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  • Academic Study Recognizes Kessler Topaz Meltzer & Check, LLP

    Academic Study Recognizes Kessler Topaz Meltzer & Check, LLP as a “Top Five” Firm in Merger Litigation

    RADNOR, PA -- (October 20, 2014) - The law firm of Kessler Topaz Meltzer & Check, LLP ("Kessler Topaz" or the “Firm”) has been recognized as a clear leader in a just-released academic study examining the effectiveness of plaintiffs’ law firms in challenging the fairness of M&A transactions.  The study -- conducted by noted professors C.N.V. Krishnam, Steven Davidoff Solomon and Randall S. Thomas, along with input from a number of other academics and Chief Justice Leo E. Strine, Jr. of the Delaware Supreme Court -- examined a sample of 1,739 class actions between 2003 through 2012 and found that the presence of a top plaintiffs’ law firm is significantly and positively associated with a higher probability of lawsuit success.  Kessler Topaz ranked among the top 5 out of 336 law firms listed in at least one suit during the period of the sample.

    The study found that the top 5 plaintiffs’ law firms, in addition to winning more procedural motions and obtaining more substantive settlements, are much more active in terms of the number of documents filed as shown on the docket sheets in their cases.  Within the top five, the study specifically observes that three of those firms, including Kessler Topaz, “actually file relatively fewer cases but yet litigate them to more successful outcomes for shareholders.”  The study concludes that “shareholder class action litigation might be best improved by courts selecting plaintiffs’ law firms with more significant experience, activity and prior success.”

    "We appreciate these authors’ recognition that not all firms behave the same way in litigating M&A cases,” said Firm partner Lee Rudy on the study’s findings.  “While the press talks about the ever-increasing volume of deal cases, our Firm has achieved tremendous results for our clients through careful case analysis and aggressive litigation.”

    Darren Check, Firm partner, added:

    “One of the most important things we stress to our clients, and to potential clients looking to retain counsel in this field, is that we are a zealous advocate for shareholder rights.  Our clients have been responsible for significant results in M&A litigation, and it is because we take a measured approach to case evaluation and selection, and then work extremely hard to ensure that both the price and process of a particular deal ultimately inure to the benefit of the shareholders of the company in question.”

    View the report

    About Kessler Topaz

    Kessler Topaz Meltzer & Check, LLP is one of the largest law firms in the world specializing in complex litigation on a contingent basis. Since the Firm’s founding in 1987, Kessler Topaz has developed a worldwide reputation for excellence in the areas of shareholder, ERISA, consumer, antitrust litigation and whistleblower litigation. The Firm proudly notes that it has recovered billions of dollars on behalf of its clients and the classes they represent.

    More information about the Firm can be found online at


    Darren J. Check, Partner
    Kessler Topaz Meltzer & Check, LLP
    280 King of Prussia Road
    Radnor, PA  19087
    Telephone:  (610) 822-2235
    Facsimile:  (484) 270-1484


  • Titan Of The Plaintiffs Bar: David Kessler

    Titan Of The Plaintiffs Bar: David Kessler
    By Stephanie Russell-Kraft
    Law360, New York (October 15, 2014, 10:58 AM ET) --

    Litigation pro David Kessler has been behind multiple billion-dollar securities settlements, and he has built a nationally renowned — and feared — plaintiffs firm from the ground up, but he is not the best-known Kessler at the firm that bears his name. That title belongs to his mother.

    Kessler referred his mom for a job when he first started as an associate at Schiffrin & Barroway LLP — now Kessler Topaz Meltzer & Check LLP — but she couldn’t type, and the partners decided to look elsewhere. It wasn't until three receptionists later that the gregarious and dynamic Myrna Kessler became one of the office’s most important employees. She worked with him for 15 years until her retirement this past May.

    “Anybody at all that would walk by her desk, she would talk to them,” Kessler, who has recovered billions of dollars for clients, said in a recent interview. “When our firm changed its name to Kessler Topaz, people were pretty convinced it was Myrna Kessler that was on the masthead.”

    Although many people might cringe at the thought of working with their mothers, Kessler said he loved it. There was only one incident, he added — one he remembers “like it was yesterday.”

    “I’m on a conference call with the court, and the judge is asking me a question, and there’s five defense attorneys on the call, and me, and co-lead counsel. And as I’m about to answer the question she stands in my doorway and holds up a pair of pants, and says, ‘Dad doesn’t fit in these anymore, do you want ‘em?’” Kessler said, bursting out with laughter.

