CAROLYN G. NUSSBAUM

Carolyn Nussbaum is a member of the Financial Services and Securities Litigation team and Co-Chair of the Securities and Corporate Litigation team. Her background includes representation of clients in disputes arising out of various commercial relationships, particularly shareholder disputes and securities litigation. Ms. Nussbaum also handles complex contract litigation involving, among other commodities, financial interests, mortgage derivatives, distributorships, and franchises.

She has defended issuers, directors and officers, brokers, and brokerage houses against direct and derivative claims of fraud, negligence, racketeering, Sarbanes-Oxley violations, breaches of fiduciary duty, and related ERISA claims in federal and state courts, before arbitration panels, and in enforcement proceedings brought by the Securities and Exchange Commission. She has a proven track record of obtaining dismissal of complex claims on preliminary motions. She has substantial experience arbitrating and litigating broker-customer disputes, from motions through confirmation proceedings. She has also successfully litigated stockholder derivative actions and partnership and corporate liquidations and dissolutions, in both state and federal courts.

As part of her representation of business clients, Ms. Nussbaum has litigated transactional controversies, including disclosure and fiduciary claims by shareholders as well as post-transaction valuation and indemnification controversies, and represents banks and other financial institutions in the defense of fraudulent transfer, preference, consumer, and lender liability claims.

Ms. Nussbaum frequently counsels clients and lectures on issues of compliance, disclosure, directors’ and officers’ liability, and loss prevention. She has represented financial institutions in complex litigation of national scope. These multifaceted disputes engendered bankruptcy and investor litigation, with substantial lender liability claims, and were resolved with successful workout and restructuring negotiations. In each of these cases, Ms. Nussbaum successfully obtained dismissal of all federal securities claims against lenders on preliminary motions.

Ms. Nussbaum has also represented franchisors before arbitration panels and in the courts, successfully defending against claims by franchisees and obtaining relief to protect and enforce franchisors’ rights, including emergency relief to restrain the post-termination use of intellectual property.

Ms. Nussbaum has lectured on federal litigation, discovery, procedure, and trial practice and spoken before many chapters of the International Association for Financial Planning on risk management. She has spoken to the American Bar Association Forum on Franchising on the duties of disclosure in the franchise field, and also served as an instructor for the National Institute of Trial Advocacy.

