Financial Products and Services
In this time of increasing market volatility, investors face increasing risk to their securities portfolios. Unfortunately, malfeasant investment banks are finding new ways to market high risk securities as if they were Triple-A rated and secure, putting institutional investors and the whole financial system in harm’s way.
We work hard to stay one step ahead of those individuals and institutions that seek to plunder our clients' assets. When our clients suspect misconduct on the part of institutions with which they have conducted business, our highly skilled in-house investigative team determines if our clients have suffered losses as a result of those improper practices. Armed with the expertise of forensic accountants and former enforcement officials, we are able to quickly assess potential legal claims and bring swift action where merited.
Labaton Sucharow has been recognized nationally for its work on behalf of funds misled by custodial banks in foreign exchange (FX) transactions. In these schemes, when custodial clients purchase or sell securities on a foreign exchange, the custodian banks grossly inflate or deflate exchange rates using an undisclosed spread, thereby profiting to an unfair degree at the expense of its clients. Our Firm is highly knowledgeable in this arena and is currently prosecuting suits arising from these unethical practices.
Residential Mortgage-Backed Securities (RMBS)
Following the 2007 credit crisis, we cultivated a deep knowledge of complex investment vehicles through our successful class action litigation work against now-defunct banks such as Countrywide and Bear Stearns. Armed with this unique experience, Labaton Sucharow led the charge in representing and advising many of the world’s major financial institutions including banks, insurance companies, mutual funds, and pension plans injured by multibillion dollar investments in fraudulently marketed residential mortgage-backed securities (RMBS). Our cases challenged the sale and marketing of more than 400 RMBS; collateralized debt obligations (CDOs); and structured investment vehicles (SIVs). These cases involved more than 100 defendants and collectively sought more than $7 billion in potential damages. Because of their extraordinary complexity, they required a deep understanding of the financial markets and innovative financial products, as well as keen litigation skills.
Opt-Out and Direct Action Litigation
Labaton Sucharow regularly advises institutional investors on whether to opt out of pending securities fraud class actions in favor of initiating their own direct, individual actions against the same defendant. In certain cases, opt-out litigation may provide significant benefits, including:
- Incorporating additional legal claims not available in securities class actions;
- Exercising greater control over the litigation;
- Bringing suit to recover losses from alternative investments, such as in unregistered debt, or from purchases on a non-U.S. exchange, which are not included in the class action;
- Collecting any recovery in a significantly shorter frame time than the class action; and
- Recovering a significant premium over the class action.
Some notable representations include:
- Representing SunTrust Bank, the sixth-largest U.S. bank and largest opt-out plaintiff in In re WorldCom Securities Litigation, and securing a favorable settlement at a significant premium over what our client would have received as a member of the class action.
- Representing various New York City Pension Funds and the New Jersey Division of Investment in an opt-out action from In re Adelphia Securities Litigation, and securing favorable settlements at a significant premium over what our clients would have received as members of the class action.
- Ongoing representation of eight public pension funds bringing English law claims against BP in Texas federal court for securities losses sustained in connection with misrepresentations concerning the Deepwater Horizon disaster.
- Securing agreements tolling applicable statutes of limitation on behalf of numerous clients in connection with potential claims against defendants currently facing a sizable pending securities class action, and providing those clients with ongoing legal consultation as to potential legal strategies to increase their individual recoveries.