    “And I’m just like —,” he stopped, making a stern face and pointing a finger out an imaginary door, before laughing again. “I think that was actually the last time she stepped in my office.”

    Kessler says his mother, whom he describes as perpetually “the most positive person in the room,” was the one who taught him how to communicate, a skill he has drawn on extensively as he worked his way from an accountant to one of the most respected — and well-liked — plaintiffs attorneys of his generation.

    Kessler’s warmth doesn’t change whether he’s in a professional or personal setting, according to Jerry Silk, a partner at Bernstein Litowitz Berger & Grossmann LLP who has spent countless hours with Kessler “in the trenches” of class-action litigation.

    “He’s the same person who he is whether he’s in a deposition or in court or in a more social setting,” Silk said. “He’s that same thoughtful, fair, respectable guy.”

    Whether in small cases or high-profile, multibillion-dollar settlements against Bank of America Corp., Kessler always maintains a strong handle on the facts without ever losing his cool, Silk added.

    “Whatever the situation he’s in, no matter the level of stress, he always seems to stay calm and measured and focus on the important things,” he said.

    In the Bank of America case, that measured approach help Kessler Topaz, Bernstein Litowitz and Kaplan Fox & Kilsheimer LLP secure a $2.425 billion settlement on behalf of investors over losses they suffered in the bank’s 2008 acquisition of Merrill Lynch & Co.

    As that case neared a resolution, Kessler became its overseer, according to Darren Check, a partner at the firm who first began working with Kessler as an associate in 2001.

    “We had a lot of good lawyers, but when it came time to mediate the resolution of the case and to organize the settlement, he was somebody who all three firms looked to as a guiding person to deal with a lot of the issues that had to be dealt with,” said Check.

    Kessler, who co-manages the firm’s securities litigation practice alongside Greg Castaldo, specializes in settlements but also works on the business end of the practice, developing relationships with clients and strategizing with his team members behind the scenes. His brother-in-law, Marc Topaz, oversees the firm’s case initiation and development.

    The eponymous leaders of the firm first met at an overnight camp in their teens but reconnected years later playing tennis. Topaz was a doubles partner with one of Kessler’s colleagues at a previous firm.

    “Gradually we saw each other a lot, and Marc eventually said, do you have any interest in doing what we do?” Kessler recalled. “And I said, well, what do you do?”

    “I came over, looked at what they were doing, and it fit with my background,” he said. “A lot of it had to do with reading financial statements and understanding accounting concepts and things like that."

    After graduating from American University with a bachelor’s degree in accounting, Kessler spent three years working for Arthur Andersen LLP before deciding to go to law school on the advice of a family friend. Although he initially thought he would practice tax law, his time at the now-defunct accounting firm reinforced his view that he didn’t want to be “on the wrong side” of business.

    Kessler soon found that the work Topaz was offering could provide him with a great opportunity to use his skill set while fighting for everyday investors.

    “I’ve always been a little bit democratic, for the little guy,” he said. “My dad owned a shoe store when I was growing up. For 30 years, we had this shoe store in a blue-collar area. That was my roots.”

    The partners, now who both have two teenagers of the same age, spend a lot of time together both at work and with their family in the Philadelphia suburb they call home. Kessler said he relishes atmosphere of his firm, which also feels like a family.

    Kessler Topaz employees have fun together, he said, and their clients value them because of that.

    But that doesn't keep them from working hard. During a time of tremendous expansion and contraction within the plaintiffs bar, Kessler and his partners have managed to build their firm from a boutique shop to a legal heavyweight with nearly 100 attorneys tackling securities, antitrust and consumer class actions on behalf of clients around the world.

    Much of the firm’s growth and development can be attributed to Kessler’s thoughtful and measured guidance, according to Check.

    While Kessler said he won’t hesitate to get in the weeds of a case when needed, he prefers to keep a bird's-eye view on the strategy and economics of the firm’s litigation.

    “If we’re all rolling up our sleeves and we’re with co-counsel, I need to,” he said. “But in other instances, the lawyers in my firm are so much more capable than I am of taking a case from point A to point B. As long as we have a conversation saying this is where point B should be — that’s what I’m good at.”

    Kessler’s hard work on the business end has not gone unnoticed, even by defense attorneys like Scott Musoff, a partner at Skadden Arps Slate Meagher & Flom LLP who met Kessler through a mutual friend after law school.

