Financial Services Litigation

Our approach

From the volatility in the credit markets to the evolving law and regulations applicable to those markets, the past several years have been challenging for those in the banking and financial services industry.

This is especially true for any company facing a financial dispute—when resolution based on the client’s needs and timing is often just as important as the monetary amounts at stake. In today’s environment when disputes arise, a holistic approach is essential.

While we are veteran trial lawyers who are experienced in helping businesses navigate the many nuances involved in complex financial services litigation, we also understand the financial elements of a client’s business and recognize the implications that long protracted disputes may have on company performance. We understand that early, cost-effective resolution through mediation or other forms of ADR may be the preferred course as opposed to active litigation.

We bring a no-surprises approach to our matters and work closely with each client to craft a solution that works for their business and helps them manage to the bottom line.

We work with

Financial service institutions including insurance companies
Banks
Regulators
Public and private companies
Broker dealers

Representative Experience

First Community Bank v. First Tennessee Bank, et al., No. E2012-01422-COA-R3-CV (Tenn. Ct. App. May 14, 2013).
Defended nine pairs of issuer/co-issuer defendants in a securities fraud case brought by a Virginia-based community bank involving alleged losses in excess of $100 million relating to investments in a total of nine different CDO issuances backed by pools of “trust preferred” securities. All claims against our 18 clients were dismissed for lack of personal jurisdiction and for failure to state any claim upon which relief could be granted. The plaintiff appealed the Court’s entry of judgment, and on August 20, 2013, the Tennessee Court of Appeals affirmed the dismissal of all claims against our clients.
In re Pacific Bancorp Securities Litigation, No. CV09-06501 RGK (PLAx), (C.D. Cal.).
Successful defense of investment bank in Rule 10b-5 class action brought by purchasers of shares in bank holding company. Allegations included misrepresentation in the issuance of analyst reports. Prevailed on motion to dismiss. Also represented investment bank in related shareholder derivative litigation, from which client was dismissed.
IPofA West 86th Street 1, LLC, et al. v. Morgan Stanley Mortgage Capital Holdings, LLC, U.S.D.C. Southern District of Indiana, Cause No. 1:09-cv-00573-SEB-DML.
Represented a lender, as the defendant, in a case arising out of the sale of a $7.1 million commercial real estate mortgage loan to 20 borrowers, who owned the mortgaged property as tenants-in-common (TIC). Plaintiffs alleged claims of breach of contract and conversion and sought punitive damages. Plaintiffs sought to characterize one of the lender’s standard practices, netting out funds due and owing between the parties in a loan sale transaction, as a statutory conversion of funds, which entitled plaintiffs to punitive damages. The lender prevailed on its cross-motion for summary judgment and the breach of contract and conversion claims were dismissed. Summary judgment was upheld by the United States Court of Appeals for the Seventh Circuit.

Kilgore v. KeyBank National Association, 718 F.3d 1052 (9th Cir. April 11, 2013) (En banc).
Representing Keybank as lead counsel in a putative class action brought by individuals who had received student loans from the bank to attend a helicopter flight academy that ultimately went bankrupt. The plaintiffs alleged violation of California’s Unfair Competition Law in connection with the student loans they received from KeyBank. Other lenders had settled a similar class action involving the same school for more than $100M. After prevailing on the merits in a California Federal District Court, KeyBank pressed a threshold issue on appeal—that under the Federal Arbitration Act, the arbitration and class waiver provisions of the bank’s promissory notes mandated arbitration of plaintiffs’ claims. Plaintiffs argued that California’s Broughton/Cruz “public injunction” rule mandated judicial resolution of their claims. But the Ninth Circuit, first a three-judge panel and then the full en banc court on rehearing, agreed with KeyBank that the bank’s arbitration clause must be enforced in accordance with its terms regardless of the California law. The Ninth Circuit upheld KeyBank’s arbitration and class waiver provisions rejected arguments of unconscionability. The case was remanded to the District Court with instructions to dismiss the federal lawsuit.
Massachusetts Mutual Life Ins. Co. v. DLJ Mortgage Capital, Inc. et al., No. 11-cv-30047 (D. Mass); Massachusetts Mutual Life Ins. Co. v. Credit Suisse First Boston Mortgage Sec. Corp. et al., No. 11-cv-30048 (D. Mass).
Representing Credit Suisse entities and executives as co-counsel in two actions brought by the Massachusetts Mutual Life Insurance Company against issuers, sponsors and underwriters of residential mortgage-backed securities. The plaintiff is seeking rescission and/or damages under the Massachusetts Uniform Securities Act for approximately $110 million of purchased securities. The Credit Suisse defendants moved to dismiss the complaints in their entirety for failure to state a claim for relief. In February 2011, Judge Michael Ponsor largely granted the motion, dismissing all claims against the individuals and all claims against all but one of the Credit Suisse entities. The parties are currently in discussions regarding discovery issues.
Romano v. Kazacos No. 08-6187 and Lawton v. Isabella, 08-6190, (W.D.N.Y., 2d Circuit).
Represented financial advisors as defendants in motions to dismiss two complaints initially brought in state court alleging fraud and breach of fiduciary duty. The district and appellate courts affirmed the dismissal of claims by a putative class of more than 1,000 retirees who claimed they were misled into taking early retirement after having been given deceptive financial projections by their former financial advisors. The court determined that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) precluded the plaintiffs’ state law claims.
U.S. Bank Nat’l Assn., as Trustee v. Black Diamond CLO 2005-1 Adviser, L.L.C., No. 11 CIV 5675 (JSR) (S.D.N.Y.).
Successfully prosecuted on behalf of a corporate trustee from inception to conclusion (including an appeal later dismissed) in less than a year a complex interpleader action concerning the use of funds for investments in connection with a billion dollar collateralized loan obligation.

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Media Clips

Area experts react to Congress’ revision of Dodd-Frank Act

Rochester Business Journal | July 20, 2018

Rochester Complex Commercial Disputes partner Carolyn Nussbaum is quoted in this article analyzing the impact of changes to the Dodd-Frank banking law and the Consumer Financial Protection Bureau.

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Contacts

Tina B. Solis

Partner
Leader, Financial Services and Alternative Investment

tbsolis@nixonpeabody.com

Phone: 312-977-4482

Richard A. McGuirk

Partner
Deputy Leader, Financial Services and Alternative Investment

rmcguirk@nixonpeabody.com

Phone: 585-263-1644

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