Practices

Securities Enforcement and Corporate Governance Litigation

With experienced and highly regarded litigators well versed in the nuances of securities and corporate governance litigation, an established Chancery Court practice, and a keen understanding of the high stakes at play, Ballard Spahr is equipped to lead complex securities and corporate governance litigation of any size.

Our lawyers advise companies and their officers and directors on every type of securities and corporate governance claim – from derivative actions and regulatory or internal investigations to special committee representations and significant shareholder class actions. Our law firm has the experience to identify and avoid potential obstacles in a case, a demonstrated ability to innovate, and a track record of success in the courtroom and through alternative dispute resolution.

Securities Litigation

We practice before federal and state courts and administrative bodies at the trial and appellate levels. Our attorneys have successfully defeated class certification, obtained dismissals, prevailed on summary judgment, and secured advantageous settlements or defense verdicts for leading clients in jurisdictions across the country.

Our lawyers defend claims brought under the Securities Act of 1933 and the 1934 Securities Exchange Act as well as class and derivative actions alleging breach of fiduciary duty. Our lawyers advise on issues related to allegations of insider trading, false or misleading securities filings or statements, securities fraud, and ERISA-related litigation. And we have the expertise to help clients navigate the regulatory hurdles present in connection with business combination with SPACs (special purpose acquisition companies).

Our team includes former federal prosecutors and the former first assistant director of the Division of Corporation Finance at the SEC – government experience that adds valuable perspective when devising defense strategies and reaching resolution.

Delaware Chancery Court/Corporate Governance Litigation

Most states look to Delaware when applying corporate law principles. The state’s Court of Chancery is the nation’s leading forum for the resolution of business disputes, and most Fortune 500 companies have chosen to incorporate in Delaware. Ballard Spahr is one of the few national law firms with an established Chancery Court practice.

We handle challenges to mergers, acquisitions, and financing transactions, as well as takeover battles, proxy contests, matters relating to change of control, and other issues under Delaware’s corporate and business entity statutes. Our litigators have the experience to anticipate how Chancery Court judges will react and they understand the nuances of cases tried in The First State – insight that is critical for Delaware entities.

In addition, our attorneys have played a leading role in state court cases involving cutting-edge corporate governance issues, including the leading cases in Pennsylvania and Nevada. Our firm litigated one of the first merger cases in Pennsylvania after the landmark Cuker v. Mikalauskas decision – and prevailed in less than two months.

Securities Enforcement

We also represent clients in regulatory proceedings and litigation involving the SEC, state attorneys general, and state securities regulators. If criminal charges are also in issue, we can call upon Ballard Spahr’s noted White Collar/Internal Investigations Group.

Our attorneys have in-depth knowledge of self-regulatory organizations such as the Financial Industry Regulatory Authority (FINRA) and the procedures under which such cases are tried before such bodies. We have successfully tried a number of FINRA cases and are readily able to guide clients through these often expedited and unfamiliar proceedings.

Corporate Governance

We have advised corporations, boards of directors, special committees, and venture capital and private equity firms in investigations of derivative claims. We handle appraisal litigation, including dissenters’ rights, breach of fiduciary duty cases, and we coordinate with Directors and Officers Liability Insurers. We also work with boards of directors and executive committees during internal investigations, coordinating the response to derivative demands and defending against derivative claims that occur alongside allegations of securities fraud.

Special Committee Representations

Our attorneys have advised special committees in a range of industries, assessing the scope and nature of shareholder demands, developing and implementing an investigation plan, analyzing the issues against applicable laws, and recommending actions that are entirely fair and serve the company's best interests.

Our experience ranges from helping special committees address challenges to fundamental corporate transactions—such as mergers and acquisitions—to allegations of misconduct, mismanagement, or conflict of interest. Our special committee team includes lawyers from the firm’s corporate and litigation departments. Clients benefit from the insight of experienced transactional counsel as well as from litigators who have defended board decisions in major shareholder disputes. The team includes former federal and state prosecutors as well as high-ranking lawyers at key regulatory agencies, including the SEC.

Our Clients

Our clients include issuers, corporate officers and directors, firm supervisors and compliance personnel, underwriters, accountants, attorneys, retail brokers, retail and institutional traders, and broker-dealers. They operate in a range of industries, including telecommunications, banking and finance, energy, pharmaceuticals, health care, biotech, real estate, and manufacturing.

Experience

We represented Twitter in its successful enforcement of Elon Musk’s obligation to complete his acquisition of the company for $54.20 a share, an aggregate price of $44 billion. After signing a merger agreement, Mr. Musk reneged, raising various explanations for his refusal to close. Twitter brought an action for specific performance in Delaware’s Chancery Court. Working with Twitter’s lead counsel, Ballard Spahr’s team pursued discovery against more than 100 third-party witnesses, including Mr. Musk’s equity investors and attorneys. Shortly before trial, Mr. Musk announced he would go forward with the deal and obtained a stay of the litigation. On October 27, 2022, Mr. Musk closed the acquisition in accordance with the terms of merger agreement.
We represented an exchange and its board of governors in a lawsuit that arose from a series of transactions in which six major financial institutions acquired ownership interests totaling 89 percent of the exchange. The federal court suit was brought as Rule 10b-5 and Section 29 securities claims on behalf of a purported class of shareholders. We obtained dismissal of the complaint in the federal action, and an appeal is pending. The Delaware Chancery breach of fiduciary duty litigation was settled on the eve of trial.
We defended a national drugstore chain against civil securities multidistrict litigation, SEC and Department of Justice criminal investigations, and ERISA litigation arising out of accounting irregularities that ultimately resulted in a $1.6 billion restatement of the company's financial results. Ballard Spahr persuaded the government to decline any criminal prosecution of the company itself and was able to negotiate settlements of the securities and ERISA class actions and the SEC investigation that were funded in significant part by insurance.

We defended a national financial services company and certain of its officers against a securities fraud class action arising from its off-balance-sheet accounting treatment of volatile and non-performing loans and venture capital assets it had sold to special purpose entities. The plaintiffs expert estimated that the class suffered more than one billion dollars in damages. Ballard Spahr negotiated a settlement pursuant to which our client contributed a fraction of the cost, all of which was covered by its directors' and officers' liability insurance.
We defended an investment company against a business affiliate who sought an emergency injunction barring the close of a friendly tender offer for 40 percent of the stock of a public company. It alleged securities fraud and that the proposed tender constituted an unlawful going-private transaction. The injunction motion was denied after a hearing.
We represented a pension fund in bringing a suit against a major mutual fund complex. The suit was based on the mutual fund's market timing of the investments that it was making in the pension fund. The matter was tried before a blue-ribbon arbitration panel. We achieved an extraordinarily favorable, but confidential, result for the pension fund.
We represented several related financial services companies and several partners of a number of real estate limited partnerships in claims by partnerships and limited partners of self-dealing, fraud, and RICO violations in connection with $125 million sale of assets transactions approved by the partners. We obtained partial dismissal of the claims on a motion to dismiss and settled the remaining claims.
We defended the chairman and vice chairman of the board of a financial services company against allegations that they were tippees of insider information in violation of Rule 10b-5. After the close of discovery, we obtained summary judgment on behalf of each officer.
We defended a wireless communications company and two of its officers against a class action lawsuit alleging, among other things, securities fraud, failure to register securities, breach of fiduciary duty, and alter ego liability. After defeating a motion for preliminary injunction, we obtained a settlement that amounted to a complete victory by our clients.

Recent Regulatory Representations Involving the SEC

A public company retained Ballard Spahr to represent it in an investigation by the Philadelphia Regional Office of the SEC relating to possible insider trading related to the client's acquisition by a private equity group. No action was taken by the SEC.
A public company retained Ballard Spahr to assist in providing the Philadelphia Regional Office of the SEC with information relating to possible insider trading in the stock of the client.
Two investment advisers retained Ballard Spahr to respond to concerns raised by the Philadelphia Regional Office of the SEC during the course of routine compliance examinations. Both matters were resolved without further action.
A national securities exchange retained Ballard Spahr to handle an appeal to the SEC of the exchange's enactment of Rule 651 (concerning reimbursement of legal fees to the exchange for unsuccessful suits brought against it). Upon our motion, the commission dismissed the appeal for lack of jurisdiction.
A major operator of mutual funds retained Ballard Spahr to represent it in connection with requests for documents and interviews of employees by the SEC's Washington, D.C., and New York offices in connection with various investigations into the mutual fund industry.

Securities Enforcement and Corporate Governance Litigation

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