    Although the two men have sat across the table from each other on several occasions since they first met 20 years ago, Musoff said he has most enjoyed watching Kessler grow the firm’s securities practice group into a “routine player” on the plaintiffs’ side.

    “I think that’s because of his entrepreneurial spirit,” said Musoff. “He wasn’t just going to practice, he wanted to build a practice, and he’s done a remarkable job with that.”

    Click here to nominate an attorney for Law360's Titans of the Plaintiffs Bar series.

    --Editing by Richard McVay

  • Kessler Topaz Meltzer & Check, LLP Again Named One of the Top Securities Litigation Firms in the Nation by SCAS

    Kessler Topaz Meltzer & Check, LLP Again Named
    One of the Top Securities Litigation Firms in the Nation by SCAS;
    Nearly $3 Billion in Recoveries for Investors in 2013

    RADNOR, PA -- (July 30, 2014) - The law firm of Kessler Topaz Meltzer & Check, LLP ("Kessler Topaz" or the “Firm”) has once again been ranked among the top securities class action firms in the United States.

    According to data compiled by ISS's Securities Class Action Services ("SCAS"), Kessler Topaz ranked third in the "SCAS 50" rankings, obtaining nearly $3 billion in recoveries for investors in 2013.

    SCAS has compiled the "SCAS 50," its annual report of the top firms prosecuting securities litigation in the United States, for over a decade and Kessler Topaz has consistently placed at the top of the rankings -- often at or near the top of the list with regard to highest settlement average in addition to total recoveries.
    "We are once again honored to rank at the top of the shareholder litigation field, said Firm partner David Kessler on the SCAS recognition.  “Kessler Topaz remains committed to prosecuting cases for our clients.  The results we have achieved on their behalf are a source of pride for our Firm and the product of the hard work our attorneys, paralegals, investigators and staff put in on a daily basis."

    Darren Check, Firm partner, added:

    “We are proud to be the firm of choice for so many institutional investors, from the smallest municipality or local union pension fund, to the largest U.S. state retirement systems and global investors.  In a crowded field, our clients know they can count on us to provide honest, thorough case evaluation, as well as zealous representation in any shareholder matter -- in any jurisdiction around the world.” 

    View the report at

    About Kessler Topaz

    Kessler Topaz Meltzer & Check, LLP is one of the largest law firms in the world specializing in complex litigation on a contingent basis. Since the Firm’s founding in 1987, Kessler Topaz has developed a worldwide reputation for excellence in the areas of shareholder, ERISA, consumer, antitrust litigation and whistleblower litigation. The Firm proudly notes that it has recovered billions of dollars on behalf of its clients and the classes they represent.

    More information about the Firm can be found online at


    Darren J. Check, Partner
    Kessler Topaz Meltzer & Check, LLP
    280 King of Prussia Road
    Radnor, PA  19087
    Telephone:  (610) 822-2235
    Facsimile:  (484) 270-1484



  • Kessler Topaz Represents Key Whistleblower in Government Settlement with Diagnostic Imaging Company

    Kessler Topaz Represents Key Whistleblower in Government Settlement with Diagnostic Imaging Company

    Doshi Diagnostic Imaging Pays $15.5 Million to Settle Whistleblower Lawsuits Alleging Kickbacks to Referring Physicians, Medicare and Medicaid Billing Fraud

    Kessler Topaz Meltzer & Check, LLP represented a key whistleblower behind the $15.5 million settlement that was announced today between the federal government, the States of New Jersey and New York, and Doshi Diagnostic Imaging Services and Diagnostic Imaging Group ("Doshi"), a major multi-state operator of diagnostic imaging centers.

    The settlement resolves allegations, contained in a qui tam lawsuit, that Doshi paid kickbacks to physicians in exchange for referrals to Doshi's imaging centers. Two other qui tam suits against Doshi, alleging unlawful billing of diagnostic imaging services that were never ordered, never needed or never provided, were also encompassed in the settlement.

    "Health care providers may not pay physicians for referrals, as this complaint alleges," said David Bocian, a former federal prosecutor and head of Kessler Topaz's False Claims Act Litigation and Whistleblower Representation practice group. "Medical referrals are supposed to be based on quality and accessibility of care – not illegal kickbacks."

