Securities/Consumer Fraud
Representative Cases
Waste Management Securities Litigation, 97 C 7709 (N.D. Ill.). The firm was part of the case leadership in a class action alleging securities fraud that was settled for $220 million, the largest such settlement in the Northern District of Illinois. In awarding attorneys' fees, Judge Wayne Andersen stated, "what we want to do is reward very excellent representation, which is what the plaintiffs' counsel have provided to their clients in this particular case."
Abbott Laboratories Securities Litigation, 92 C 3869 (N.D. Ill.). The firm was co-counsel for the plaintiff class in a securities fraud suit that settled for $32.5 million, then the third largest settlement in a class action securities fraud case in the Northern District of Illinois.
Carnegie v. Household International, Inc., H&R Block, Inc., et al., 98 C 2178 (N.D. Ill.). This is a class action case brought under the Federal Racketeering Influence and Corrupt Organizations Act (RICO) on behalf of individuals who, in connection with the processing of their income tax returns by H&R Block, Inc., took what is commonly known as a "refund anticipation loan" ("RAL"). The RAL entitles the taxpayer to secure a loan from a lending partner of H&R Block for the amount of anticipated tax refund less various charges and an interest rate that is often over 100%. As stated by one federal appellate court: "As we see it, an attack on RALs based on fairness and equity would certainly have some appeal." In this case, the Firm and several other law firms opposed a class action settlement that was proposed by the former class counsel in 1999 and successfully appealed to the United States Court of Appeals for the Seventh Circuit to overturn the settlement and remand the case back to the district court for further proceedings. Upon remand, the Firm and its co-counsel were again successful in persuading the district court to reject the settlement and to remove from the case the former class counsel and class representatives and install in their place the Firm and its co-counsel and the client they represent. A nearly $40 million settlement is pending final approval by the Court.
Rosen v. Textron, Inc., 1:02ev190 (RWL) (Dist. R.I.). The firm was co-lead counsel for three affiliated pension and employee benefit funds of the International Brotherhood of Teamsters, Local 710, the lead plaintiff in a securities fraud class action. The complaint alleged that the defendants made material misrepresentations and omitted material facts concerning matters that required accounting adjustments that would have reduced reported earnings nearly a year before the charges were taken. The case settled for $7 million in late 2005.
3Com Securities Litigation, C-97-21083-EAI (N.D. Ca.). The firm was responsible for pursuing key documents from the U.S. Securities and Exchange Commission in a securities fraud class action that was settled for $259 million. The Firm handled multiple subpoenas, FOIA requests and FOIA appeals to the SEC seeking key evidence in the case.
General Instrument Securities Litigation, 92 C 1129 (N.D. Ill.). The firm was part of the case leadership in a securities fraud class action that was recently settled for over $40 million. The Firm successfully compelled General Instrument to produce 400 documents that the company had claimed were privileged. 190 F.R.D. 527 (N.D. Ill. 2000).
Sumitomo Copper Litigation, 96 Civ. 4584 (S.D.N.Y.). The firm was one of the principal counsel for a class of commodity futures option investors in a case involving manipulation of the world copper markets. The case resulted in over $100 million in recoveries for investors in copper futures and options.
Steinberg v. System Software Associates, Inc., 97 CH 00287 (Cir. Ct. of Cook Cty, Ill.). The firm was one of the lead counsel in an Illinois state securities fraud class action which resulted in over $3 million in payments to investors shortly before the company declared bankruptcy.
King v. Blum, 84 C 10917 (N.D. Ill.). This was a securities class action fraud case brought by the shareholders of Advanced Systems, Inc. The complaint alleged that the company failed to correct its public projection of earnings which it allegedly knew was inaccurate within a few months after it was released and attempted to artificially inflate earnings at the end of its fiscal year so that its public projection of earnings would be met. The case involved complex accounting issues. It was settled for $3.9 million.
Grossman v. Waste Management, Inc., 83 C 2167 (N.D. Ill.). This was a securities class action brought by shareholders of Waste Management. The complaint alleged that the company failed to disclose its potential liabilities for violations of environmental regulations governing storage and disposal of hazardous waste materials and thereby caused the price of the stock to be artificially inflated. The case, which involved novel legal theories under Section 10(b) of the Securities Exchange Act of 1934, was settled in 1985 for $11.5 million.
Tabankin v. Kemper, 93 C 5231 (N.D. Ill). This is a securities class action in which it was alleged that the defendant brokerage company failed to recite material risks in a prospectus covering investment in a global money market fund. The settlement consists of $7,500,000 in cash and lifetime exemption from the sales charges associated with investment in Kemper mutual funds.
Gaines v. Sears, Roebuck & Company, 1980 C.C.H. Fed. S. L. Repts. & 97,376 (N.D. Ill. 1980). This was a derivative lawsuit brought on behalf of minority shareholders of a company that was jointly controlled by Sears, Roebuck & Company and Whirlpool Corporation. The case was settled by the payment of approximately $5 million to the minority shareholders of the controlled corporation.
Spicer v. Chicago Board Options Exchange, 88 C 2139 (N.D. Ill.). This was a landmark securities class action against the CBOE in which plaintiffs claimed that the CBOE allowed trading in index options to occur on October 20, 1987 (the day after the 500 point drop in the Dow Jones average) in violation of federal securities laws. The case was settled on the eve of trial for $10,000,000.
Block v. Allstate, 78 L 2637 (Cir. Ct. Cook Cty., Ill.). This was a contract class action in which the defendant was charged with re-rating its insureds prior to policy expiration dates in violation of their insurance contracts. The case was settled for $5 million, which represented 100 percent of the recoverable damages.
Steinberg v. System Software Associates, Inc., 97 CH 00287 (Cir. Ct. of Cook Cty, Ill.). The firm was one of the lead counsel (Messrs. Watkins' and Wylie's prior firm was another) in an Illinois state securities fraud class action which resulted in over $3 million in payments to investors shortly before the company declared bankruptcy.
In re Williams Securities Litigation, 02-CV-72-SPF-FHM (N.D. Ok.). The firm was part of the case leadership in a class action alleging securities fraud that settled for $310 million after the case was fully pre-tried. In a companion securities fraud case that did not settle, summary judgment was granted to the defendants on loss causation issues that had been raised in the settled case.
In re Bank One Secs. Litig., No. 00 CV 00767 (N.D. Ill.) (Andersen, J.). Mr. Watkins' prior firm was counsel for former shareholders of First Chicago NBD challenging Bank One Corporation's 1998 acquisition of First Chicago NBD under Sections 11 and 12 of the Securities Act of 1933 and Section 14 of the Securities Exchange Act of 1934. After defeating motion to dismiss, obtaining class certification, see 2002 WL 989454, at *9, and discovery, in 2005 defendants settled for $120 million, at the time the second-largest securities settlement ever in the Seventh Circuit.