Securities Fraud Lawyer

Shapiro Haber & Urmy LLP has a well-deserved and hard-earned national reputation for vigorously and successfully vindicating the rights of shareholders and other investors in securities class actions and derivative actions, and obtaining multimillion dollar jury verdicts, arbitration awards and settlements. 

Shapiro Haber & Urmy LLP's experience and work as securities litigators has been highly praised by the courts before which they practice: 

  • Shapiro Haber & Urmy LLP “comes with a wealth of experience and skill in prosecuting class actions.”  U.S. West, Inc. v. MacAllister. (D. Colo.).
  • “The high quality of representation provided by [Shapiro Haber & Urmy LLP] is evident from the extensive record of this case.”  In re Merrill Lynch & Co., Inc. Research Reports Securities Litigation. (S.D.N.Y.).
  • Shapiro Haber & Urmy LLP is “highly qualified both generally, and in the specific context of private class actions under the Federal securities laws.” Coopersmith v. Lehman Brothers, Inc. (D. Mass.).
  • Shapiro Haber & Urmy LLP is “highly qualified to act as lead counsel for the Class” and “has extensive experience in prosecuting class actions, including as lead counsel.”  United States Trust Co. of New York v. Albert. (S.D.N.Y.).

Shapiro Haber & Urmy LLP has been a leader in prosecuting claims on behalf of investors in a variety of contexts, including:

Securities Fraud Litigation

More than seventy years ago, in the wake of the Great Depression, Congress enacted two landmark laws to regulate the sale of securities – the Securities Act of 1933 and the Securities Exchange Act of 1934.  The Federal securities laws prohibit fraudulent, deceptive, and manipulative practices in the sale of securities.  Federal law also requires companies to provide complete and accurate information when a company sells securities in a public offering. 

Shapiro Haber & Urmy LLP has extensive expertise championing the rights of investors who have been victimized by securities fraud.  Typically, our attorneys represent classes of investors who purchased securities in the open market at prices that were artificially inflated by a company’s false and misleading statements.  When the fraud is revealed, stock prices decline, and shareholders can incur significant losses.  We also represent classes of investors who purchased securities in public offerings that were marketed by using a registration statement or prospectus that has incorrect, incomplete, or misleading information.  

Shapiro Haber & Urmy LLP has recovered many hundreds of millions of dollars for investors.   A notable case includes In re Merrill Lynch Analyst Reports Securities Litigation (S.D.N.Y.), in which Shapiro Haber & Urmy LLP served as the court-appointed co-chairman of the Plaintiffs' Executive Committee of a group of more than twenty securities class actions, arising out of false and misleading research reports by Merrill Lynch stock analysts, which settled for $125 million.

Shapiro Haber & Urmy LLP has recovered substantial settlements for defrauded shareholders by prosecuting securities class action suits on behalf of securities holders of:

  • Actrade Financial Tech., Inc. ($9.9 million) (settlement approval pending)
  • Bank of New England ($6.5 million)
  • Bank of New England Bondholders ($8.4 million)
  • Biopure Corp. ($10 million)
  • Centennial Tech., Inc. (stock and cash with a value of approximately $20 million)
  • Digital Equipment Corp. ($5.2 million)
  • Inso Corp. ($12 million)
  • Kendall Square Research Corp. (cash, stock and warrants, with a total value of approximately $17 million)
  • Kurzweil Applied Intelligence, Inc. ($9.625 million)
  • Lotus Dev. Corp. ($7.5 million)
  • MicroCom, Inc. ($6 million)
  • Minoco Oil and Gas Drilling Limited Partnerships ($15 million)
  • Molten Metal Tech., Inc. ($13.16 million)
  • Monarch Capital Corp. ($5 million)
  • Open Environment Corp. ($6 million)
  • Razorfish (against CreditSuisse First Boston) ($3 million)
  • Pegasystems, Inc. ($5.25 million)
  • Picturetel Corp. ($12 million)
  • Winstar (againt CreditSuisse First Boston) ($8 million)

Please read more about these successful securities cases and current securities cases.

Shapiro Haber & Urmy LLP does not hesitate to bring a case to trial when it cannot be favorably settled:

  • Shapiro Haber & Urmy LLP partner Thomas V. Urmy, Jr. represented the Commonwealth of Massachusetts Pension Reserves Investment Trust ("PRIT") in a securities fraud action against Bear Stearns & Co., PRIT v. Bear Stearns (S.D. Cal.), which was consolidated with a class action arising out of the same facts. After a four-week trial, the jury found that Bear Stearns had committed securities fraud and entered a multimillion dollar verdict in favor of PRIT, representing 100% of the damages sought by PRIT at the trial. (The case was subsequently settled while on appeal to the Ninth Circuit).
  • Shapiro Haber & Urmy LLP partners Thomas G. Shapiro and Edward F. Haber were chief trial counsel in a securities class action entitled Fulco v. Continental Cablevision (D. Mass.) in a three-week jury trial before the United States District Court in Boston. The case was brought on behalf of the limited partners in four partnerships that owned and operated cable television systems.  The jury returned a multimillion dollar verdict for the plaintiffs.

