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Securities Enforcement & Litigation

For more than a decade, stock market bubbles, financial fraud, and the economic turmoil that has resulted from the issuance and trading of complex financial instruments have elevated public and political demand for the regulation of capital markets to a level unprecedented in the last 80 years. The Securities and Exchange Commission (SEC), state securities authorities, self-regulatory organizations, and federal and state prosecutors have been aggressive in bringing civil, administrative, enforcement, and criminal actions with extremely high stakes for both corporations and individuals alike.

The Dodd-Frank, which has expanded the ability of the SEC to bring cases against people not directly or knowingly involved in wrongdoing, is one example of the aggressive enforcement of securities laws not likely to subside anytime soon.

Our lawyers have tried to successful conclusion cases alleging public company financial fraud, insider trading, and stock manipulation. We assist companies and individuals dealing with a broad range of enforcement issues – on both the federal and state level – that are a fact of business life. Our team includes alumni of the SEC and former prosecutors and public defenders. These attorneys are highly experienced and skilled in all phases of the enforcement process, including investigations, negotiation with securities regulators, and trial.

Not all enforcement cases are brought by the government. Private rights of action allow individuals who have experienced financial loss to act as private attorneys general in the enforcement of securities laws. In these instances, we have a proven record of success in defending against class, derivative, and individual actions, whether brought in federal or state court, or in FINRA arbitration.

Representative Matters

  • Make a Difference Foundation, Inc. v. Hopkins, et al. In this derivative lawsuit, DGS represented the independent directors of Oilsands Quest, Inc., a company with headquartered in Calgary, Canada. The plaintiff asserted claims for breach of fiduciary duty, waste, and unjust enrichment in connection with an announced disposition of certain assets by the company. After extensive motion practice, the case was favorably resolved.
  • Britton v. Delta Petroleum, et al. DGS represented Delta in a securities fraud/breach of fiduciary duty action which alleged that on eight occasions between 1996 and 2003, certain directors and officers backdated or otherwise manipulated stock options to ensure their profits, and failed to disclose those actions. We promptly filed a motion to dismiss and successfully stayed discovery pending resolution of this motion. After the third attempt by Plaintiff to plead his claims, the trial court dismissed the Second Amended Complaint with prejudice.
  • The Sorkin, LLC v. Fischer Imaging Corp. The plaintiffs in this case initiated a putative class action lawsuit shortly after the company announced a multi-year restatement of its financials. Based on that restatement and the allegations of 18 confidential witnesses, they filed a 90-page complaint. All claims against the company were dismissed based on the legal argument that the core allegations had not been sufficiently pled.
  • In re Ultimate Electronics, Inc. DGS represented a publicly traded corporation and its officers and directors in a class action lawsuit brought under the state securities laws and fraud claims. In that lawsuit, the plaintiffs alleged that purchasers of an $80 million secondary-stock offering were misled due to inadequate disclosures in the prospectus. The defendants vigorously denied those allegations. Through motion practice, plaintiff’s claims and scope of discovery were significantly pruned back, which facilitated a successful resolution of the case.

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