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Stephens, Molly

Molly Stephens

Direct Tel: +1 213-443-3635
Los Angeles
Tel: +1 213 443 3000 Fax: +1 213 443 3100

Molly Stephens specializes in complex commercial litigation, with an emphasis on securities fraud and structured finance litigation.  Ms. Stephens has represented plaintiffs and defendants in cases involving violations of securities registration requirements under the Securities Act of 1933 and state blue sky laws; fraud in the sale of public and private securities; insider trading; breach of fiduciary duty by directors, officers, and investment fund managers; unsuitable investment advice; dilution of minority shareholders; and breach of representations and warranties in the sale of stock or corporate assets.  Ms. Stephens has frequently been named a “Recommended Lawyer” in securities litigation by Legal 500 United States (2013-2015, 2017, 2018), and was named an up and coming securities litigator by Chambers USA (2013, 2014), which acknowledged “praise for her ‘powerful and impressive’ securities litigation practice” and noted that she is “phenomenally bright, a critical thinker and great listener.”  Representing residential mortgage-backed securities investors, Ms. Stephens has prevailed on numerous motions, including motions for summary judgment and Daubert motions, against the largest defense firms representing the major financial institutions and has secured settlements amounting to billions of dollars collectively. 

  • Alcentra
  • Allergan
  • Contango Capital Advisors
  • Federal Housing Finance Agency
  • GoldenTree Asset Management
  • Goldin Restructuring Fund
  • IBM
  • JMI Services
  • Landwin
  • MassMutual
  • MBIA Insurance Corporation
  • Orchard First Source Asset Management
  • ResCap Liquidating Trust
  • United Guaranty Mortgage Indemnity
  • Värde
  • Ms. Stephens is currently representing the ResCap Liquidating Trust, as successor to Residential Funding Company (RFC), in actions filed against mortgage lenders that sold RFC defective mortgage loans.  RFC securitized the defective mortgage loans, which resulted in lawsuits that forced RFC into bankruptcy.  The Trust sought recovery for RFC’s $9 billion in bankruptcy liabilities under indemnification and breach of contract theories.  Ms. Stephens has helped the Trust reach settlements in excess of $1 billion.  Ms. Stephens also recently tried one of the cases to a jury in Minnesota, with the jury verdict in the Trust’s favor returned in one day. 
  • Ms. Stephens is currently representing an investment management firm in defending against two lawsuits seeking recovery of at least $100 million alleging claims for an unlawful dividend, breach of fiduciary duty, and fraudulent transfer arising from a 2014 recapitalization transaction.
  • Ms. Stephens represented shareholders in a dispute involving the sale of a private company.  After the board unanimously approved a sale process, two out of four directors rejected all offers received by the board.  Ms. Stephens was successful in pleading direct claims by shareholders for breach of fiduciary duty based on the rejected sale offers, and the case settled in early 2017. 
  • Ms. Stephens represented MassMutual in 13 actions filed against banks and mortgage companies alleging misrepresentations in the sale of approximately $1.5 billion in residential mortgage-backed securities.  The actions involve securities originated and/or sold by Countrywide, Deutsche Bank, UBS, Credit Suisse, Bear Stearns, and JPMorgan Chase, among others.  Ms. Stephens won critical motions to dismiss, summary judgment motions, and Daubert motions, and all actions were settled. 
  • Ms. Stephens represented the Federal Housing Finance Agency, as conservator for Fannie Mae and Freddie Mac, in 16 actions against banks and mortgage companies alleging misrepresentations in the sale of residential mortgage-backed securities.  The actions involve securities originated and or sold by Bank of America, JP Morgan, Goldman Sachs, Deutsche Bank, Credit Suisse, Merrill Lynch, UBS, Barclays, and others.  FHFA recovered more than $25 billion in settlements.
  • Ms. Stephens represented a former outside director of a software company in five different actions filed by shareholders in federal and state court seeking in excess of $2 billion for alleged securities fraud, insider trading, and breach of fiduciary duty.  Ms. Stephens won dismissal with prejudice of one action, dismissal with prejudice of certain securities fraud claims in another action, and summary judgment of all claims in yet another action.  The remaining claims and actions were settled.
  • Ms. Stephens won dismissal with prejudice of all claims asserted by investors in a real estate investment fund against the fund’s managers. The claims included direct claims for violations of federal and California securities laws and derivative claims for breach of fiduciary duty.  The dismissal resulted in the settlement of two related actions brought by investors in other real estate investment funds asserting similar federal and California securities claims.
  • Ms. Stephens defeated a motion for temporary restraining order filed by investors in a Madoff-feeder fund against the fund’s managers, which resulted in the investors staying all litigation against the fund’s managers.
  • Ms. Stephens won dismissal with prejudice of a breach of fiduciary duty claim asserted by an investor in a distressed opportunities fund against the fund’s managers, which resulted in a settlement of the remaining claim.
  • Ms. Stephens represented the acquiring company in an arbitration with selling shareholders involving a dispute over the earn-out provision in a stock purchase agreement.  After the selling shareholders’ case was defeated in the first day of arbitration, the shareholders proposed a settlement that was approximately 5% of their demand to terminate the arbitration early.
  • University of Texas Law School
    (J.D., with honors, 2002) 
    • Texas Law Review
    • Order of the Coif

  • Stanford University
    (M.S., Engineering Economic Systems and Operations Research, 1998)
  • Stanford University
    (B.S., Industrial Engineering, 1997)
    • President, Stanford Debating Society
  • The State Bar of California
  • The State Bar of Texas
  • Weil, Gotshal & Manges, LLP:
    • Associate, 2002-2003
  • Named a Recommended Lawyer by Legal 500 United States in the areas of Securities Litigation – Plaintiff (2017, 2018), Financial Services – Litigation (2017), and Securities Litigation – Shareholder Investigations (2013-2015).
  • Ranked as “Up and Coming” in California Securities Litigation by Chambers USA (2013, 2014).
  • Named one of Super Lawyer’sSouthern California Rising Stars” (2012-2014).
  • Selected as one of The Recorder’s “Lawyers on the Fast Track” (2012).
  • Empowering Plaintiffs: Recent Trends That Make It Easier for Securities Plaintiffs to Maintain Lawsuits, INSIDE THE MINDS, NEW DEVELOPMENTS IN SECURITIES LITIGATION (Aspatore 2016).
  • After the Financial Crisis: The Impact of RMBS Cases on Securities Litigation, INSIDE THE MINDS, NEW DEVELOPMENTS IN SECURITIES LITIGATION (Aspatore 2013).  
  • Note, Sales of In-Game Assets: An Illustration of the Continuing Failure of Intellectual Property Law to Protect Digital-Content Creators, 80 TEX. L. REV. 1513 (2002). 
  • Contributing Writer, Frederick Hillier & Gerald J. Lieberman, INTRODUCTION TO OPERATIONS RESEARCH (7th ed. 2001).
  • Karl Schmedders & Molly Stephens, Time to Update Teaching Cases, OR/MS TODAY, Feb. 2001.