    Doshi was alleged to have entered into agreements with physicians who were in a position to refer nuclear stress tests to Doshi's facilities. The Complaint stated that the agreements tied physician compensation to the volume of diagnostic imaging referrals that physicians promised to make to Doshi's facilities, in violation of the federal Anti-Kickback statute.

    The qui tam suits were filed under the False Claims Act, which encourages private citizens to fight fraud against the government by bringing a whistleblower law suit. If the government joins the law suit, the whistleblower may receive a monetary reward of between 15 and 25 percent of the recovery.

    Kessler Topaz's Mr. Bocian expressed thanks for the dedication of the U.S. Attorney's Office for the District of New Jersey and officials at the Department of Justice in Washington for "their thorough investigation and resolution of this important case."

    Kessler Topaz specializes in the prosecution of complex litigation on a contingent basis, litigating matters against the largest multi-national corporations and the most sophisticated defense firms. Since the Firm's founding it has recovered billions of dollars for its clients, developed a worldwide reputation for success, and repeatedly been named as one of the nation's most prominent plaintiffs firms.

    KTMC's False Claims Act Litigation and Whistleblower Representation practice group includes former federal and state prosecutors with extensive experience litigating health care, securities, corporate and government contract fraud. The practice group is headed by Kessler Topaz partner David Bocian, who spent more than ten years as a federal prosecutor in the U.S. Attorney's Office for the District of New Jersey, where he was appointed Senior Litigation Counsel and managed the Trenton U.S. Attorney's office. During his tenure, Mr. Bocian oversaw investigations and prosecutions pertaining to government corruption and federal program fraud, federal contractor fraud, commercial and public sector kickbacks, tax fraud, and other white collar and financial crimes, and tried numerous cases in federal court.

    Mr. Bocian has extensive experience in the health care field. He was previously employed in the health care industry, where he was responsible for implementing and overseeing a system-wide compliance program for a complex health system. He also serves as an adjunct professor of law, teaching Health Care Fraud and Abuse to second and third year law students.

  • Court Denies Facebook Motion to Dismiss in IPO Shareholder Litigation

    In re Facebook, Inc. IPO Sec. & Derivative Litig.

    This case is pending before Judge Robert Sweet in the U.S. District Court for the Southern District of New York (hereafter, “Facebook Securities Action”) and is brought on behalf of persons and/or entities who purchased or otherwise acquired the Class A common stock of Facebook, Inc. (“Facebook” or the “Company”) in or traceable to Facebook’s initial public offering (the “IPO”), which occurred on or about May 17, 2012.  Kessler Topaz represents co-lead plaintiff Banyan Capital Master Fund in the action.

    The Consolidated Class Action Complaint (“Complaint”), filed on February 28, 2013, brings claims against Facebook, Inc. (“Facebook), its Chairman and Chief Executive Officer Mark Zuckerberg, certain of its current seniors executives, its directors, and the  underwriters of its $16 billion IPO (collective, “Defendants”) under Sections 11, 12 and 15 of the Securities Act.  This case arises from one of the largest and most anticipated initial public offerings in history, reaping more than $16 billion in proceeds. 

    Prior to the IPO, Facebook’s repeatedly represented in its initial registration statement with the SEC (the “Registration Statement”) that a key factor influencing the value of Facebook’s stock was its ability to generate large and rapidly growing amounts of revenue through its core advertising business—its principle source of revenue.  In the time leading up to the IPO though, Facebook determined that two developments within its core advertising business had materially impaired its ability to generate revenue.  First, there was an ongoing shift in the way that users accessed Facebook (i.e., users were increasingly accessing Facebook through mobile devices instead of through traditional desktop computers).  This was incredibly problematic because while Facebook displayed large amounts of advertising to its desktop users, it displayed (and was only able to display) much less advertising to its mobile users.  Second, Facebook had made certain “product decisions”—such as the decision to reduce the number of advertisements per page that Facebook displayed to its users—which was exacerbating the deterioration of Facebook’s ad revenue.

    In light of these developments, Facebook filed an amended Registration Statement in which it misleadingly represented that these two factors “may” negatively affect revenue and financial results.  At the same time, however, Defendants made no less than nineteen calls to the underwriters of the IPO, explaining that the two factors had, in fact, already materially impaired Facebook’s revenue and financial results for the second quarter and year (information it had not provided to investors), and that, as a result, Facebook had sharply lowered the revenue estimates it had given them in preparation for the IPO and valuing of Facebook’s common stock.  Shortly thereafter, the IPO took place, Facebook stocked opened at $38.00/share and quickly rose to around $42.00/share.  Over the course of the next few days, however, as news of the decline in Facebook’s revenue began to emerge, the stock plummeted, falling as low as $34.03/share, a decline of nearly 11% from the IPO price.

