Cases & Clients

Current Matters of Particular Interest

As always, we are regularly working on an array of claims of all sizes arising out of insurance firm, financial services firm and brokerage firm misconduct. Such claims are routinely based on consumer protection laws, securities laws, misrepresentations, and unsuitable/inappropriate recommendations, excessive trading, and unauthorized trading, among other violations. At any given point in time, however, we may see particular types of matters that predominate. At present, we are seeing an emphasis in the following types of matters:

Sub-prime mortgage cases and collateralized debt obligation cases - Page Perry, working in conjunction with several other leading attorneys and experts around the country, is representing hundreds of clients who have sustained damages as a result of the disaster in the sub-prime mortgage and CDO investment debacle. Many of these securities were improperly sold as very safe investment grade alternatives to AAA bonds.

Auction Rate Securities Cases – Page Perry is currently working in conjunction with several other leading attorneys in representing both large institutional and individual clients who suffered tens of millions of dollars of investment losses in auction rate securities.  Auction rate securities are long term debt instruments that paid interest at short term interest rates and were routinely marketed to investors as being safe, liquid “cash equivalents.”  Such representations were simply untrue and, as a result, many investors have sustained serious damages.

Morgan Keegan Bond Funds – Page Perry is part of a team of lawyers actively involved in claims arising out of the sales and marketing of the Morgan Keegan Bond Funds.  The Morgan Keegan Bond Funds were a set of funds that were highly concentrated in low quality, high risk mortgage investments but were sold to the public as being safe conservative investments.  The Morgan Keegan Bonds Funds have sustained over an 80% loss since early 2007.

Schwab Yield Plus Fund – Page Perry is currently representing dozens of clients who have lost money in the Schwab Yield Plus Fund.  The Schwab Yield Plus Fund was marketed as a “money market alternative” with low risk and little volatility.  Unfortunately, the Fund concentrated its investments in high risk mortgage backed securities and it sustained a loss in excess of 30%.

Citigroup Hedge Fund Claims – Page Perry is representing dozens of investors with substantial losses sustained in hedge funds marketed and managed by Citigroup and its affiliates.  These investments were marketed to investors as being appropriate for conservative investors.  The investors sustained substantial losses when the hedge funds, in complete disregard for existing economic conditions, made highly leveraged investments under high risk market conditions.

Exchange Traded Funds(ETFs) -- The Firm is investigating exchange traded funds that have become enormously popular, but are plagued by a number of problems that have not been adequately disclosed, and are, therefore, not well understood by most investors.  Exchange traded funds, like closed end mutual funds, can trade at a premium or a discount to their net asset value.  While it is widely believed that the market prices of exchange traded funds vary only slightly from the underlying net asset value, this is only true of the most heavily traded and liquid exchange traded funds, such as the S&P 500 Index SPDR.  Other more thinly traded and less liquid funds may trade at significant premiums or discounts to net asset value.  This is especially true of bond exchange traded funds. The growing popularity of bond exchange traded funds has created demand that pushed shares to premiums.  If interest rates start to rise, however, many investors who bought bond exchange traded funds at a premium could end up selling them at a loss.
     Leveraged exchange traded funds use leverage, or borrowed money, with the goal of outperforming an index during a trading session or other short-term time frame.  For example, a leveraged exchange traded fund may attempt to achieve gains that are 2 or 3 times the benchmark index, while an inverse leveraged ETF may attempt to achieve 2 or 3 times the opposite of how the index performs as part of a short selling or hedging strategy.  Either way, leveraged exchange traded funds are much more sensitive to market movements than non-leveraged exchange traded funds due to the inherent nature of leverage, which tends to magnify both gains and losses.  Because leveraged exchange traded funds can lose many times their value during a single day, only the most sophisticated investors—with the ability to monitor them closely during the market session—should invest in such funds.  The SEC, the North American Securities Administrators Association (NASAA), and FINRA have all recently warned that leveraged exchange traded funds are dangerous investments and not suitable for most retail investors.  These warnings arose from the fact that brokerage firms have marketed leveraged exchange traded funds in a way that appeals to retail investors.

