D&G Law

Securities Fraud Class Actions: Partial List

When it makes the most sense for our clients, whether individuals or financial institutions, we may pursue securities fraud claims through class actions in federal court. Guin Stokes & Evans attorneys have been serving as Lead Counsel in securities class actions for several decades, and have been at the forefront of the development of much of today’s governing law – including the Private Securities Litigation Reform Act, which encourages participation in class action securities cases by institutional investors.

Some of our securities fraud class actions have included:

In re HealthSouth Securities Litigation (N.D. Ala.)

Guin Stokes & Evans served as Liaison Counsel for the HealthSouth bond investors and represented Bondholders on the Federal HealthSouth Steering Committee. See Order of Appointment.  The Retirement Systems of Alabama was Lead Plaintiff for purchasers of HealthSouth corporate bonds. A $445 Million class action settlement on behalf of both stock and bond investors was reached in 2009 with HealthSouth, certain of its former directors and officers, and certain of its insurance carriers. Bondholder Plaintiffs later obtained additional settlements with UBS (the Company’s investment bankers) for $100 million, and with Ernst & Young (the Company’s auditors) for $33.5 million. The total recovery for bond investors alone now stands at about $230 million, plus a share of the $100 million “fair funds” recovery obtained by the SEC and a share of amounts recovered from company founder and CEO, Richard Scrushy, pursuant to the judgment obtained in the state derivative litigation.

Judge Karon Bowdre, United States District Judge for the Northern District of Alabama, said the following about Guin Stokes & Evans, LLC (under our former name, Donaldson & Guin, LLC) and their co-counsel when certifying their case on behalf of the Retirement Systems of Alabama to proceed as a class action:

Bondholder Plaintiffs’ counsel are also qualified, experienced and able to vigorously conduct the proposed litigation. Bondholder Plaintiffs’ counsel have extensive experience in securities and class action litigation and have successfully prosecuted numerous complex actions on behalf of injured investors across the country. In the six years since these consolidated cases were filed, Bondholder Plaintiffs’ counsel have filed an initial and two amended complaints, defended a series of motions to dismiss and motions for summary judgment brought by various Defendants and based on complex legal theories under the federal securities laws, and conducted extensive discovery. Moreover, counsel negotiated a successful partial [$445 million aggregate] settlement with HealthSouth and certain former officers and directors of the Company. Bondholder Plaintiffs’ counsel have vigorously prosecuted this litigation and will continue to do so. The court finds that the class representatives and their counsel will “adequately prosecute” this case. Memorandum Opinion Certifying Bondholder Class, at 19 (Sept. 30, 2009)

 In a later hearing approving $133.5 million in additional settlements, Judge Bowdre contrasted the work of Guin Stokes & Evans, LLC and their co-counsel with that of counsel in some other complex cases she had overseen, explaining:

 And I just want to commend all of you for the way that you have conducted the case. … [Bondholder Counsel] have proved to me that there are ways to conduct complex litigation with lots of lawyers involved and to do so in a professional manner. And I appreciate that very much. Transcript of July 22, 2010 fairness hearing, at 55:2-13.

In re Vesta Securities Litigation (N.D. Ala.)

Vesta’s Principal Accounting Officer retained Guin Stokes & Evans, LLC to advise her regarding her responsibilities under the securities laws prior to disclosure of certain accounting treatments. Our firm guided her through the disclosure process, and when lawsuits were filed, we were able to obtain her dismissal from the litigation by demonstrating that she had acted appropriately at all times.

In re MedPartners Securities (“TAPS – Threshold Appreciation Price Securities) Litigation, (N.D. Ala)

Guin Stokes & Evans was appointed by the court to serve as Liaison Counsel in the federal litigation for a class of purchasers of MedPartners’ TAPS (Threshold Appreciation Price Securities). The lawsuit alleged that the Company misrepresented information regarding the integration of its acquired physician practices in violation of the Securities Act of 1933, and was settled in the state court proceedings during 1999.

In re “2 Connect Securities Litigation (Circuit Court of Jefferson County, Alabama).  Guin Stokes & Evans served as Lead Counsel in this settled securities class action.

Hosea v. The Managers Fund, L.P. et al., No. 3:94CV01650 (JBA) (D. Conn.)

Guin Stokes & Evans served as Lead Counsel in this securities class action brought under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act, against a mutual fund and its advisors regarding the fund’s investments in exotic mortgage derivatives.

In re Comptronix Securities Litigation, (N.D. Ala.)

David Guin was Lead Counsel in this well-known securities class action that is often used as an example of financial fraud in auditing textbooks. See “Behind a Small Alabama Company’s Sudden Fall,” The New York Times, December 4, 1992, “Comptronix Can Do No Wrong, Can It? Guntersville Asks,” The Wall Street Journal, December 4, 1992; and numerous other newspaper articles.  See also In re Comptronix Securities Litigation, 831 F.Supp. 1563 (N.D. Ala. 1993).