    The gravamen of the Complaint is that the Defendants issued a Registration Statement and Prospectus for the IPO which contained materially false and misleading statements and/or failed to disclose information concerning, among other things, the aforementioned the deleterious impact that increasing mobile usage and Facebook’s product decisions had had on its revenues, while selectively disclosed such information to certain investors in the IPO via the IPO underwriters.  Defendants filed a motion to dismiss on April 30, 2013 (“Motion”).  Oral argument was held, and the motion was marked fully submitted, on October 8, 2013.  On December 12, 2013, Judge Sweet issued an Opinion and Order denying Defendants’ Motion.  See In re Facebook, Inc. IPO Sec. & Derivative Litig., MDL 12-2389, 2013 WL 6665399 (S.D.N.Y. Dec. 12, 2013) (“Opinion”).  The following is a brief summary of certain key findings made in the Opinion.

    First, Judge Sweet held that the Complaint sufficiently alleged that Facebook violated its disclosure obligations under Item 303 of Regulation S–K by failing to disclose:  (1) that known trends relating to increasing mobile usage and certain product decisions had material impacted the Company’s revenues; and (2) the magnitude of that impact.  Id., at *18.  Judge Sweet explained that because Facebook allegedly knew of the certainty of the trends in mobile usage, the “generalized and indefinite terms” used in the Registration Statement to describe the mere possibility of these trends and their impact failed to constitute a sufficient trend disclosure under Item 303.  Id.  Judge Sweet further concluded that even if Defendants had sufficiently identified the trends, Item 303 was nonetheless violated because Defendants did not disclose the extent increasing mobile usage would affect the Company's overall revenues “at a time this trend was already affecting the Company's revenues as a result of the Company's product decisions.”  Id.

    Next, Judge Sweet ruled that Plaintiffs adequately alleged a material misrepresentation based on Defendants’ purported risk warning statements that mobile use of Facebook “may” have a negative impact on revenues, when in fact such mobile use already had (or was having) such an impact.  Id., at *21-24.  Because Defendants’ statements were therefore alleged to be misstatements of present fact, they were not mere opinions related to the “possibility” of a negative impact, as Defendants contended.  Id. at *24.  Indeed, even if these statements could be construed as forwarding-looking projections under the securities laws, Judge Sweet concluded the Complaint adequately pled that the Registration Statement contained false information that Defendants, at the time they filed the Registration Statement, knew to be inaccurate, thus rendering the statements actionable.  Id., at *23.  Judge Sweet further held that because these statements concerned Facebook’s revenue and advertising revenue, which the Registration Statement “repeatedly highlighted” as Facebook’s most significant financial metric, these statements were sufficiently material.  Id., at *25.  

    On January 10, 2014, Defendants filed a motion to amend and certify Judge Sweet’s Order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), contending that the Order is at odds with the SEC’s disclosure structure and existing Second Circuit authority.  Plaintiffs vehemently disagree, and intend to file an opposition to Defendants’ motion in the immediate future.  Plaintiffs will shortly commence Class and merits discovery in this action. 

  • Kessler Topaz Gets Final Approval of $500 million Settlement With Countrywide For Purchasers of Mortgage Backed Securities

    Kessler Topaz Gets Final Approval of $500 million Settlement With Countrywide For Purchasers of Mortgage Backed Securities

    On December 5, 2013, the Honorable Mariana R. Pfaelzer of the District Court for the Central District of California entered an order approving a $500 million settlement and plan of allocation jointly proposed by the parties in the Luther v. Countrywide Fin. Corp., No. 12-cv-5125 (C.D. Cal.) (“Luther”),1  Western Conf. of Teamsters Pension Trust Fund v. Countrywide Fin. Corp., No. 12-cv-5122 (C.D. Cal.) (“Western Teamsters”) and Maine State Ret. Sys. v. Countrywide Fin. Corp., No. 10-cv-00302 (C.D. Cal.) (“Maine State”) actions (the “Actions”).  The settlement marks the resolution of a six year old litigation on behalf of purchasers of Countrywide mortgage-backed securities, acquired in connection with 429 offerings from March 12, 2004 through August 7, 2013 (the “Settlement Class”), that were offered pursuant to materially false and misleading offering documents.

