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Overview

Litigators in our complex financial products practice prosecute and defend securities actions of all sorts, including state “blue sky” law claims, Section 10(b), Rule 10b-5, and other federal claims, as well as class and non-class actions and derivative actions. We have also successfully represented leading hedge funds and other financial institutions in litigation against many of the world’s largest investment and commercial banks, such as Citigroup, Bank of America, Deutsche Bank, Wachovia, UBS, and others. In these cutting-edge actions, we demonstrated to institutional investors the value of pursuing actions separate from related class actions to maximize recoveries. Our firm is also one of only a few to successfully secure a jury verdict for securities fraud based on an investment fund’s secondary market securities purchases after an issuer announced poor financial results.

McKool Smith lawyers have extensive experience litigating claims involving RMBS, CMBS, and other structured products, including claims for breach of representation and warranty, common-law fraud, and violation of state and federal securities laws. We were successfully handling “put-back” cases on behalf of investors and securitization trustees long before the financial crisis; after the crisis hit, we formed a nationwide mortgage-backed securities task force consisting of trial lawyers across offices  in New York, Dallas, Houston, and Los Angeles to harness this experience and pursue recoveries for investors. Since then, our litigators have assessed, developed, and prosecuted claims on behalf of some of the largest RMBS investors in the world.

Experience

Representative Matters

Our attorneys’ complex financial litigation experience includes the following matters, among others: 

  • Fontainebleau D&O Suit. Secured settlements totaling more than $115 million on behalf of a group of investment funds in connection with a lawsuit filed against Jeffrey Soffer, the billionaire owner of the Fontainebleau Miami, and other directors, officers, and executives involved in the $2.9 billion failed Fontainebleau Resort and Casino project in Las Vegas, Nevada.
  • Fontainebleau BofA Litigation. Represented approximately 40 investment companies accusing Bank of America of improperly inducing the companies to loan The Fontainebleau Resort project hundreds of millions of dollars, and then improperly teaming up with other banks to cut off their own financing to the resort.  Filed in Nevada, the suit sought unspecified damages and a judicial declaration that the defendant banks have breached their contractual duties under the credit agreement. The matter recently settled for the reported amount of $300 million.
  • Lake Las Vegas Fraudulent Transfer Trust Litigation. Lead counsel for Creditors Trust in action for recovery of $470 million fraudulent transfer arising from transfers from real estate resort prior to bankruptcy that resulted in confidential settlement on eve of trial following 100 depositions.
  • Freddie Mac. Representation of Freddie Mac in litigation against Deloitte in which Freddie Mac alleged more than $1 billion in damages resulting from Deloitte’s flawed audits of Taylor Bean & Whitaker Mortgage Corp. (TBW), which was the largest independent mortgage lender in the United States that collapsed into bankruptcy in 2009. The matter settled on confidential terms in January 2016.
  • US Bank. Representation of US Bank and other corporate trustees in litigation seeking repurchase of over $1 billion in loans from various financial institutions, including Citigroup (six cases), JPMorgan, WMC Mortgage, Nomura, and SunTrust.
  • Pacific Investment Management Company (“PIMCO”), Deutsche Asset Management, and Castlerigg Master Investments. Obtained a significant judgment plus post-confirmation interest in a dispute involving a “no call” provision under a bond indenture for Pacific Investment Management Company (“PIMCO”), Deutsche Asset Management, and Castlerigg Master Investments (Bankr. Ct., S.D. Miss. 2010).
  • Association of Mortgage Investors. Represents the Association of Mortgage Investors as amicus curiae in appeal before the New York Court of Appeals.
  • OCM Opportunities Fund III, L.P. v. Citigroup, Inc., et al.; Pacific Investment Management Co. LLC v. Citigroup, Inc. Pursued two actions in California state court against a number of Enron’s relationship banks for more than $150 million in net principal losses arising from purchases of Enron related notes and securities.
  • Parmalat Litigation.  Pursued claims against Bank of America on behalf of institutional investors Prudential, Allstate, Aegon, Principal and John Hancock, who collectively sustained hundreds of millions of dollars in losses arising from their purchase of Parmalat-backed securities.
  • Rabobank. Prosecuted fraud and other claims on behalf of Rabobank against Royal Bank of Canada (“RBC”) arising from RBC’s and its employees’ involvement in questionable transactions with Enron and SPEs sponsored by Enron.
  • Hicks, Muse, Tate & Furst Incorporated (HM Partners LLC). Represented Hicks Muse, one of the country’s leading private equity investment firms, in defense of a lawsuit filed by Healthco, a dental supply company that went into bankruptcy after being purchased by Hicks Muse. The trustee for Healthco’s bankruptcy estate alleged damages of more than $370 million. After an eight-week trial, a Massachusetts jury found in favor of Hicks Muse on every single claim.
  • Oaktree Capital Management and Trust Company of the West.  Represented plaintiffs in a securities fraud action against CIBC World Markets.
  • Los Angeles MTA v. Lazard Freres. Pursued claims on behalf of the Los Angeles Metropolitan Transportation Authority against Lazard Freres, a Wall Street investment bank, for breach of fiduciary duty and violations of California’s False Claims Act arising out of alleged overcharges by Lazard Freres in a series of advance refundings of municipal bond debt structured by Lazard Freres.
  • Farallon Capital Partners v. Gleacher & Co., Inc., et al. Represented Farallon Capital Partners and Oaktree Capital Management in prosecuting securities fraud claims relating to our clients’ purchase of more than $30 million in bonds backed by a steel company in Thailand.  

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