Private Investment/Reg D Offerings—Page Perry is currently representing multiple clients who are seeking recovery of losses sustained in a variety of private investments, including real estate limited partnerships and other similar investment vehicles.  Private investments are a growing problem, in part because they are typically not registered with regulators and thus escape regulatory scrutiny until after problems occur.  Brokers who receive higher commissions for selling such deals often fail to fully and adequately disclose all material risks to investors.

Lehman Structured Products — Page Perry is presently representing several clients who bought Lehman structured products sold by UBS.  These products, often marketed as offering “Principal Protection,” were in reality nothing more than the unsecured debt of the issuer Lehman Brothers.   Most clients did not understand this important fact and, in many cases, neither did the UBS broker who sold them the products.  In addition, by mid-2007, the financial press was full of alarming news about Lehman Brothers' subprime problems.

Elder Abuse Cases - Over recent years, Page Perry has been retained in an increasing number of cases that have involved financial abuse (mistreatment) of senior citizens. Unfortunately, senior citizens have become targets for a number of unscrupulous securities and insurance firms. Fortunately, there are many protections that the law provides to senior citizens who have been victimized.

Professional Money Manager Claims - Page Perry currently represents clients with claims based on improper handling/management of their accounts by professional money management firms and brokers.

Employment Matters - Page Perry regularly represents clients in employment disputes. At present the Firm is representing a former senior executive in a dispute with a major brokerage firm, a number of former managers, and individual brokers. Such disputes generally involve termination issues, loan issues and contractual agreements. The Firm also regularly advises clients on employment and contract issues, including non-solicitation and non-compete agreements.

Regulatory (Self Regulatory) Proceedings - Page Perry is continually representing clients who are targets or witnesses in regulatory actions brought by the SEC, various state authorities, and self-regulatory organizations. The past experience of Firm attorneys in working for regulatory organizations has proven invaluable in these matters. The Firm expects this area of its practice to expand upon consummation of the merger of the NASD and the New York Stock Exchange into the Financial Industry Regulatory Authority.

International Investor Cases - Page Perry continues to represent international investors who have suffered losses as a result of improper actions of U.S. firms. As the securities and financial services markets become more global and international in nature, the Firm expects this practice area to continue to grow rapidly.

Bad Broker Claims - Page Perry is currently involved in various cases arising out of common acts of misconduct by a single broker and his firm. Such actions are based on misrepresentations of material facts and mishandling investor's funds, among other things.

Variable Annuity Cases - Page Perry is often involved in a number of variable annuity cases arising out of a brokerage firm's inappropriate recommendations and explanations of variable annuities to their clients.

Hedge Fund Cases - Page Perry continues to represent investors who have lost substantial amounts of money investing in hedge funds. "Hedge Fund" is a term that has been used to describe and promote a variety of investment pools. A common characteristic of these various types of hedge funds is that they operate without registration or supervision by the State or Federal securities regulators or any SRO. This has presented to a number of unscrupulous hedge fund managers the opportunity to mislead and defraud their investors.

Early Retirement Scams - Over the last several years, Page Perry has represented a number of baby boomers who worked their entire careers for large companies with traditional pension plans and who have elected to take a lump sum payout retirement option over the traditional pension. These retirees elected the lump sum option based on the advice of trusted financial professionals who recommended that option because it purportedly would provide higher monthly retirement income and also the opportunity to grow the investment with little or no risk. In these cases, the financial professional improperly recommended the lump sum option because that was the only way that his or her firm could gain control of the retirement assets and generate commissions. The investors sustained substantial losses.