    The approved plan of allocation allocates:  65 percent of the Settlement proceeds ($325 million) to Settlement Class members who purchased certificates in the 58 tranches that were purchased by the named plaintiffs, including Kessler Topaz’s clients, who litigated the Luther Action (“Category One”); 25 percent of the Settlement proceeds ($125 million) to Settlement Class members who purchased certificates within the 111 tranches purchased by the named plaintiffs in all Actions, but were dismissed or subject to dismissal under the court’s prior standing and statute of limitations rulings (“Category Two”); and 10 percent of the Settlement proceeds ($50 million) to Settlement Class members who purchased any of the other remaining tranches in the 429 offerings  (“Category Three”).
    In approving the settlement and plan of allocation, the court commended the efforts of plaintiffs and their counsel throughout the complex history of the Actions, especially Luther, which was the first MBS action filed after the financial crisis in 2007.  During the subsequent six years of litigation, Luther was twice removed from California state court to federal court, dismissed by the California state court, and successfully appealed to both the Court of Appeals of the Ninth Circuit and the California Court of Appeals.  According to the court, the years of litigation “generated several notable state and federal court decisions.”  The court also noted that, “[p]laintiffs’ [c]ounsel have over the last six years persisted through numerous adverse rulings at both the state and federal levels and litigated issues of first impression in the Ninth Circuit and in California state court to maintain the viability of their claims.”

    Turning to the merits of the settlement and creation of the Settlement Class, the court determined that certification of the proposed Settlement Class was appropriate because, inter alia: (1) the Settlement Class was sufficiently large; (2) questions of law or fact common to the class existed with respect to whether the defendants violated the federal securities laws and whether the offering documents misrepresented material facts about the securitizations at issue; (3) the named plaintiffs and all settlement class members shared common arguments regarding Countrywide’s abandonment of underwriting standards; and (4) the named plaintiffs and their counsel did not have any conflicts of interest with members of the settlement class.  In discussing this final consideration, the court commented that plaintiffs’ counsel “vigorously prosecuted the [Actions] on both the state and federal level over the last six years” and also “consistently and zealously argued” on behalf of the Settlement Class.  The court concluded that “the advocacy of [plaintiffs’ counsel] was the best possible chance of obtaining any recovery” for the weaker claims within the Settlement Class.  With respect to the plan of allocation specifically, the court found that plaintiffs’ counsels’ involvement of a retired federal judge in developing the plan and the former judge’s conclusion that the plan was fair to all class members provided structural assurances of fairness sufficient to overcome any purported conflict of interest. 

    The court next engaged in an analysis of the fairness, reasonableness and adequacy of the Settlement.  Noting that settlements are afforded a presumption of fairness when they are reached through arms-length negotiations, the court found that such a presumption was appropriate here because the Settlement was reached “through the efforts of experienced counsel following two full-day mediation sessions and various telephonic negotiations facilitated by Professor Eric Green, a mediator with experience in resolving MBS class action disputes and other complex litigation.”  The court also found that the factors typically considered in determining whether a settlement is fair, reasonable and adequate weighed in favor of final approval of the Settlement.
    In addressing the size of the settlement, the court emphasized that the Settlement was one of the 25 largest securities class action settlements of all time and was the largest MBS class action settlement to date.  The court also noted that the settlement “easily surpasses” the next largest MBS settlement, which totaled $315 million.  With respect to the experience and views of counsel, the court recognized that the “expertise and capability of counsel on both sides are beyond reasonable doubt” and also noted that the named plaintiffs fully supported the Settlement.  Finally, the court found that the reaction of the class members to the Settlement was overwhelmingly positive as the claims administrator mailed 52,833 copies of the notice to potential claimants and received only 117 requests for exclusion from the settlement and only two objections filed on behalf of 37 entities.  Notably, the Court denied the limited objections in their entirety on its way to approving the settlement. 

    1 The Washington State Plumbing & Pipefitting Pension Trust v. Countrywide Fin. Corp. action that Kessler Topaz filed in 2008 was subsequently consolidated with the then existing Luther v. Countrywide Home Loans Servicing LP action. 


  • Judge Allows Bank of America Shareholders' Claims to Proceed

    RADNOR, PA — August 1, 2011  On Friday, July 29, 2011, District Judge P. Kevin Castel of the United States District Court for the Southern District of New York sustained federal securities fraud claims brought by shareholders and investors of Bank of America Corporation (“BoA”) arising out of its $50 billion acquisition of Merrill Lynch & Co., Inc. (“Merrill Lynch”) in the midst of the financial crisis. 