If you believe you have been defrauded or mislead in the sale of securities, please contact us to learn more about your rights.

Shareholder Derivative Litigation

When you own stock in a company, you expect the board of directors and the management of that company to act in the best interests of the company and its shareholders.  Under the law, the board of directors and management have a fiduciary duty to act with loyalty, good faith and due care. When they breach one or more of those duties, shareholders may have the right to take action to correct the problem by bringing a derivative action on behalf of the company.

Shapiro Haber & Urmy LLP specializes in representing shareholders in derivative action lawsuits.  We have obtained a number of the leading Delaware decisions in the areas of corporate governance and executive compensation.  Because many large U.S. companies are incorporated in Delaware, these decisions have affected corporate conduct throughout the country.

Shapiro Haber & Urmy LLP has been at the forefront of shareholder litigation addressing the nationwide epidemic of improperly backdated stock options.  In that area, we represent shareholders pursuing corporate directors and officers who have manipulated stock option dates to improperly enrich themselves and others with billions of dollars in profit and unrealized gain at the direct expense of their corporations.  We have:

  • Challenged the improper dating of stock options granted to officers, directors, and executives of: UnitedHealth Group, Inc.; Maxim Integrated Products; Affiliated Computer Services, Inc.; Staples, Inc.; Linear Technology Corp.; and Cablevision Systems Corporation.
  • Recovered the landmark UnitedHealth Group, Inc. settlement valued over $700 million.

Outside of the stock options context, we have also prosecuted many notable shareholder derivative actions, including the consolidated derivative action brought on behalf of the HealthSouth Corporation against its former CEO, Richard Scrushy, its other former officers and directors, its auditors, investment bankers, and others. In this landmark case, the court-appointed legal team, which includes Shapiro Haber & Urmy LLP, has obtained the following recoveries for HealthSouth: (i) summary judgment in the Delaware Chancery Court, for over $17 million, against Mr. Scrushy; (ii) summary judgment in the Circuit Court of Jefferson County, Alabama against Mr. Scrushy for over $47 million; (iii) a settlement of the derivative claims against some of the officers and directors of HealthSouth (not including Scrushy) for $100 million, to be paid by those defendants' insurers; and (iv) a $133 million settlement of the derivative claims against HealthSouth’s former investment advisor, UBS.  The legal team also has obtained at $2.8 billion dollar judgment against Mr. Scrushy after a bench trial in the Circuit Court of Jefferson Court, Alabama.

Please read more about these successful securities cases and current securities cases.

If you are a shareholder in a company about which you have concerns regarding the conduct of officers and/or directors, please contact us for a consultation.

In a related area, Shapiro Haber & Urmy LLP has also represented bankruptcy trustees who bring suit against the debtor’s officers and directors arising out of their mismanagement of the company prior to the bankruptcy. Shapiro Haber & Urmy represented the Trustee of UNIFI Communications, Inc., in a breach of fiduciary duty lawsuit against its former directors, alleging that they grossly mismanaged UNIFI in the period leading up to its bankruptcy, causing UNIFI's insolvency to deepen.

Excessive Fee Mutual Fund Litigation

Millions of Americans invest their retirement savings, college savings, and life savings in mutual funds.  Unfortunately, however, the millions of Americans that have chosen to entrust their hard-earned dollars to mutual fund advisors and distributors are being taken advantage of in the form of excessive and unlawful fees and other abuses, which ultimately deplete the return on investment they seek.

Recognizing that the relationship between investment advisers and mutual funds is fraught with potential conflicts of interest, which could lead to excessive fees, Congress enacted the Investment Company Act of 1940 (“ICA”).  The ICA was intended to ameliorate the potential conflict by requiring that mutual funds be overseen by an independent board of directors.  The board of directors, meant to serve as "watchdogs" looking out for the interests of mutual fund investors, often serve as nothing more than rubberstamps for the advisors, who continue to charge exorbitant fees. 

Shapiro Haber & Urmy LLP has fought to protect mutual fund investors from excessive fees. For example, Shapiro Haber & Urmy LLP has represented shareholders of several ING Principal Protection Funds who have brought suit alleging that the advisory fees charged are excessive and violate Section 36(b) of the Investment Company Act of 1940.  The action was settled for payment by the defendants to the ING Principal Protection Funds of significant funds and a substantial reduction in investment advisory fees to be charged in the future, which will result in millions of dollars of savings to the funds and their shareholders. Shapiro Haber & Urmy LLP represents shareholders in five of Fidelity Investment’s largest mutual funds alleging that Fidelity is charging excess advisory fees for managing those funds.

Please read more about these successful securities cases and current securities cases.

