Practice Areas

Howard Rice has one of the leading securities and financial services litigation practices in the country. Our practice group specializing in this complex area of law includes eight directors who have handled hundreds of class and derivative actions all across the country, numerous regulatory actions and internal investigations, and who have tried dozens of cases/arbitrations for investment banks and broker-dealers.

Our practice includes almost every type of representation that arises from the securities, investment banking and commercial banking business. We represent public companies, special committees and audit committees of boards of directors, directors and officers, underwriters, investment and commercial banks, broker-dealers, hedge funds, accounting firms, mutual funds, venture capital firms and private equity firms.

Our directors have been lead defense counsel in more than 200 securities class actions, have defended nearly 300 securities class actions, and have tried some 100 arbitrations for brokerage and investment banking firms. We are one of the firms that executives turn to when they face liability on cutting-edge legal issues. Recently, in matters relating to options backdating, we represented companies, audit committees of boards of directors, and large numbers of individual officers and directors at numerous companies. These engagements included internal investigations, defense of class and derivative actions, and other parallel investigations/proceedings before the SEC, DOJ and the DOL.

Howard Rice brings a combination of expertise and cost-efficiency to internal investigations, including designing and organizing the investigation, gathering and reviewing electronic communications, protecting privileges and, where appropriate, providing recommendations concerning remediation such as drafting new policies and procedures or personnel changes. Along with our Corporate and Securities attorneys, we regularly counsel clients on how to prevent litigation and regulatory proceedings. We advise our public company clients on appropriate securities law disclosure to investors, analysts and the press. We also provide guidance to our clients on corporate governance issues, including defense of hostile takeover offers and proxy contests, response to derivative demands, and compliance with the Sarbanes-Oxley Act and the corporate governance rules of the New York Stock Exchange and NASDAQ.

If a case proceeds to trial, we have an exceptional track record. We are one of the few firms in the country that has taken a securities class action to jury trial and won a defense verdict that was upheld on appeal. We are also one of the few firms that has prevailed against the SEC in an administrative law trial.

We have special expertise in the area of directors’ and officers’ insurance. We provide expert counseling on the terms and conditions of these insurance policies to ensure that companies and their directors and officers have made the best choices, with the most safeguards, to maximize the chances that D&O coverage is available should securities litigation be filed or a regulatory matter commenced. When companies, officers and directors are sued, our working relationships with D&O carriers and their counsel ensure a superbly coordinated, cost efficient defense.

Our trial and arbitration defense record for the securities industry is without equal. Over the past two decades our clients have included both full service and discount brokers, clearing firms, investment advisors, hedge funds, and investment banks in defense of customer claims and employee disputes involving allegations of unsuitability, churning, failure to hedge, failure to supervise, fraud, breach of fiduciary duty, limited partnership failures, wrongful termination, compensation disputes, and a variety of other claims. We have tried arbitrations before FINRA, NASD, NYSE, AAA, JAMS and the PCX throughout the United States.

National Expertise

Howard Rice lawyers have defended securities and financial services cases throughout the United States. Although based in San Francisco, our practice is national in scope, reflecting our experience, the excellence of results we have delivered and the cost efficiency of our services. The blue shaded states below reflect the many venues where our lawyers have been retained.

 Areas of Focus

• Securities class actions
• Derivative shareholder actions
• Merger and acquisition litigation
• Corporate internal investigations
• Regulatory investigations and enforcement actions
• Broker-dealer defense
• Hedge fund and investment advisor defense
• Counseling on disclosure, corporate governance and D&O insurance

Our Lawyers

Our lawyers are nationally recognized by the leading D&O carriers, professional organizations and their peers as leaders in their fields. Collectively, they have published over 300 articles on securities litigation issues. They are frequent lecturers at the most prestigious legal and business education programs, including the Stanford Law and Business Schools, the American Bar Association, the American Law Institute, the Securities Regulation Institute, the Directors’ and Officers’ Professional Liability Society and the Practising Law Institute, among others.

Our lawyers have served as the chairs of various American Bar Association committees and task forces on securities litigation issues, as advisors to the NASDAQ Stock Market, and as advisors to the Securities and Exchange Commission on a report to the President and Congress.  

