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Shareholder Derivative Actions

Dickstein Shapiro has extensive experience in all facets of shareholder derivative litigation. These matters are unique and extraordinary because they represent a shareholder’s attempt to usurp the management function of the Board of Directors and to enforce a company cause of action, as opposed to an individual cause of action. Many of these cases are further complicated by the existence of parallel criminal or regulatory actions or investigations.

Dickstein Shapiro attorneys have wide-ranging experience in all aspects of derivative-related litigation, including motions to dismiss for the shareholder’s failure to make a pre-suit demand, Special Committee investigations, and Special Committee-related litigation. Dickstein Shapiro is particularly sensitive to the need to coordinate the litigation response with other parallel investigations and litigations, including regulatory, criminal, and securities class actions.

Because of the unusual nature of derivative actions and Dickstein Shapiro’s broad background in this area, many companies, board committees, as well as directors and officers have turned to Dickstein Shapiro to handle these matters. Our experience advising clients in shareholder derivative and related litigation includes:

  • Serving as counsel to the special committee of an NYSE-listed financial guarantor in connection with shareholder derivative actions in federal and state courts alleging wrongdoing regarding CDOs and subprime mortgage loans; 
  • Representing the special committee of an international telecom company in connection with shareholder derivative actions in federal and state courts alleging wrongdoing regarding stock option backdating and earnings manipulation. Dickstein Shapiro attorneys also conducted a related worldwide internal investigation in connection with parallel investigations by the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office; 
  • Representing mutual funds and independent directors in connection with an internal investigation and shareholder derivative litigation arising from allegations of market timing and late trading in the mutual fund industry; 
  • Serving as counsel to the special committee of an NYSE-listed company in connection with an internal investigation and shareholder derivative litigation involving allegations of accounting irregularities regarding reinsurance; 
  • Representing the special committee of a multinational corporation in actions against former senior executives for alleged breaches of fiduciary duty related to the executives’ role in stock option backdating; 
  • Representing the senior officer of a large investment bank in connection with shareholder derivative litigation alleging wrongdoing regarding purported accounting irregularities; 
  • Representing the former senior officer of a newspaper holding company listed on the NYSE in connection with litigation brought by the Special Committee, criminal fraud charges, and a securities class action regarding allegations of diversion of corporate assets.
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