We obtained a jury verdict for our client, Michael Rivers, against claims for stock manipulation brought by the SEC. The SEC contended that Mr. Rivers had violated stock fraud statutes and rules by "marking the close," through his purchases of a thinly-traded stock at the end of the day. This case required explaining complicated investment and regulatory matters to the jury, and responding to the SEC's insistence that it had the power to declare what acts are illegal. The jury's defense verdict resulted from our case showing that Mr. Rivers had no intent to violate the law, especially since even his broker was not familiar with the securities industry guidelines that caution against late-in-the-day trades.

We represented two broker-dealers who lost tens of millions of dollars when MJK Clearing, a Minneapolis broker dealer, collapsed as a result of a massive securities lending and stock manipulation scheme. The collapse of MJK was the largest failure of a U.S. brokerage firm in at least 30 years and produced total claimed losses of over $200 million. Our clients, along with the Trustee for MJK Clearing and others, filed lawsuits against numerous defendants involved in the alleged fraud. The lawsuits, which were eventually settled in late 2005, involved highly complex issues of federal and state securities laws.  

We represent an extremely successful manager of a hedge fund in his compensation claims against Deephaven, a local investment firm that is owned by Knight Trading Group of New Jersey. Mr. Bergerson's employment contract was not renewed after his unsuccessful bid to join with partners in acquiring Deephaven from Knight. When Mr. Bergerson started his lawsuit, Deephaven responded with claims of unlawful competition and misappropriation of trade secrets, and sought a temporary restraining order in federal court. We successfully opposed the TRO by presenting evidence showing that the trade secret claim was contrived and that the information alleged to be "secret" had been distributed at investor meetings. Bergerson v. Deephaven Capital Management, LLC , 2003 WL 1824964 (D. Minn. 2003). The case continues concerning Mr. Bergerson's compensation claims, which depend in part upon valuation of Deephaven's trading positions.  

We represented the founding shareholder of a medical device manufacturer in a complex minority shareholder lawsuit. The company had become enormously successful based on Dr. Amplatz's device for the non-surgical repair of holes in the heart wall. The case involved competing claims for shareholder oppression, fraud and self-dealing regarding company assets, as well as FDA regulatory issues. The strategy required us to address many corporate governance issues, including some involving subsidiary companies.

This was a business valuation case we tried in the Delaware Court of Chancery. Our clients were shareholders of a publicly-traded company who dissented from a corporate merger, claiming that the merger consideration was below the fair value of the company. After trial, the Court of Chancery awarded our clients a fifty-percent increase over the price received by the shareholders that had accepted the merger price. Gholl v. eMachines, Inc., 2004 WL 2847865 (Del. Ch. 2004), aff'd 875 A.2d 632 (Del. 2005). The defendant company appealed the valuation ruling to the Delaware Supreme Court, which upheld the award in favor of our clients.

Terry Fruth represented investors in a successful securities fraud lawsuit that was ultimately resolved by the United States Supreme Court. The case presented complex issues involving calculation of damages and tax and accounting principles. The issue before the Supreme Court was the interplay between damages available for securities fraud under Rule 10b-5 and tax laws. The Supreme Court reversed in favor of our clients by holding that the amount to be returned to the investor for rescission of the transaction was not subject to offset for tax benefits received while holding the investment, even though the investment had been sold as a tax shelter.