Recent Representative Engagements

Securities Class Actions

The following is an abbreviated list of companies that Howard Rice attorneys have defended in class action litigation: Adaptec; Ascend Communications; Adobe Systems; Alex, Brown & Sons; Altera Corporation; Apple Computer; Artisoft; Asante Technologies; Bank of America; Bay Networks; The Boeing Company; Brooktree Corp.; Catalyst Semiconductor; The Cerplex Group; Charles Schwab & Co.; Charles Schwab Mutual Funds; Cisco Systems; Citigroup Global Markets, Inc.; Coastcast Corp.; Cowen & Company; Cygne Designs, Inc.; Dean Witter Reynolds; Discreet Logic, Inc.; Edward D. Jones & Co.; Emulex Corp.; ENCAD; Everex Systems; Everen Securities; FileNet Corp.; First Security Bank; The Fleming Companies; The Gap; Hambrecht & Quist; Insurance Auto Auctions; Iwerks Entertainment; Kleiner Perkins Caufield & Byers; Media Vision Technology; Merrill Lynch & Co.; Microelectronic Packaging; Morgan Stanley & Co.; MTI Technology; Montgomery Securities; Needham & Company; Network Equipment Technology; Oak Technology; ODS Networks; Olicom A/S; OrthoLogic Corp.; Pacific Gas & Electric; P-Com, Inc.; PaineWebber; Piper Jaffray; Qlogic Corp.; Prudential Equity Group; Prudential Securities; Raymond James & Associates; Red Brick Systems; Sevin Rosen Funds; Siebel Systems; Salomon Smith Barney; Smith Micro Software; STB Systems; Stephens, Inc.; Sun Microsystems; Sutro & Co.; Symmetricom; TA Associates; 3Com Corp.; TouchStone Software; Tripath Technology Inc.; Tucker Anthony; Van Wagoner Mutual Funds; Volpe, Brown & Whalen; Wells Fargo Bank; Wells Fargo Funds Management; and Wessels Arnold & Henderson.

• Prudential Equity Group (Wash.): Won a defense jury verdict as lead trial counsel in a four-week class action securities trial in Washington State Court, in which the plaintiff class sought substantial damages from Prudential arising from a defaulted municipal bond offering. The case was affirmed on appeal.
• Apple Computer (N.D. Cal.): Represented in post-trial motions and on appeal a senior Apple officer who had been found liable by a jury for damages in excess of $100 million. A motion for JNOV was granted by the trial court and the entire judgment was vacated.
• Apple Computer (N.D. Cal.): Represented Apple Computer and all of its officers and directors in nine securities class actions and derivative cases. Plaintiffs initially sought several billion dollars in damages. After discussions with plaintiffs’ counsel lasting eighteen months, plaintiffs agreed to dismiss all nine cases voluntarily. No consideration of any kind was paid by our clients. The litigation may be the largest securities class action ever voluntarily dismissed since the federal securities laws were enacted.
• The Gap (N.D. Cal.): Represented the company and its officers and directors in consolidated class actions seeking several billion dollars in damages. The litigation was dismissed by the district court and the order was affirmed by the Ninth Circuit.
• Wells Fargo Mutual Funds (N.D. Cal.): Represented Wells Fargo’s mutual funds in defense of class action litigation involving participation in securities fraud class action settlements. The litigation was dismissed.
• Citigroup Global Markets, Inc. (D. Nevada): Represented CGMI in multi-district class actions and a state court mass action brought by customers of a failed 1031 Exchange Company. The litigation settled on very favorable terms while our summary judgment motions were pending.
• Frank Quattrone (Various Courts): Successfully represented Frank Quattrone, the former head of technology investment banking at Credit Suisse First Boston, in federal and state class actions, all of which have been dismissed, except one where a summary judgment motion is pending.
• BankAmerica Corporation (N.D. Cal): Represented the company and its officers and directors in litigation seeking damages in connection with losses suffered by the Bank as a result of derivative investments. After discussions with plaintiffs’ counsel, plaintiffs agreed to dismiss the litigation voluntarily.
• First Security Bank (D. Utah): Represented First Security Bank, a Utah bank acquired by Wells Fargo, and its former directors in class action litigation. The court granted our motion to dismiss the second amended complaint with prejudice.
• Charles Schwab Mutual Funds (N.D. Cal.): Represented Charles Schwab’s mutual funds company in class action litigation involving participation in securities fraud class action settlements. The litigation was dismissed.
• Van Wagoner Mutual Funds (N.D. Cal.): Represented a mutual fund servicer in class action litigation. The court granted the fund servicer’s motion to dismiss the amended complaint with leave to amend. Plaintiffs abandoned the allegations against our client.
• Prudential Securities (N.D. Cal.): Represented Prudential Securities in class action litigation alleging fraudulent option transactions. The court granted our motion to dismiss all class claims with prejudice.
• Wells Fargo Funds Management (N.D. Cal.): Represented Wells Fargo’s mutual fund investment advisor and distributor in class and derivative litigation arising from shelf space and revenue sharing payments to broker-dealers. A ruling that severely limited the class led to a favorable settlement.
• Bay Networks (N.D. Cal.): Represented the company and its officers and directors in two separate class actions. The first was very favorably settled and the second was voluntarily dismissed as a result of discussions with plaintiffs’ counsel.
• Charles Schwab & Co. (S. D. Cal.): Represented Charles Schwab in class action litigation arising from internet trading, including an appeal to the Ninth Circuit. The litigation was very favorably settled.
• IPO Cases (S.D.N.Y.): Representation of various underwriters in hundreds of class actions filed in connection with the purported allocations of stock in IPOs.
• Edward D. Jones & Co. (N.D. Cal. & San Francisco Sup. Ct.): Represented this broker-dealer in class action litigation alleging unfair business practices in the sale of callable certificates of deposit. The case was settled on very favorable terms after litigation in state and federal district courts and the Ninth Circuit Court of Appeals.
• Tripath Technology Inc. (N.D. Cal.): Represented Tripath in class action litigation involving revenue recognition issues. A very favorable settlement was reached.
• Ramp Corporation (S.D.N.Y.): Represented the company’s former CEO in class action litigation. The court granted our motion to dismiss the Section 10(b) and Rule 10b-5 claims with prejudice. After this decision, the case settled on very favorable terms.
• Transkaryotic Therapies, Inc. (D. Mass.): Represented the company’s underwriter in class action litigation. The court granted our motion to dismiss the complaint with prejudice.
• In re FileNet Corp. Securities Litigation I (C.D. Cal./Orange Cty. Sup. Ct.): Represented FileNet and individual defendants in class action litigation and a tag-along derivative suit. The plaintiffs voluntarily dismissed the cases.
• In re FileNet Corp. Securities Litigation II (C.D. Cal.): Represented FileNet and individual defendants in a class action litigation. The plaintiffs voluntarily dismissed the action.
• In re Symmetricom Securities Litigation (N.D. Cal.): Represented Symmetricom and the individual defendants in class action litigation. Judge Whyte granted summary judgment in favor of all defendants on all causes of action. The Ninth Circuit Court of Appeals affirmed.
• Various Underwriters: Represented the lead underwriters in class actions filed against several dozen companies in conjunction with their public offering of securities. All the cases were successfully resolved with our clients paying nothing.

