Often the individuals named in a securities class actions are represented by the same lawyers representing the company. While sometimes that can be in the best interest of all parties, that strategy may create friction and inherent conflicts. In order to fully understand the situation at hand, individuals must consider whether or not the company's interests are aligned with their own, if a criminal investigation is likely or ongoing, or if there is an SEC proceeding. When the question of separate counsel is not clear, a behind-the-scenes representation of the individual — called "shadow counsel" — may be the best alternative.
We advise clients at the onset that it is critical to confront these potential hazards at the beginning of any pending lawsuit and decide if additional counsel is necessary. Our lawyers are experienced in evaluating the critical components that make up these decisions. We work with both the individual and the company by reviewing:
We are also experienced in ensuring that the D&O insurance carrier and the company will indemnify the individual, assessing the appearance of individuals "lawyering up."
We know which forums are most important, which must be dealt with first, and-perhaps most importantly - how a move in one arena affects the outcome in the others.
Evaluating whether separate counsel is appropriate
Evaluating the risk of an SEC proceeding
- Evaluating the criminal risk
Evaluating the likelihood of a fine or D&O bar
Evaluating the risk of separate contribution to the class action settlement
Ensuring that the D&O insurance carrier and the company will indemnify the individual
Assessing the appearance of individuals "lawyering up"
Our perspective has been earned defending premier public companies and financial institutions in hundreds of securities class actions and enables us to effectively represent: