The firm has frequently been called to aid financial institutions in the investigation of investment transactions gone wrong. In one, described by The Wall Street Journal as "one of the more spectacular frauds in recent years," the firm conducted a global investigation on behalf of a major international insurance company of a complex fraud scheme involving the sale of vouchers and options for the privatization of state-owned enterprises in Azerbaijan. Since completion of the investigation, the firm has led the prosecution of fraud claims against the investment banking house which launched the transaction and its principal in courts in the Bahamas, the British Virgin Islands, London, and the United States on behalf of that insurance company, a leading university and an array of investment funds.
Working jointly with investigators, firm attorneys identified approximately $80 million in assets belonging directly or indirectly to the perpetrators. Litigation was launched with a series of asset freeze orders delivered in courts around the world which froze the defendants' assets.
The firm also represented a money center bank in an important arbitration concerning a Canadian bank's acquisition of an ownership interest in our client. This arbitration focused on questions of valuation of collateral held by an escrow agent while the sales transaction was pending. While most analysts gave our client's position short shrift, we prevailed in the arbitration, winning a multi-million dollar award for our client.
The firm prosecuted a series of multinational arbitrations and lawsuits on behalf of several foreign governments and recovered millions of dollars for our clients that had been held in numerous bank accounts.
We are handling an ever-increasing number of lawsuits—and internal investigations—involving violations of federal securities and commodities laws, as well as state shareholder and fraud statutes. The matters involved have spanned a wide range of financial instruments, including common and preferred stock issues, futures contracts, options, corporate and government bonds, notes, partnership interests, derivatives, and swaps. Our practice has included class actions, shareholder derivative suits, and individual claims. Patterson Belknap also has been involved in NASD and Stock Exchange arbitrations and both civil and criminal investigations. For example, we:
- Represented an international oil company in connection with an investigation and potential litigation against major brokerage firms arising out of over $100 million in losses on oil futures trading.
- Counseled a financial services company in threatened litigation relating to the sale of its credit card business for an amount in excess of $1.3 billion by bondholders claiming default triggering acceleration of $1.1 billion of debt.
- Defended a brokerage firm in a class action charging that leases were securities sold in violation of federal securities laws.
- Defended a shareholder derivative suit against a Fortune 500 company that challenged the compensation package given to a departing chief executive officer who had resigned under fire.
Litigating Accounting-Related Matters
Patterson Belknap's trial lawyers are well-versed in complex accounting issues, and we regularly represent clients in accounting-related litigation. The firm handles cases over managed earnings issues, overstated assets, and failure to take adequate reserves. In addition, we have:
- Represented directors of a major communications company in a lawsuit contending that the corporation's assets were overstated.
- Conducted an investigation, on behalf of a cosmetics concern, of potential claims arising out of a multimillion dollar write-down of corporate assets.
- Defended a major bank against charges that its loan portfolios were insufficiently reserved.