Practice Areas & Industries: Pepper Hamilton LLP

Practice Group Overview

We counsel clients on general disclosure and reporting obligations under the Securities Exchange Act of 1934 and sales of securities under the Securities Act of 1933. We continually monitor developments and compliance practices related to corporate governance, and advise audit committees and other board committees on their duties and responsibilities under the Sarbanes-Oxley Act of 2002 , other securities laws and stock exchange listing requirements. The practice group includes veterans of the SEC's Divisions of Corporation Finance, Investment Management and Enforcement.

Services Available

We advise issuers, underwriters, selling stockholders and investment advisers on structuring, negotiating and documenting a wide range of securities offerings, including public offerings and private placements, as well as stock repurchase programs, including ongoing programs and self-tender offers. We also provide advice on the design and implementation of shareholder rights (poison pill) plans, standstill agreements, defensive charter and bylaw provisions, specific strategic and tactical advice, and interpretation and creative use of state statutory anti-takeover provisions.

Our securities lawyers are also experienced in helping clients resist or pursue hostile takeovers, going-private transactions, proxy contests and other unsolicited acquisition attempts. Our team for such matters consists of skilled corporate lawyers and veteran trial lawyers with years of experience in the strategies and tactics used in hostile bids, and who are comfortable in the high-stress, high-stakes atmosphere common to such deals.

In addition, we help structure, negotiate and document venture capital and private equity investment transactions and investment vehicles for domestic and international corporations, financial institutions and entrepreneurs seeking venture capital or private equity, or looking for an investment opportunity.
We seek to build long-term relationships with our clients, and we are dedicated to helping clients achieve their goals without burdening them with undue expense. We build effective transaction teams consisting of Pepper lawyers and representatives of the client, including inside counsel and financial, tax and other advisers.

Securities & Shareholder Litigation

Pepper Hamilton LLP represents major corporations, smaller business organizations and individuals in civil, criminal and administrative proceedings of all kinds, including matters involving securities. Our litigation practice takes us before federal and state courts and administrative agencies in many jurisdictions throughout the United States. We also are experienced in representing clients in investigations and litigation by the Securities and Exchange Commission.

Pepper has an active and diverse securities litigation practice, and we pride ourselves in being selected by AIG/National Union, Chubb, Progressive Insurance Co. and Zurich North America as a member of the panels from which insureds must select counsel in securities cases where those companies are the insurer.

The following cases are representative of Pepper's work involving alleged violations of federal and/or state securities and related laws:

• obtained dismissal of securities fraud class action at pleadings stage in favor of former executives of food product manufacturer and distributor who were alleged to have caused the company to issue financial reports that materially understated its marketing and selling expenses
• obtained summary judgment in favor of major telecommunications company and officers and directors in "fraud on the market" shareholder class action alleging disclosure and accounting improprieties in violation of Section 10(b) of Securities Exchange Act and Rule 10b-5
• obtained partial summary judgment and then verdict following trial on remaining claims on behalf of computer chip equipment manufacturer and officers and directors in securities forecast shareholder class action case
• obtained summary judgment on all claims against law firm brought by investors in small company represented by defendant firm, including Blue Sky claims and issues relating to firm's liability where no statements were made directly to investors; reversed by a panel of the Third Circuit, but rehearing en banc granted and pending
• obtained dismissal of Section 10(b) and Rule 10b-5 claims alleging that publicly traded software company misrepresented financial projections
• obtained dismissal of Section 10(b) and Rule 10b-5 claims against "Big Three" auto maker
• favorable settlement during jury selection of shareholder class action alleging omissions regarding financings in alleged violation of securities laws
• favorable settlement following discovery of shareholder class action against manufacturer of medical device alleging disclosure defects in violation of Section 10(b) and Rule 10b-5 following successful effort to force plaintiffs to answer contention interrogatories and thereby limit theories of recovery
• favorable settlement following discovery of shareholder class action claims against computer reseller alleging financial misrepresentations in violation of securities laws, as well as a derivative action
• represented directors and officers of major computer manufacturer in shareholder class action litigation asserting securities and derivative claims
• favorable settlement of shareholder class claims against national maternity retailer in connection with IPO
• represented global accounting firm in defense of securities class action as well as defense of RICO claims and actions by creditors and putative shareholder class action for failure to detect fraud
• represented communications company and officers and directors in securities class actions relating to corporate restructuring and to issuance of preferred stock and market sales of common stock
• represented global accounting firm in defense of 10b-5 action regarding inventory and good will accounting
• represented telemarketer in defense of Section 10 and Rule 10b-5 claims relating to sales of stock and follow-on accounting issues
• represented 35 charities in joint lawsuit against Prudential Securities in the New Era Ponzi scheme
• defense of diversified holding company and its chairman in three-year SEC investigation
• obtained favorable verdicts for majority shareholder in closely held family business in two cases, enabling them to establish ownership of stock and to recover against surety bond for funds misappropriated by former officers.

