Quinn Emanuel has unparalleled experience representing hedge funds, fund managers, and their principals and advisers in high stakes litigation, governmental investigations, and compliance matters. Deploying our robust securities, general commercial, white collar, and corporate governance practices, we handle a broad spectrum of matters for our hedge fund clients, including corporate and internal governance matters, defensive litigation concerning traditional and non-traditional investment strategies, and offensive litigation seeking to monetize fund investments and assets. Many of our hedge fund clients also call upon our bankruptcy and restructuring expertise in connection with their investments in distressed companies, particularly where litigation plays an important role in protecting or increasing the value of their debt or equity investment.
Much of the work we do for hedge fund managers, principals, and advisers requires a deep understanding of complex investment structures and strategies. In litigation matters arising from long/short, special situation, macro, arbitrage, and other investment strategies, our extensive understanding of all aspects of corporate restructuring and modern corporate finance, combined with our broad experience litigating structured financial products and other investment vehicles, provides our clients with a distinct advantage. Our unique combination of financial fluency and knowledge of the financial industry, with complex litigation and courtroom skill is unrivaled by our peers. Indeed, the breadth of our experience means that there is no knowledge gap when we take on the large transactional firms. We are also one of very few top-tier global firms that is free to litigate against the large prime brokers and money center banks, such as Citibank, JPMorgan Chase, UBS, Merrill Lynch, Royal Bank of Scotland, Deutsche Bank, Credit Suisse, Barclays, HSBC, Bank of America, and Goldman Sachs. We also regularly represent hedge funds and asset managers against the “Big Four” accounting firms.
Because of our financial acumen and courtroom credibility, we have been appointed lead counsel in virtually every major recent financial manipulation case—including those asserting manipulation in CDS markets, ISDAfix, gold pricing, interest rate swaps, and sub-sovereign and agency bonds. Our track record provides opportunities for our clients to serve as lead plaintiffs if that is their preference. We also have a successful “opt out” practice for clients who prefer not to serve in a class leadership role. We know how to maximize recoveries for our clients.
At the same time, we are very successful at delivering outcomes that maximize value through calculated legal strategies and negotiated resolutions. In fact, while we are known for our trial experience, not all of our representations involve litigation. We also have a proven track record of successfully resolving sensitive partnership, valuation, and redemption disputes between fund managers and individual partners without the need for court filings and litigation.
We have a deep bench of securities and white collar partners who are well-versed with the types of governmental and regulatory defense and criminal matters that hedge fund clients occasionally face. Over 25 of our partners were former federal prosecutors, who have garnered extensive experience representing funds and fund managers in governmental investigations and prosecutions around the globe. We have no traditional regulatory practice and as such are not beholden to any regulators. Regulators know we will take cases to trial if it is in our client’s interests, and we believe that gives our clients a distinct advantage in negotiations.
We are also uniquely situated to assist our hedge fund clients with litigation matters that arise overseas or have international aspects. We have major offices in key foreign jurisdictions that are versed in complex financial transactions and regularly handle litigation in those jurisdictions on behalf of hedge funds and other firm clients. For instance, we have offices in the United Kingdom, Hong Kong, Germany, and Australia (among other countries), each with lawyers experienced in complex business litigation. By not needing to outsource international problems or issues to other firms, we are also able to provide a level of continuity and client responsiveness for cross-border litigation that is unparalleled.
Finally, no business firm in the United States tries as many cases as we do. Nor has, to our knowledge, any other firm in the United States achieved our success at trial. In the last several years, we have secured judgments and settlements in excess of $20 billion, including more than $3 billion for funds and fund managers. That said, a substantial amount of our work is defense-oriented, and we have successfully defended numerous asset managers against claims seeking many billions of dollars.
- The firm won a major victory for two investment funds, Zohar II 2005-1, Ltd. and Zohar III, Ltd. (the “Zohar Funds”), in a dispute with their former collateral manager, Lynn Tilton. The immediate dispute concerned ownership and control over three Delaware corporations—FSAR Holdings, Inc., UI Acquisition Holding Co., and Glenoit Universal Ltd.—but has ramifications for dozens of other portfolio companies that are subject to the same dispute. The Zohar Funds claimed legal and beneficial ownership of the three subject companies, and elected new directors to their boards by written consent. Tilton refused to recognize the election, claiming that the Zohar Funds were merely record holders of equity in the companies, while she was the true beneficial owner entitled to all rights and privileges of ownership, including the right to elect their directors. Following a six day trial before the Delaware Court of Chancery, the Court issued a 95-page Memorandum Opinion finding for the Zohar Funds on all counts. The Court confirmed the Zohar Funds’ appointees as the rightful directors of the subject companies and rejected Tilton’s claim of beneficial ownership of the Defendant Companies as “not credible” and based upon “hindsight observations” the Court characterized as “revisionist.”
