred Prosecution Agreement (DPA) with the U.S. Department of Justice (DOJ) and consent decree with the Federal Trade Commission (FTC) involving compliance with anti-money laundering (AML) and consumer fraud laws, including a payment of US$586 million. The securities class action alleged that the defendants made numerous false or misleading statements regarding compliance efforts in the years leading up to the DPA.
  
  This victory followed another significant victory in the Tenth Circuit on behalf of Western Union’s board of directors, affirming the dismissal of shareholder derivative suits challenging the adequacy of Western Union Board’s oversight of AML and consumer fraud compliance programs leading up to the DPA and FTC consent decree described above.
• Obtained a precedential appellate victory for Cigna and its senior officers in a securities fraud class action that arose out of a regulatory investigation and sanctions issued by the Centers for Medicare & Medicaid Services, the primary regulator of Cigna’s Medicare business. After the company announced sanctions that barred Cigna from enrolling new Medicare Advantage and Part D customers, Cigna’s stock price dropped significantly. Plaintiffs alleged that Cigna and several senior officers had misled shareholders to believe that Cigna was in full compliance with all applicable Medicare-related regulations while it was in receipt of numerous notices of noncompliance, particularly as related to a recent acquisition and the integration of the acquired business. The District Court granted Sidley’s motion to dismiss with prejudice, concluding that plaintiffs had not adequately pled actionable misstatements or omissions, or scienter. In a significant precedential opinion, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal, adopting Sidley’s arguments and holding that generic statements regarding compliance efforts do not invite reasonable reliance and cannot support a claim for securities fraud.
• Served as lead counsel representing the former officers and directors of SunEdison, Inc. in securities litigation, shareholder litigation, and other related litigation arising out of liquidity issues that culminated in the largest renewable energy company bankruptcy in 2016. At the time of filing, SunEdison was the fastest growing renewable energy company in the world and reported assets of over US$20 billion. After its bankruptcy filing, lawsuits were initiated by shareholders of SunEdison, its subsidiary companies, and a failed merger company, which were consolidated under multidistrict litigation in the Southern District of New York. Leading a diverse team of individual defense law firms, Sidley was able to negotiate the resolution of all of these cases within the available insurance.
• Obtained a significant victory in the U.S. Court of Appeals for the Ninth Circuit, which affirmed the dismissal of a putative securities fraud class action against firm client Flex Ltd. and four of its officers. The case was brought after the company announced the termination of a production contract with Nike and the subsequent stock price decline.
• Obtained an affirmance by the Second Circuit Court of Appeals of a decision by a district court denying a motion to file an amended securities fraud complaint against the manufacturers of allegedly defective surgical gowns designed to protect against blood-borne diseases such as Ebola. The case, Jackson v. Abernathy et al., was initially brought against Kimberly-Clark and a former Kimberly-Clark entity, Halyard Health, Inc. and several executives, in the U.S. District Court for the Southern District of New York.
• Achieved a complete victory on behalf of Forterra, Inc. in a US$100 million earn-out arbitration arising from the acquisition of certain building products companies (now known as Forterra, Inc.) by Lone Star Funds, a private equity firm. After years of complex litigation, the neutral accountant ruled that the seller was not entitled to an award after a four-day virtual final hearing. The arbitration followed litigation in the Delaware Court of Chancery in which Sidley successfully moved to dismiss all of the seller’s conduct of business claims. Sidley also represented Forterra in the successful resolution of securities litigation In re Forterra, Inc., in which the plaintiffs sought US$250 million in damages but settled for US$5.5 million (including attorneys’ fees).
• Represented Nektar Therapeutics and its officers in two separate securities class actions involving different class periods and different issues in the Northern District of California. We obtained a decisive victory when the Court dismissed with prejudice the complaint that was based on a short seller report critical of the ongoing clinical trials for one of the company’s leading drug candidates. The second securities class action was filed following a drop in the company’s share price after the announcement of manufacturing issues with Nektar’s leading drug candidate and a change in the scope of a joint collaboration regarding the same drug candidate. The Court granted our motion to dismiss but, rather than amend, these plaintiffs voluntarily dismissed their case with prejudice.