Shareholder Derivative Actions

• Wells Fargo & Company (San Francisco Sup. Ct.): Represented Wells Fargo in two cases involving derivative demands, one of which arose from Wells’ exposure to mortgage-related write-downs. Both cases were dismissed. We also represented Wells Fargo’s Board of Directors in derivative litigation arising from its acquisition of Accordia, Inc., an insurance broker that was being investigated for obtaining contingent commissions. The Court granted our motion to dismiss. 
• Digital River, Inc. (D. Minn.): Represented Digital River and certain of its officers and directors in a derivative litigation regarding stock options practices. After our motion to dismiss was filed, plaintiffs voluntarily dismissed the action.
• Sun Microsystems (N.D. Cal.): Represented the company in responding to two separate derivative litigation demands several years apart. After discussions with plaintiffs’ counsel, plaintiffs in both instances withdrew their demand.
• Pacific Gas & Electric (N.D. Cal.): Represented the Board of Directors in responding to a derivative demand. After a comprehensive investigation by the Board of the alleged facts, plaintiffs were convinced to withdraw their demand.
• McAfee, Inc. (N.D. Cal.): Represented a former officer of McAfee in derivative litigation concerning stock option practices. This matter was settled on very favorable terms.
• Chiron (Alameda Sup. Ct.): Represented the directors of Chiron in derivative litigation. The Court granted our motion to dismiss.
• Tripath Technology Inc. (Santa Clara Sup. Ct.): Represented Tripath in derivative litigation arising out of financial restatements. The case settled for the payment of $6,000 and corporate governance changes.
• Peregrine Systems, Inc. (San Diego Sup. Ct.): Represented an outside director of Peregrine in derivative litigation. Plaintiffs voluntarily dismissed the litigation against our client.
• Trident Microsystems, Inc. (N.D. Cal. & San Francisco Sup. Ct.): Representation of the former President of Trident in derivative litigation concerning stock option practices. These matters are pending.

Merger and Acquisition Actions

• First Security (Utah Ct.): Represented the former First Security directors in class action litigation alleging breach of fiduciary duty by the directors in agreeing to a merger proposal from Wells Fargo. The court granted defendants’ motion to strike the jury demand. Thereafter, the case settled on very favorable terms.
• The Good Guys, Inc. (Alameda Sup. Ct.): Represented The Good Guys, Inc. in derivative litigation regarding The Good Guys’ agreement to be acquired by CompUSA. The case settled on very favorable terms.
• AlphaSoft Services Corp. (N.D. Cal.): Represented the company’s co-founder in a securities fraud action arising from the purchaser’s breach of the Stock Purchase Agreement and related contracts. The matter settled on very favorable terms.