CLASS ACTIONS

        Evergreen Investments – Page Perry initiated a securities fraud class action under the Securities Act of 1933, alleging that defendants made material misrepresentations in connection with the sale of shares of Evergreen Investment’s Ultra Short Bond Fund (tickers: EUBAX, EUBBX, EUBCX & EUBIX).  The complaint alleges that the Fund’s investment objective -- to “provide current income consistent with preservation of capital and low principal fluctuation” – was materially false and misleading in light of the Fund’s underlying asset quality and undisclosed “high risk” investment strategy that led to realized losses of approximately 18 percent.  In addition, the complaint alleges that the Funds’ boilerplate risk disclosures also were materially false in misleading in failing to adequately disclose known risks to the Fund’s portfolio.

        EarthLink – Page Perry serves as counsel in a nationwide class action against EarthLink, which is based in Atlanta, Georgia.  The lawsuit alleges that the company improperly charged early termination fees to its customers when they closed their EarthLink accounts.  Class certification has been granted and defendant’s appeal of the certification was denied.

        Home Depot, Inc. -- Page Perry serves as local counsel in a nationwide class action against Home Depot, which is based in Atlanta, Georgia.  The complaint alleges that Home Depot is liable for the faulty installation of dryer vents that have a greater potential for causing household fires.


Past Cases of Particular Significance

While each of our cases and clients is extremely important to us, certain of our cases have received more public interest and attention than others. The following are among those cases that received particular attention or interest in the news media:


Analyst Fraud Cases

Between 2003 and 2006 Page Perry, working in coordination with several other law firms, represented hundreds of investors with claims against major brokerage firms arising out of the technology/telecom crash that occurred in 2000 and 2001.  Such claims were based on allegations that many of the analysts recommending technology/telecom investments had issued false opinions concerning their beliefs.  Page Perry assisted investors in these claims in recovering over $75,000,000 from an array of brokerage firms.

Marriott Limited Partnership Litigation

Following three years of litigation in the Texas courts, Mr. Page, along with co-counsel, obtained a $434 million settlement on behalf of thousands of investors in six limited partnerships organized by Host Marriott and Marriott International to bankroll the purchase of Courtyard by Marriott hotels, Residence Inn hotels, and Fairfield Inn hotels. The investors alleged that Marriott had breached its fiduciary duties to the investors by, among other things, charging excessive fees to manage and operate the hotels. The settlements, which occurred just days before trial was to commence, were rated by National Economic Research Associates as among the most favorable resolutions of securities class actions in the last decade.

Prudential Limited Partnership Disputes

Mr. Page and co-counsel were nationally recognized for its efforts in pursuing limited partnership claims against Prudential Securities. Mr. Page's efforts were highlighted in Kurt Eichenwald's best-selling book, Serpent on the Rock, and in dozens of articles in The Wall Street Journal, Business Week, The New York Times, and other publications.

We represented more than 700 investors pursuing limited partnership claims against Prudential and recovered in excess of $40 million on behalf of those investors.

Several of the more noteworthy cases were:

  • J. Don Smith v. Prudential Securities (1993): We succeeded in obtaining a $2.8 million settlement for a furniture executive who had invested approximately $1.1 million in Prudential limited partnerships.

  • Virginia First Savings & Loan v. Prudential Securities (1994): We obtained an arbitrator's award of $1.7 million on behalf of a savings and loan association which had lost money in a Prudential limited partnership formed to purchase commercial mortgages.

Lennon, et al. v. CS First Boston Corporation

Mr. Page won an award of approximately $5 million for several doctors who claimed that a major investment banking firm issued a misleading "fairness opinion" in connection with the merger of two medical companies, one of whose shares the doctors owned. The investment banking firm rendered a formal opinion that the proposed merger was fair to shareholders, including the doctors represented by Mr. Page. However, immediately following the merger, the price of the resulting company's stock dropped by 50 percent on news that operating results would be much lower than projected. The Claimants in this NYSE arbitration contended that the investment bankers violated Section 11 of the Securities Act of 1933 by failing to disclose information about the anticipated revenue shortfall and its probable impact on the merged company's share price. The NYSE arbitration decision in favor of our clients drew immediate attention in the investment banking community and was the subject of an article in the August 25, 1995 Wall Street Journal, in "Big Board Panel Orders CS First Boston To Pay $5 Million Over Fairness Report." In their award, a panel of New York Stock Exchange arbitrators ordered First Boston to pay damages of $4,474,197.00, as well as $500,000 in attorney's fees and costs.


