Class Action Investigations

In 1995 Congress enacted the Private Securities Litigation Reform Act. The PSLRA created a so-called “heightened” pleading standard where plaintiffs bringing securities fraud suits are required to provide extensive factual detail in support of their case’s allegations. This heightened requirement (along with other critical elements of the PSLRA) led to an increased demand for investigative work and caused firms to dedicate significantly more resources towards investigative efforts. Driven by this pivotal legislation, a cottage industry of investigators specializing in this niche area took shape. The use of confidential witnesses in securities fraud cases — usually former employees of the defendant companies— has since become a central method to substantiate alleged fraudulent conduct.

Class action firms have recognized the value of this type of investigative work within other legal pursuits involving corporate wrongdoing. Today, it is not uncommon for factual information to be sourced from, and attributed to, confidential witnesses in false claims/whistleblower matters, antitrust suits, and consumer class actions.

The Silver Torch™ advantage.

Silver Torch has vast experience gathering highly relevant information from confidential witnesses in the class action arena. Our founder has conducted hundreds of investigations involving Fortune 500 companies, spanning an expansive range of industries. Alex has been involved in several high-profile cases including Jaffe v. Household Int’l, Inc., No. 02-C-05893 (N.D. Ill.) where he served as the principal investigator in connection with a 14-year litigation resulting in the largest securities fraud settlement following a trial. We pride ourselves on conducting effective investigations, and preparing polished, unimpeachable work product.

Representative Matters

The following case studies describe publicly filed litigation where our firm’s founder contributed to successful outcomes. Past results do not guarantee future outcomes.

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In re GSE Bonds Antitrust Litigation

No. 1:19-cv-01704 (S.D.N.Y.)

Matter: Complex antitrust litigation involving alleged price-fixing of government-sponsored-entity (GSE) bonds by large financial institutions in the secondary market.

Our Contribution: Alex identified and secured cooperation from a uniquely positioned former industry executive with direct knowledge of GSE bond trading practices at two of the defendant banks. Alex worked closely with this source to develop an intricate understanding of the industry, its key players, and problematic practices. Obtaining this information at a very early stage was instrumental in assessing the case’s viability, and being first to file a well-pled, fact-rich complaint.

Outcome: 16 financial firms settled. As stated in court filings associated with the settlement, Alex/counsel “interviewed numerous industry insiders and ultimately retained a former highly-placed GSE Bond trader. Counsel worked with this industry expert to understand the regulatory framework and gain a thorough understanding of the GSE Bond market and the players in that market. Due to Counsel’s extensive investigation, Plaintiff’s complaint was the first to identify and allege the Defendants involved in the price-fixing conspiracy, its scope, and its duration.” ECF No. 349, ¶¶18-19.

Union Asset Management Holding AG v. SanDisk LLC

No. 3:15-cv-01455-VC (N.D. Cal.)

Matter: Securities fraud litigation where a flash memory drive manufacturer misled investors about the health and prospects of one of the company’s business segments, as well as its purported success integrating a recently acquired entity.

Our Contribution: Alex obtained highly corroborative information that attributed knowledge of the fraud to the company’s CEO and CFO. Alex fully authenticated the sourcing and accuracy of information he developed through the investigation; a point that had been hotly contested by opposing counsel.

Outcome: Having sufficiently attributed knowledge of the fraud to these senior executives, the court denied opposing counsel’s motion to dismiss, and a favorable settlement was obtained.

In re Equifax Inc. Customer Data Security Breach Litigation

No. 1:17-md-2800 (N.D. Ga.)

Matter: In this data breach action, a hack of a major consumer credit reporting agency led to the theft of highly sensitive information belonging to over 148 million Americans.

Our Contribution: Alex’s investigation confirmed that the corporate defendant failed to implement reasonable measures critical to safeguarding data, including 1.) vulnerability scanning and patch management processes; 2.) restrictions and controls for accessing critical databases; 3.) network segmentation between internet facing systems and backend systems, and; 4.) properly updated endpoint detection software.

Outcome: The court noted that the consumer settlement was “the largest and most comprehensive recovery in a data breach case in U.S. history by several orders of magnitude.”