    Plaintiffs, which include State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System, the Teacher Retirement System of Texas, Stichting Pensioenfonds Zorg en Welzijn, represented by PGGM Vermogensbeheer B.V., and Fjärde AP-Fonden, alleged that BoA and Merrill Lynch, along with certain officers and directors of both companies, including Kenneth Lewis, BoA’s CEO, and Joseph Price, BoA’s CFO, issued a series of materially false and misleading statements to shareholders and investors in connection with the merger.  Specifically, Plaintiffs alleged that these defendants misrepresented Merrill Lynch’s financial position by failing to disclose that the company had suffered tens of billions of dollars in losses during the fourth quarter of 2008.  Plaintiffs also alleged that the defendants failed to disclose a secret agreement between the companies allowing Merrill Lynch to pay up to $5.8 billion in bonuses to its executives and employees in December 2008 notwithstanding these losses.

    Last summer, Judge Castel upheld Plaintiffs’ fraud claims related to defendants’ failure to disclose the secret bonus agreement.  On Friday, he also sustained Plaintiffs’ loss-related claims against BoA, Lewis, and Price.  Specifically, Judge Castel found that “plaintiffs have alleged with particularity that BofA received ongoing updates on Merrill’s finances,” including its rising loss figures for the fourth quarter of 2008, and that Lewis and Price were at least reckless in failing to make appropriate disclosures regarding these losses to BoA shareholders and investors.

    Co-Lead Counsel Kessler Topaz Meltzer & Check, LLP, Bernstein Litowitz Berger & Grossmann LLP, and Kaplan Fox & Kilsheimer LLP are pleased that the Court has upheld the central allegations in this matter, and look forward to the commencement of discovery.  Co-Lead counsel views Judge Castel’s ruling as a major victory not only for BoA shareholders and investors, but for shareholders of all companies involved in major corporate transactions.  For more information please visit


  • Judge Sustains Claims of Former Shareholders of Now-Defunct Lehman Brothers

    Judge Sustains Claims of Former Shareholders of Now-Defunct Lehman Brothers

    NEW YORK, NY and RADNOR, PA — July 27, 2011  Today, in one of the most significant class action lawsuits to arise out of the financial crisis, District Judge Lewis A. Kaplan sustained, in large part, claims asserted by former Lehman Brothers shareholders in a federal securities action related to the company’s 2008 collapse.  In a 106-page opinion, Judge Kaplan of the United States District Court for the Southern District of New York held that plaintiffs had sufficiently alleged federal securities claims against former officers and directors of Lehman Brothers, including former CEO Richard S. Fuld and former CFO Erin Callan, Lehman’s auditor, Ernst & Young, and fifty-one underwriters that assisted Lehman Brothers in issuing billions of dollars in now-worthless securities to the investing public prior to its bankruptcy.

    Plaintiffs, which include Alameda County Employees’ Retirement Association, the Government of Guam Retirement Fund, the Northern Ireland Local Government Officers’ Superannuation Committee, the City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, and the Operating Engineers Local 3 Trust Fund, had alleged, among other things, that the defendants materially misrepresented Lehman’s financial position through the use of “Repo 105” transactions, and made material misstatements and omissions regarding Lehman’s risk exposures and risk management systems.

    Judge Kaplan found that Lehman’s use of “Repo 105” transactions, which the company used to artificially improve its reported capital position by temporarily removing assets from its balance sheet at quarter-end, “paint[ed] a misleading picture of the company’s financial position at the end of each quarter.”  He also found that the defendants’ repeated statements regarding the “strong” and “conservative” nature of Lehman’s risk management systems were materially false and misleading “given the allegations of frequent, significant departures from Lehman’s internally stated policies.”

    Co-Lead Counsel Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP are pleased that the Court allowed shareholders’ core allegations in this matter to proceed, and look forward to proving the allegations in the Complaint. Co-Lead Counsel views the Court’s decision as an important victory for shareholders whose investments were decimated by Lehman’s demise.