Corporate Internal Investigations

• Represented dozens of current and former officers and directors at 12 technology companies in internal investigations and/or SEC/DOJ/DOL investigations concerning stock options practices.
• Represented the Audit Committee of the Board of Directors of a public company in an internal investigation regarding allegations of misconduct by the CEO.
• Represented the Audit Committee of the Board of Directors of a public company in an internal investigation that resulted in a restatement of financial results.
• Represented the Audit Committee of the Board of Directors of a public company in an internal investigation regarding allegations of improper revenue recognition.
• Represented a CFO in connection with an internal investigation initiated by a life sciences company regarding public disclosures about the company’s business.
• Represented the independent trustees and directors of various mutual funds in internal investigations into allegations of “market timing” by employees of the mutual funds.
• Represented one of the country’s largest brokerage and investment banking firms in an internal investigation into allegations that documents had been illegally destroyed or altered improperly in advance of internal audits.

Regulatory Investigations and Enforcement Proceedings

• Prevailed against the SEC and obtained a dismissal of all charges brought by the SEC against a senior brokerage officer of Dean Witter after a lengthy administrative law trial. The SEC did not appeal the result.
• Represented a public company in connection with a formal SEC investigation into allegations of accounting fraud that resulted in restatements of financial results. The SEC terminated the investigation and did not file charges against the company or any of its employees.
• Represented the CFO of a public company in connection with an informal SEC investigation into allegations of accounting fraud. The SEC terminated the investigation and did not file charges against the CFO.
• Represented a research analyst in connection with an SEC investigation into allegations of insider trading and improper communications with investment bankers. The SEC did not file charges against the research analyst.
• Represented the former finance employees of a public company in a formal SEC investigation into allegations of accounting fraud that resulted in restatements of financial results. The SEC did not file charges against Howard Rice’s clients.
• Represented of the former Chairman of a hedge fund in an SEC investigation into allegations that a trading error had been allocated to a client account. The matter was favorably settled.
• Represented various hedge funds in formal and informal investigations concerning insider trading.
• Successfully obtained the dismissal of three enforcement actions brought by the NASD (now FINRA) against Frank Quattrone.
• Represented the former VP of Finance of a public company in connection with an SEC investigation into allegations of revenue recognition accounting fraud. The SEC did not file charges against our client.
• Represented a broker-dealer in connection with an SEC investigation into allegations concerning stock trading. This matter was favorably resolved.

Broker-Dealer Defense Matters

Over the past two decades, we have represented Bear Stearns, Charles Schwab, Citigroup, Morgan Stanley, Pacific Growth Equities, Prudential Securities, RBC Dain Rauscher, Smith Barney, Thomas Weisel Partners, UBS and other brokers and investment banks in hundreds of arbitrations arising from customer and employee claims. The following are some representative matters:

• We won summary judgment for Citigroup Global Markets in Oregon federal court concerning ERISA and state law claims arising from the Capital Consultants bankruptcy.
• Morgan Stanley hired us to defend two of its brokers in an NASD arbitration alleging that the brokers committed fraud, negligence and other wrongful conduct. All of the claims arose from Morgan Stanley's recommendation to an elderly couple of a cashless European-style option collar as a means of hedging more than $100 million in low-basis stock from a high-tech company obtained via merger. The claimants sought more than $60 million in damages. After a one-week arbitration before an NASD panel, the brokers' motion for a non-suit was granted by the panel and all claims were dismissed.
• Morgan Stanley engaged us to defend it and a former broker in a consolidated arbitration by four employees of a technology company who exercised stock options to acquire their employer's stock and held their positions when the company's fortunes suffered a serious reversal. Despite “failure to hedge” and/or diversify arguments, all four claims were rejected by a panel of NASD arbitrators after a two-week hearing.
• We represented UBS Financial Services in an arbitration alleging more than $20 million in losses in a trust account held for wealthy Mexican clients. After more than two weeks in arbitration, the arbitrators granted our motion to dismiss and assessed $500,000 in sanctions against the claimants. The award and the sanctions were confirmed by the Superior Court.
• We represented Charles Schwab in an arbitration alleging that Schwab should have prevented the trustee of an irrevocable trust from engaging in very heavy trading. The successor trustees sought $10 million in damages. After a four-day hearing, the arbitration panel dismissed all claims against Schwab and assessed the hearing costs against the claimant.