Newsroom - February 2009

The Litigation Team scored a total victory on behalf of an investment firm in a securities arbitration brought by an investor. The man claimed $20 million in damages (plus $1 million in attorney fees, plus interest and punitive damages) based on alleged fraud, breach of fiduciary duty, negligence, and other legal claims. His basic claim was that our client failed to avoid his losses and maximize his profits on private company stock, which he deposited with the investment firm just days before the company's IPO at $8 per share. Within a couple months after the IPO, the stock was worth over $100 per share. He sold half but then held half as the stock declined in value during and after the Internet stock market collapse. At the hearing, the investor presented 20 witnesses, including his wife (a judge), a law firm partner, an Emory business school professor, a CPA, an investment advisor, a PhD in Economics, two other securities expert witnesses, and six current and former client brokers. The case presented many challenges – deciding how to deal with a judge who appears as a witness for the other side, and preparing for the testimony of our client's key broker, who was no longer with our client. After an eight day arbitration hearing, which proceeded much like a trial, the arbitration panel denied all claims of wrongdoing and denied all claims for damages. David Russell led the successful defense, with very valuable lawyering by Cinnamon Davis, who jumped in at the last minute when Eric Taylor was called away on another matter. Tangela Cooke provided paralegal support.