    Press Inquiries:
    Kessler Topaz Meltzer & Check, LLP:
    Darren Check, Esquire
    (610) 822-2235
    Press Inquiries:
    Bernstein Litowitz Berger & Grossmann LLP:
    David Stickney, Esquire
    (858) 720-3182

    Steven B. Singer, Esquire
    (212) 554-1413

  • Jury Finds BankAtlantic Lied To Stockholders Over Risky Loans

    Jury Finds BankAtlantic Lied To Stockholders Over Risky Loans
    Jury verdict in rare securities fraud case; Barroway Topaz represents institutional investor plaintiffs; award cites bank’s failure to disclose extent of troubled real estate loans and false statements.

    MIAMI/NEW YORK (November 18, 2010) –  In a rare courtroom trial of a securities fraud class action, a federal jury in Miami has awarded a group of institutional investors a verdict finding securities fraud against BankAtlantic Bancorp, Inc. and two senior officers for lying about and failing to disclose the extent of risk in its troubled loan portfolio in 2007.  This is the first securities class action case arising out of the financial crisis to go to jury verdict. The jury found that investors overpaid by $2.41 per share between April 26, 2007 and October 26, 2007 which resulted in millions of dollars in damages for the class.

    Investors were represented jointly at trial by leading plaintiffs’ law firms Labaton Sucharow LLP and Barroway Topaz Kessler Meltzer & Check LLP.   Labaton Sucharow represented State-Boston Retirement System, lead plaintiff in the federal class action lawsuit.  Barroway Topaz represented Erie County Employees’ Retirement System as co-class counsel.

    This was only the 12th securities fraud class action to go to trial since passage of the historic Private Securities Litigation Reform Act in 1995 – the vast majority of such cases settle before reaching a courtroom. The PSLRA allowed institutional investors to serve as lead plaintiffs in federal securities actions. It is believed that this is the second successful plaintiffs verdict in a securities class action case led by a public pension fund.

    During the four-week trial, investors accused Ft. Lauderdale-based BankAtlantic of serial misrepresentations and omissions regarding the extent of the high risk loans in its so-called “land loan” portfolio – those made for acquisition and development of residential buildings in Florida – between October 2006 and October 2007.  Prior to trial, Southern District of Florida Judge Ursula Ungaro ruled that four statements made by BankAtlantic Chairman and CEO Alan Levan about the health of the bank’s land loan portfolio were false.  Levan made those statements on a July 2007 conference call with investors, four months after writing an internal email admitting, “I believe we are in for a long sustained problem in this sector.”

    “We’re gratified the jury held BankAtlantic and its senior management accountable for misleading investors and causing millions of dollars of losses,” said Labaton Sucharow partner Mark Arisohn, plaintiffs’ lead trial attorney.  “BankAtlantic knew of the high risk that was growing in its loan portfolio but for a year lied to its stockholders about the extent of that risk.  Florida citizens on the jury sent a message by finding the defendants committed securities fraud. Banks and their management cannot intentionally mislead their stockholders about the extent of lending risk,” added Arisohn.

    The jury also was shown extensive e-mails from a BankAtlantic lending manager, who described the bank’s major loan committee as “asleep at the wheel.”  In one communication about a loan, the executive wrote, “I hate these deals and think the MLC is blinded by GREED and focused only on [interest] rates…We never analyze the risks up front, only on the downside, when the learning curve is steep and most expensive.”

    In an email dated November 30, 2007, the lending manager wrote:  “We all have problems when we make loans … but being this dishonest and hiding the problems so long until you can’t any longer, is cause for termination and borderline criminal.”

    “The trial opened a most revealing window into fundamentally dishonest reports BankAtlantic made to its stockholders about the riskiness of its land portfolio,” said Barroway Topaz partner Andrew Zivitz, who along with partner Matthew Mustokoff shared trial duties with the Labaton Sucharow firm. “The jury’s award represents a clear rebuke for the bank’s deceitful  disclosure practices. But it’s also an historic success for investors who were victimized by the bank’s behavior.”

    Labaton Sucharow also represented investors in litigation alleging securities law violations by Countrywide Financial Corporation, one of the largest providers of consumer housing loans prior to the bursting of the housing bubble.  The $624 million proposed settlement in that litigation is the second-largest securities settlement of 2010.  

    Barroway Topaz is currently representing a group of U.S. and European pension funds in a shareholder class action in federal court in New York against Bank of America related to its purchase of Merrill Lynch, one of the most significant shareholder cases currently before the Court. 

    The full case caption for the BankAtlantic case is, In re BankAtlantic Bancorp, Inc. Securities Litigation (No. 07-61542 S.D. Fla.).