Olde Discount Corporation

In multiple separate cases, Mr. Page was retained to represent the founder of Olde Discount Corporation in suits brought by clients of the brokerage firm. The claimants in these cases alleged that Mr. Olde, who subsequently sold his interest in the firm to H&R Block, Inc., was liable as a "control person" for alleged wrongdoing by the brokerage. Mr. Olde was defended vigorously and successfully. In all of these cases, Mr. Olde was either dismissed on motion or exonerated on the basis of evidence presented at the hearing. In two of the cases, the arbitrators assessed substantial hearing fees against the claimants.


Harry Henzel v. Rooney Pace Group, Inc.

Mr. Page was retained to represent a registered representative/customer whose personal securities account was mishandled by his brokerage firm/employer. Mr. Page claimed that the firm had improperly dumped worthless securities in the client's account and had charged him over a million dollars for these securities. The case was aggressively fought over 52 arbitration hearing sessions (26 days) in New York. The client was ultimately awarded $1.15 million by the arbitration panel. This case was reported by The Wall Street Journal on May 23, 1986, in "Rooney Pace Loses Arbitration Award of $1.1 Million."


Southern Trial Lawyers / D.H. Blair Claims

In 1999, Mr. Page was retained to represent five well-known high profile plaintiff trial lawyers in recouping the losses they sustained in trading with D.H. Blair. While the Firm's clients were unquestionably smart and savvy in their profession, they were extremely busy individuals who entrusted their finances to investment professionals. Mr. Page contended that these successful lawyers were victims of misrepresentation and market manipulation and succeeded in recovering more than $4 million on their behalf.


Arnold Whiteman v. Bear Stearns & Co.

Mr. Page successfully represented a registered representative who claimed that his career was irreparably damaged when his firm unjustly accused him of wrongful conduct in recommending a security to his customers. The registered representative contended that he had been defamed and disparaged by his firm after his customers sustained substantial losses in a particular stock. Mr. Page was able to prove that the brokerage firm had actually approved the very conduct which it attributed to the registered representative and the arbitration panel awarded the registered representative $850,000. This award was reported, at the time, to be the largest award of its type in the nation and was reported by The Wall Street Journal on June 6, 1985, in "Bear Stearns and Partner Ordered to Pay Ex-Worker."


Nabih v. Shearson Lehman Hutton

Mr. Page successfully represented a wealthy, sophisticated accountant from Egypt who had entrusted his investment accounts to Shearson. He was able to prove that the client was repeatedly lied to and that his accounts were excessively traded. The evidence also showed that false reports and information were provided to the client to conceal the fraud. The arbitration panel awarded the client all of his losses, his costs, and his attorney's fees and referred the case to the enforcement division of the NYSE.


Barton v. Quick & Reilly, NYSE Arbitration

Mr. Page successfully represented a client who complained that Quick & Reilly had let him engage in "unsuitable trading" and didn't prevent his "kamikaze" investing strategy. The client, who had a history of bizarre options trading on limited resources, entered his own options trade with his discount brokerage firm on "Black Monday", October 19, 1987. By the end of the day, the trade had wiped out all of the assets in the client's account and left him owing Quick & Reilly more than $100,000. Mr. Page successfully argued that Quick & Reilly had failed to adhere to the rules of the securities industry in the handling of the client's account. The panel ruled that Quick & Reilly was not entitled to recover its $100,000 debit and that, in addition, Quick & Reilly owed Mr. Page's client $106,704. The Barton award was regarded as a significant development in securities broker/customer disputes and was the subject of an August 6, 1990 article in USA Today, in "Ruling May Prompt Brokers to Question Your Risky Trades."