Representative Cases

• Corning Incorporated v. Freight Revenue Railway of Miami, Inc., 2012 U.S. Dist. LEXIS 69337 (W.D.N.Y. May 17, 2012) (dismissing corporations for defamation)
• Ozbakir v. Scotti, 2011 U.S. Dist. LEXIS 13490 (W.D.N.Y. February 10, 2011) (dismissing RICO and state law fraud claims against client)
• Klein v. Chase, 2010 U.S. Dist. LEXIS 53866 (W.D.N.Y. June 1, 2010) (dismissing ERISA and contract claim against financial institution employer by former employee).
• Xerox Corporation v. Arizona Digital Products, 2009 U.S. Dist. LEXIS 84015 (W.D.N.Y. September 14, 2009) (denying motion to dismiss certain contract and intellectual property claims against former sales agent).
• McDowell Research Corporation v. Tactical Support Equipment, Inc., 2009 U.S. Dist. LEXIS 80884 (W.D.N.Y. September 4, 2009) (dismissing counterclaims against purchaser).
• In re Bausch & Lomb ERISA Litigation, 2008 U.S. Dist. LEXIS 106269 (W.D.N.Y. December 12, 2009) (dismissing in their entirety ERISA claims by putative class alleging company stock was an imprudent investment for retirement plan).
• Premium Mortgage Corporation v. Equifax Info. Services, 2008 U.S. Dist. LEXIS 76279 (W.D.N.Y. September 30, 2009), aff’d, 2009 U.S. App. LEXIS 21762 (2d Cir. October 5, 2009) (dismissing claims against credit reporting services as pre-empted by the Fair Credit Reporting Act).
• Eastman Kodak Company v. Wachovia Bank, N.A., 2007 U.S. Dist. LEXIS 61283 (W.D.NY. August 21, 2007) (denying motion to dismiss fraud claims).
• Eastman Kodak Company v. TeleTech Service Corporation, 2007 U.S. Dist. LEXIS 50139 (W.D.N.Y. July 11, 2007) (granting clients motion to dismiss counterclaims of detrimental reliance and promissory estoppel).
• In re Bausch & Lomb Inc. Securities Litigation, 2008 U.S. Dist. LEXIS 92034 (W.D.N.Y. Nov. 13, 2008) (granting defendants’ motion and dismissing securities fraud claims, in their entirety and with prejudice, against company and eleven individual defendants alleging multiple false statements related to restatement of three years of financial reports and product recall).
• Novartis Pharmaceuticals Corp. v. Bausch & Lomb, Inc., 2008 U.S. Dist. LEXIS 92133 (D.N.J. Nov. 13, 2008) (granting defendant’s motion and dismissing defamation, tortious interference, and misappropriation claims against client)
• Pinchuck v. Zarrella (N.Y. Sup. Ct. Monroe Co., 2006/06377, March 30, 2007) (dismissing on motion shareholder derivative claims against board alleging directors breached their fiduciary duties by failing to inform themselves of circumstances leading to product recall).
• In re Eastman Kodak Company Securities Litigation, 2006 U.S. Dist. LEXIS 79879 (W.D.N.Y. 2006) (securities fraud claims against issuer and its directors and officers dismissed in their entirety on motion).
• Miller v. Allaire, 2006 Conn. Sup. LEXIS 1575 (Sup. Conn. 2006) (derivative claims against Xerox Corporation and its officers and directors dismissed on motion).
• In re Corning Incorporated Securities Litigation, 2004 U.S. Dist. LEXIS 8741 (W.D.N.Y. 2004), aff'd, 2005 U.S. App. LEXIS 5259 (2d Cir. 2005) (granting defendants’ motion and dismissing securities fraud claims against company and its officers under the Securities Act and Securities Exchange Act in their entirety)
• United Republic Ins. Co. v. Chase Manhattan Bank, 2002 U.S. App. LEXIS 14426 (2d Cir. 2002) (successfully defended dismissal of multimillion fraudulent transfer, racketeering, and fraud claims)
• Crowley v. Corning, Inc., 234 F.Supp. 222 (W.D.N.Y. 2002) (dismissing ERISA claims challenging continued offering of sponsor’s stock as an investment option).
• John Hancock Life Ins. Co. v. Wilson, 254 F.3d 48 (2d Cir. 2002) (litigated arbitrability of securities claims under NASD Code of Arbitration)
• Brimo v. Corporate Express, Inc., 2000 U.S. App. LEXIS 25381 (2d Cir. 2000) (successfully defended dismissal on motion of securities claims against public company).
• Lowe v. Salomon Smith Barney, 206 F.Supp. 2d 442 (W.D.N.Y. 2002) (obtained dismissal of securities fraud claim based on allegedly fraudulent analyst report).
• Pesino v. Atlantic Bank, 244 Conn. 85 (Sup. Ct. Conn. 1998) (upholding right of financial institution to multimillion-dollar settlement of securities fraud and lender liability claims).
• Dodds v. Cigna Securities, Inc., 12 F.3d 346 (2d Cir. 1993), cert. denied, 1994 U.S. LEXIS 2709 (1994) (affirming dismissal of securities fraud claims and establishing new law on interpretation of limitations periods.)

Publications

Ms. Nussbaum has published several articles and book chapters, including:

• “New York Court of Appeals affirms limited duties for banks in counterfeit check scams—and provides a cautionary tale for lawyers,” Nixon Peabody Banking and Financial Services Litigation Alert, February 6, 2012.
• “The Newest Deputies on Wall Street: Private Citizens—Private Actions No Longer Precluded under New York's Martin Act,” Nixon Peabody Banking and Financial Services Litigation Alert, December 28, 2011.
• “Second Circuit clarifies standards for "stock drop" cases,” Nixon Peabody ERISA Fiduciary Law Alert, October 21, 2011.
• “Supreme Court narrows the scope of persons who can be directly liable under Rule 10b-5 for “making” untrue statements of material fact,” Nixon Peabody Securities Litigation Alert, June 17, 2011.
• “Supreme Court rejects Fifth Circuit's requirement that securities fraud plaintiffs prove loss causation at the class certification stage,” Nixon Peabody Class Action Alert, June 8, 2011.
• “SEC adopts final whistleblower rules: implications for internal compliance, governance and employment policies,” Nixon Peabody Securities Law Alert, May 27, 2011.
• “U.S. Supreme Court declines to adopt bright-line rule that adverse drug reaction reports are not material unless they are statistically significant” Nixon Peabody Securities Litigation Alert, March 28, 2011.
• “Court decisions hint at approval of forum selection clauses in corporate bylaws,” Nixon Peabody Corporate Responsibility Alert, February 1, 2011.
• “New Developments in Securities Litigation: The Impact of Recent Supreme Court Decisions on Securities Litigation,” Aspatore, 2010.
• “ADR Update,” 2012, 2011, 2010, 2009, 2008, 2007, and 2006 Annual Review of Developments in Business and Corporate Litigation, American Bar Association, Business Litigation Committee of the Business Law Section.
• “New York Court of Appeals affirms in pari delicto doctrine to prevent lawsuits against outside advisors,” Nixon Peabody Banking and Financial Services Alert, October 27, 2010.
• “Merck & Co. Inc. et al. v. Reynolds, et al., Case No. 08-905, U.S. Supreme Court, April 27, 2010,”Nixon Peabody Securities Litigation Alert, May 11, 2010.
• “Two recent New York court decisions end litigation between New York Attorney General and Richard Grasso, former NYSE chairman,” Nixon Peabody Corporate Responsibility Alert, July 11, 2008.
• “Good hygiene for special litigation committees,” Nixon Peabody Class Action Alert, July 10, 2008.
• “Second Circuit holds that a plaintiff may plead corporate scienter in securities fraud suit without pleading scienter of any specific individual defendant,” Nixon Peabody Securities Litigation Alert, July 7, 2008.
• “Supreme Court holds that parties may not agree to expand grounds for vacating or modifying an arbitration agreement under Federal Arbitration Act,” Nixon Peabody Alternative Dispute Resolution Alert, April 1, 2008.
• “Supreme Court refuses to extend implied private right of action in Stoneridge v. Scientific Atlantic,” Nixon Peabody Securities Litigation Alert, January 16, 2008.
• “Strong words: the Supreme Court defines the statutory requirement to plead a ‘strong inference’ of scienter in securities fraud complaints,” Nixon Peabody Securities Litigation Alert, June 25, 2007.
• “Practice Insights,” UCC sections 2-602, 2-606, 2-607, 2-702, 2-703, 2-705, 2-708, NY Cons. Laws Serv., Mathew Bender & Co., Inc. (2006) (available online through Lexis).
• “Dabit Demystified: U.S. Supreme Court Rules on SLUSA,” The Daily Record, April 24, 2006.
• “Decision in Walt Disney Shareholder Derivative Suit Criticizes But Protects Compensation Decisions of Directors under Business Judgment Rule,” Nixon Peabody Corporate Responsibility Alert, August 17, 2005.
• “Finding Shelter in the Storm: Safe Harbor for Forward-Looking Statements,” Recent Developments in Shareholder Litigation and Related Government Enforcement Initiatives, New York State Bar Association, June 9, 2005.
• “Alternative Business Structures for the Franchise System,” American Bar Association Forum on Franchising, October 2000.
• “Duty to Disclose Purchase or Sale Activity,” co-author, American Bar Association Franchise Law Journal, Vol. 18, No. 2 (Fall 1998).

Speaking Engagements

Ms. Nussbaum is a regular speaker on securities litigation, corporate governance, and ethical issues at industry and legal events, including:

• “Current Issues in Securities Law,” Monroe County Bar Association, October 6, 2010.
• “Ethics Update,” Women’s Bar Association, the State of New York, Annual Convention, 2010, 2007, 2006, 2005.
• “Electronic Evidence,” 2010 Evidence Institute, Monroe County Bar Association, March 2010.
• “Commercial Division Update,” New York State Bar Association, Commercial and Federal Litigation Section, April 2007. 
• “Privilege and Ethics—Developments in Corporate Law,” National Association of Women Lawyers Mid-Year Meeting, February 2007.
• “Risk Management for Financial Professionals,” Financial Planners’ Association Convention, May 12, 2006.
• “After Disney: Directors’ Duties,” Association of Corporate Counsel, Rochester Chapter, November 2005.
• “Dissolution of Business Entities,” New York State Judicial Institute, September 29, 2005.