Hynes v. The Enstar Group, Inc., et al., CV 90-T-1204-N (M.D. Ala.)

David Donaldson served as Lead Class Counsel in this securities fraud class action alleging that Enstar’s stock price was artificially inflated as a result of defendants’ failure to disclose kickbacks paid by Drexel Burnham Lambert, Inc. and Michael Milken to officers of the company to induce them to purchase Enstar junk bonds underwritten by Drexel, which would create the appearance of a market for such bonds and permit Milken and Drexel to manipulate the price of their junk bonds; See “City Law Firm Scoring Wins In Big-Stakes Securities Cases,” The Birmingham News, August 23, 1993).

Presidential Life Insurance Co. v. Milken, 92 Civ. 1151 (S.D.N.Y).

David Donaldson was co-counsel for a class of claimants who obtained a $4.1 million award in 1997.

United Municipal High Income Bond Fund v. Patriots Point Development Authority.

David Guin was Lead Class Counsel representing a mutual fund and others in this action filed on behalf of purchasers of tax exempt muiniciple bonds. See 772 F. Supp. 1565 (D. S.C. 1991).

Mashburn, et al v. National Healthcare, Inc., et al., 684 F. Supp. 679 (M.D. Ala. 1988).

David Guin represented a class of stock and debenture investors in this securities fraud case for the fraudulent initial registered offerings of common stock and debentures in 1985 and 1986. Judge Joel Dubina, who now serves on the Eleventh Circuit Court of Appeals said the following about plaintiffs’ counsel in his opinion approving a classwide settlement:

Each attorney is experienced to handle cases of this complexity. They all have excellent reputations in the legal community and possess the level of competence, perseverance and commitment to litigate such complex cases to successful conclusions, as demonstrated by the results achieved in this case.

Id., at 699.  See additional published opinion at 684 F. Supp. 660 and related article at The Wall Street Journal, p. 2, col. 1, Sept. 4, 1987).

In re Kenbee Securities Litigation.

David Donaldson was a member of the Plaintiffs’ Steering Committee in this class action on behalf of investors in 114 limited partnerships that financed the construction of Wal-Mart facilities. The case resulted in a structured settlement worth up to $97 million.

The South Carolina National Bank v. Stone (Skylyn Hall Retirement Center municipal bonds), 139 F.R.D. 325 (D. S.C. 1991); 139 F.R.D. 335 (D. S.C. 1991); 749 F.Supp. 1419 (D. S.C. 1990); see related article at “An Expensive Free Lunch,” Forbes (Jan. 25, 1988).  David Guin and David Donaldson were Lead Class Counsel in this case involving defaulted tax-exempt municipal bonds.

Ayers v. Sutliffe, and Randolph County Fed. Sav. & Loan v. Sutliffe, (S.D. Ohio) (First Humanics municipal bond litigation), [Transfer Binder] Fed.Sec.L.Rep. & 96,552 (S.D. Ohio 1992).  David Guin and David Donaldson were class counsel in this RICO and securities fraud class action brought on behalf of purchasers of 21 separate municipal bond issues over a 32 year period to finance the acquisition of nursing homes, and which operated as a massive Ponzi scheme; jury verdict against Deloitte & Touche accounting firm and other defendants after a seven week trial for twelve counts each of securities fraud, RICO and common law fraud; one of the first cases to use novel “paperless trial” techniques to display all documentary exhibits, transcripts and videotaped testimony on computers throughout the courtroom. See “Reach for the Sky,” Forbes, (August 17, 1992)

Pearson v. Keller, (W.D. Ark.).  David Donaldson and David Guin were Lead Trial Counsel in this securities class action tried to a judgment in U.S. District Court in Arkansas.  Donaldson and Guin obtained full relief (including attorney fees) for the class at trial; see class certification opinions condensed in 12 Class Action Reports 30-31 (Jan/Feb 1989)

Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 111 S.Ct. 2773, 115 L.Ed.2d 321, 59 USLW 4688, Fed. Sec. L. Rep. P 96,034 (1991). David Guin filed an amicus brief for the Bond Investors’ Association in this case determining the limitations period appropriate for claims brought pursuant to Rule 10b-5 and Section 10(b) of the Securities Exchange Act.

Freeman v. Laventhol & Horwath, 34 F.3d 333, 63 USLW 2132, Blue Sky L. Rep. P 74,059, Fed. Sec. L. Rep. P 98,326, 1994 Fed.App. 258P (6th Cir. 1994).  David Guin was class counsel in this municipal bond fraud class action.

In re Ross Cosmetics Sec. Litig. (D. S.C.)

David Guin served as Class Counsel in this securities class action involving a scheme to artificially inflate the trading price of Ross Cosmetics securities.

In re T2 Securities Litigation (N.D. Ga.)

David Guin was Class Counsel in this securities class action involving fraudulently inflated prices of common stock.

In re OPTI, Inc. Securities Litigation (N.D. Cal.)

David Guin was one of Class Counsel in this fraud-on-the-market common stock case.