The following are representative of matters involving shareholder or similar claims of corporate mismanagement and/or fiduciary breach or professional malpractice:

• defended bank merger involving stock/cash lottery which excluded officers and directors
• represented a major life insurer in policyholder challenge to merger
• represented acquired bank's and manufacturer's officers and directors in cases involving propriety of "lock up" provisions in acquisition agreements
• represented bank in breach of fiduciary duty claim regarding alleged dividend omission issues following a merger
• represented bank in defense of breach of fiduciary duty claims, involving the administration and investment decisions regarding welfare and pension plans
• represented trust company and officers and directors in defense of fiduciary breach claims relating to investment decisions and conduct of transaction unavailable to certain clients
• obtained dismissal of amended complaint in shareholder litigation asserting that a "going public" transaction had been improperly terminated
• represented director of insurance company in action for breach of fiduciary duty asserted by Pennsylvania Insurance Commissioner, and in related proceedings
• represented former officers and directors of savings and loan institutions in litigation instituted by RTC alleging mismanagement
• represented former chief operating officer of utility in shareholder derivative litigation against claims of mismanagement of nuclear power plant
• represented accounting firms against claims of malpractice with respect to acquisition and limited partnership transactions
• represented minority shareholders in forcing buy-out of their interest by majority shareholder refusing to pay dividends and using closed corporation's funds for questionable purposes
• represented clients in the Delaware Court of Chancery in appraisal actions and in action successfully freezing bank accounts of joint venture partner spending joint venture funds for improper purposes.

Securities Enforcement and Litigation

Corporations and corporate employees increasingly are scrutinized by the U.S. Securities and Exchange Commission, self regulatory organizations such as the National Association of Securities Dealers, the U.S. Department of Justice and state agencies. Pepper Hamilton LLP is experienced in counseling and defending clients at every stage of these matters -- from the informal inquiry stage, through the investigation and the "Wells" process, at trial or hearing, and on appeal.

Pepper lawyers guide clients through investigations and litigation involving a wide variety of allegations, including insider trading, improper revenue recognition and other types of financial fraud, market manipulation, mutual fund market timing and late trading, improper sales practices, excessive markups and advisory fees, inadequate supervision of securities professionals and accounting irregularities by corporate executives.

Our clients include broker-dealers, investment advisers, investment companies, publicly and privately held companies, corporate and mutual fund boards (including audit committees and independent directors), banks, insurance companies, and corporate officers and directors, among others.

Representing a client in a securities enforcement investigation presents challenges and requires strategies different from those involved in representing a client in civil litigation or a commercial dispute. Because the mere initiation of an enforcement action by a securities regulator can cause irreparable harm to a client's reputation and business prospects, our attorneys recognize the importance of being proactive and communicating with regulators at the earliest stage of the process. In some instances, early communications can result in convincing the regulator that an enforcement action is not appropriate. If enforcement action cannot be avoided, Pepper lawyers are well-prepared to litigate against the SEC, NASD, DOJ, state agencies and other securities regulators in administrative proceedings and court actions.

In today's enforcement environment, companies often face simultaneous scrutiny from multiple regulatory and law enforcement agencies, which -- sometimes regardless of the outcome of the investigations -- often is followed by civil litigation. Pepper is well-equipped to counsel and defend clients in these parallel proceedings. Our team includes veterans of the SEC, DOJ and other agencies, as well as trial lawyers with many years of experience in civil securities litigation.

We are particularly focused on the concerns of entities, such as broker-dealers and investment advisers, that are subject to regulation and oversight by the SEC or the self-regulatory organizations. We assist clients in understanding and weighing their options, including whether a particular matter should be resolved short of litigation or if the specific circumstances call for principled push-back, including litigation and trial. We also represent broker-dealers and their associated persons in arbitration proceedings brought by individual clients.

Pepper lawyers also have represented public companies, including investment companies (such as mutual funds) and their advisers, in class actions alleging violations of the antifraud provisions of the federal securities laws. In the wake of the mutual fund scandal, plaintiffs' class action lawyers have turned their attention to the $7 trillion mutual fund industry. Pepper lawyers combine experience handling securities class actions with a detailed understanding of mutual fund regulations and operations, making us particularly well-suited to represent investment companies and their advisers in such matters.

Pepper's securities enforcement and litigation clients also gain access to the firm's depth and strength in the investment management industry and corporate and securities matters. Pepper's Investment Management Practice Group includes seasoned veterans of the SEC's Investment Management Division and private industry, who counsel registered investment companies, registered investment advisers and other clients about their obligations under the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002, and related laws and regulations.

Similarly, our 90-lawyer Corporate and Securities Practice Group includes lawyers with SEC experience and knowledge in guiding clients on reporting and disclosure issues, corporate governance, public offerings, mergers and acquisitions, proxy solicitations and other transactions, and all other corporate and securities matters. Our securities enforcement and litigation lawyers team with their peers in these and other practice areas as needed to serve clients most effectively .