In a 2013 class action lawsuit, Susman Godfrey represented investors who were allegedly defrauded into purchasing securities issued by the parent of mortgage lender IndyMac Bank. The complaint alleged that IndyMac had misrepresented its financial health and the quality of its lending practices: Plaintiffs contended that IndyMac’s misrepresentations caused the value of its stock to be overinflated, resulting in substantial financial losses to plaintiffs when the institution’s true financial health was later revealed and the value of the securities plummeted. In January 2013, after more than five years of intense, hard-fought litigation, the court granted final approval of a $6.5 million recovery for the class.
In May 2011, Susman Godfrey settled a securities fraud case on behalf of Texas Instruments against Citigroup, Bank of New York Mellon, and Morgan Stanley. Texas Instruments sought rescission and monetary damages for $523 million of auction rate securities it purchased from the defendants. Susman Godfrey filed suit in Texas state court and defeated the defendants’ attempt to remove the case to federal court. Susman Godfrey pursued the case aggressively through the end of fact discovery, at which time all defendants entered into confidential settlements.
Susman Godfrey represented the shareholders of Dendreon Corporation, a publicly traded biotechnology company, in a securities fraud lawsuit arising from alleged misrepresentations by a Dendreon executive during a conference call with investors. The case settled in 2011, just one month before trial, for $16.5 million.
In August 2007, Susman Godfrey successfully represented a certified class of shareholders in a securities fraud action against Genzyme Corporation challenging the propriety under the federal securities laws of its elimination of the “tracking stock” of one of its divisions. The case settled in August 2007 with Genzyme agreeing to pay $64 million to the class. Susman Godfrey served as co-lead counsel for the class along with Boies, Schiller & Flexner and Kaplan Fox.
In November 2005, The Hon. T. John Ward entered judgment approving $94 million in settlements in the Fleming Securities Class Action Litigation. Susman Godfrey handled this litigation along with Berger & Montague, P.C. The litigation began in late 2002, with fifteen different securities class action lawsuits against Fleming Companies, Inc. At the time, Fleming was one of the largest food wholesalers in the United States. After MDL proceedings and the appointment of lead counsel, Fleming declared bankruptcy and thereafter was liquidated. Plaintiffs pursued claims against former directors and Fleming’s officers, Fleming’s auditor, and underwriters of one of Fleming’s public offerings. In June 2004, the Court largely denied motions to dismiss and set the cases for trial in March 2006. Over the course of 2005, the class negotiated separate settlements with each of the defendants. As a result of the litigation, the class recovered $73 million.
In February 2005, Susman Godfrey settled a securities fraud case against Waste Management, Inc. The firm represented shareholders who opted out of a federal class action settlement. On behalf of the opt-out shareholders, Susman Godfrey filed suit in Texas state court and developed theories of liability and evidence that had evaded the federal class plaintiffs and every other group of opt-out plaintiffs in the country. A few weeks before trial, Susman Godfrey settled the case for more than 40 times what the opt-out clients would have received in the class action settlement. At Waste Management’s insistence, the actual amount of the settlement is confidential.
In 2002 and 2003, Susman Godfrey obtained settlements in federal court in Chicago involving now-bankrupt wire distributor Anicom, Inc. Susman Godfrey served as lead counsel for a joint prosecution group, including the State of Wisconsin Investment Board (on behalf of a shareholder class), the Anicom bankruptcy estate, and Anicom secured lenders. These shareholders and creditors accused the accounting firm of acting recklessly by certifying the company’s financial statements during the years leading up to its January 2001 bankruptcy-court filing. PricewaterhouseCoopers LLP agreed to pay $21.5 million to resolve the lawsuits. According to the October 29, 2002, Wall Street Journal, the “payment is among the larger settlements to date over an alleged audit failure by PricewaterhouseCoopers.” Certain officers and directors agreed to settle the case against them with over half of the amount paid by individual defendants rather than out of D&O insurance.