If you believe that you have been victimized by excessive or unlawful fees, or other abusive tactics by mutual funds, please contact us for a consultation.

Ponzi Scheme Litigation

Shapiro Haber & Urmy LLP has been actively investigating claims related to the "Ponzi Scheme" perpetrated by Bernard Madoff and Bernard L. Madoff Investment Securities LLC (“BMIS”).

On December 11, 2008, Bernard Madoff was arrested and charged with securities fraud.  That same day, the SEC issued a press release revealing that Madoff had admitted to the Ponzi scheme, in which returns paid to prior investors did not come from actual earnings, but rather from the principal investments of subsequent investors.  The SEC’s December 11, 2008 press release further revealed that, although regulatory filings reflected that BMIS claimed to have billions of dollars in assets under management at the beginning of 2008, virtually all of those assets were missing as of December, 2008.  The assets of Mr. Madoff and his firm have since been frozen, and a receiver has been appointed to liquidate BMIS. On February 20, 2009, Irving Picard, the trustee liquidating BMIS, reported that Madoff appeared not to have purchased any securities for his clients for “perhaps as much as 13 years.”  It was “cash in and cash out,” Mr. Picard said.  On March 12, 2009, Madoff pled guilty to eleven counts of fraud – admitting that he had run a vast Ponzi scheme that robbed thousands of investors of their life savings.  He is in custody pending sentencing.

On June 11, 2009, Shapiro Haber & Urmy LLP commenced a class action against Fiserv, Inc., and its affiliates, arising out of a multi-billion dollar Ponzi scheme orchestrated by Mr. Madoff.   Plaintiffs maintain that Fiserv and its subsidiaries and affiliates took title, custody, possession, and ownership of the funds in the Madoff IRAs, which was entrusted to them by each Plaintiff and class member, and allowed Mr. Madoff, through his Ponzi scheme, to convert, commingle and abscond with Plaintiffs’ and class members’ retirement savings.  Plaintiffs allege that Fiserv and its subsidiaries and affiliates failed to take physical custody of the assets in the Madoff IRAs, or to take any rudimentary steps to verify that the assets even existed.  Fiserv and its subsidiaries and affiliates violated their duties despite warnings by Fiserv’s own sub-advisor, Rogercasey, Inc., “about the integrity of the Madoff structure,” and many other “red flags” about Madoff’s investment strategies and operations, including discrepancies on account statements Fiserv received from BMIS.  Prior to the time Mr. Madoff’s scheme was revealed, Fiserv had entanglements with Madoff promoters Avellino & Bienes, who were shut down by the SEC, and Fiserv knew that it had facilitated similar massive Ponzi schemes perpetrated by other fraudsters, yet Fiserv did nothing to change its operational procedures to prevent another catastrophe.   Plaintiffs maintain that Fiserv and the Trustee Defendants violated their fiduciary, contractual and professional duties to Plaintiffs and the members of the class, who lost their retirement savings.

Please read more about these successful securities cases and current securities cases.

If you believe you have been defrauded or mislead in the sale of securities, please contact us to learn more about your rights.

Mergers, Acquisitions and Business to Business Stock Deals

Shapiro Haber & Urmy LLP has represented investors in a variety of other contexts, including claims for breaches of fiduciary and contractual duties arising out of business to business stock deals or mergers and other acquisitions.  These claims typically manifest out of the failure to fully disclose information about the transaction, which is important for an investor who evaluating whether to sell a business, or to vote in favor of a proposed transaction.  Some representative cases are:            

  • Shapiro Haber & Urmy LLP represented a class of persons who had sold businesses to Waste Management, Inc. for common stock of Waste Management. The case arose from Waste Management's restatement of its financial statements. Shapiro Haber & Urmy LLP obtained summary judgment against Waste Management as to liability for a majority of the class members. The case was subsequently settled for a combination of cash and stock with a total value of $25 million.
  • Shapiro Haber & Urmy LLP represented a class of shareholders of EcoScience Corp. in a breach of fiduciary duty lawsuit against its former directors, arising out of the merger between EcoScience and Agro Power Development, Inc. The case, brought in the Delaware Chancery Court, charged the merger was accomplished by means of a false proxy statement, and resulted in the payment of an unfair price to EcoScience shareholders.

Please read more about these successful securities cases and current securities cases.

If you believe you have been defrauded or mislead in the sale of securities, please contact us to learn more about your rights.

Securities Arbitrations

Arbitration is a form of alternative dispute resolution (ADR) for the resolution of disputes outside the courts.  Arbitration provisions are common in many contracts, including almost all agreements with brokerage firms.  In those instances, investors agree to arbitrate any disputes if they arise. Shapiro Haber & Urmy LLP attorneys have extensive experience arbitrating disputes before the American Arbitration Association and the National Association of Securities Dealers. 


Additional Resources:

US Securities and Exchange Commission

US Securities and Exchange Commission - Whistleblower Program

Massachusetts Securities Division