- We represented UMB Bank, N.A. as trustee on behalf of noteholders, in a case against Airplanes Limited and Airplanes U.S. Trust that involved a dispute over the improper reserving by Airplanes of $190 million that otherwise would have gone to noteholders. We obtained a favorable judgment on the pleadings with the Court finding that the $190 million reserve was improper and in violation of the indenture.
- We represented MHR Fund Management and its affiliated funds relating to Carl Icahn’s 2010 hostile bid for Lions Gate Entertainment Corp. MHR is a longstanding significant investor in Lions Gate, and its founder is a member of Lions Gate’s board. Following a four day trial, the Supreme Court of British Columbia rejected Icahn’s bid to rescind the transactions or sterilize MHR’s votes. Two months later, the New York Supreme Court denied Icahn’s request for a preliminary injunction. Following these rulings, Icahn did not close his then-outstanding tender offer, and his slate of directors was defeated.
- We cemented our prior victories on behalf of Indonesian bank PT Bank Mutiara, Tbk (now known as PT Bank JTrust Indonesia) against a crooked Mauritian hedge fund, leaving the fund with no assets and no recourse in the United States. Nearly six years ago, the hedge fund improperly seized and retained several million dollars of our client’s assets and refused to return the money despite numerous court orders to do so. The court held the fund and its owner in contempt, imposed fines that eventually reached more than $400 million, and ultimately granted our request that it transfer the ownership of the hedge fund itself to our client. Following that order, and the Court of Appeals’ affirmance, the hedge fund’s former management commenced a new action in Delaware to oust the newly appointed board of directors and to retake control of the entities. We swiftly obtained an injunction stopping that case, which the Court of Appeals affirmed last week. The decision left the hedge fund with no viable means to continue its pursuit of our client in courts in the United States or anywhere else around the world.
- We represented two dozen hedge funds, including international funds grouped under four management entities — Elliott, Davidson-Kempner, Appaloosa, and Angelo Gordon—as plaintiff-holders of Yosemite and Enron Credit-Linked Notes (ECLN) in the Yosemite v. Citibank action in the Enron MDL, where we successfully obtained a settlement in excess of $2.1 billion.
- After a week-long trial, we won a complete defense verdict—plaintiff was awarded nothing and lost on every count—in a bet-the-company case. We represented Athilon Capital Corp. and its board of directors in a lawsuit brought by Quadrant Structured Products LLC (owned by Magnetar) in Delaware Chancery Court. Quadrant sought not only hundreds of millions of dollars and findings of breach of fiduciary duty against the members of the Athilon board as individuals—but also an order requiring Athilon to liquidate its assets and shut its business down entirely. Instead, Vice Chancellor Laster denied all the relief Quadrant requested, leaving Athilon free to continue the long-term business strategy Quadrant challenged at trial. Quadrant attempted to reverse our trial win by appealing to the Delaware Supreme Court, but we won the appeal by securing an en banc decision that affirmed all of the trial court’s rulings.
- We achieved a complete victory for our clients, GSO Credit Partners and Canyon Partners, in the Financial List of the English High Court. The dispute arose out of an agreement by our clients to acquire (by way of back-to-back trades) a position held by HCC International Insurance Company Plc under a surety bonds facility. Barclays Bank was the intermediary for the purpose of the back-to-back trades. The trades were entered into under standard Loan Market Association (LMA) documentation, and the dispute concerned the settlement amount payable in relation to the trades. The judge agreed with our arguments and found that our construction of the LMA terms was correct. Significantly for us in the London legal market, this was the first judgment of the recently created Financial List.
- We represented a major hedge fund when it was threatened with claims by investors in a fund that sought to take advantage of the spreads between municipal bonds and treasury bonds and that lost nearly 80% of its value during the financial crisis. After extensive discussions and a mediation with plaintiffs’ counsel, we were able to resolve all claims on favorable terms without any litigation claim being filed by any investor.
- We represented a consortium of hedge funds and other investors who were initial and secondary market lenders to bankrupt beverage manufacturer Le Nature’s, Inc., in litigation against Wachovia Capital Markets, BDO Seidman, and certain Le Nature’s executives. Separately, we represented a group of approximately 75 pension funds, investment funds, and other investors that purchased bonds issued by Le Nature’s at par value. The defendants in that case included Wachovia, Ernst & Young, and BDO Seidman. We obtained substantial settlements for our clients.
- We represented Bayerische Hypo-Und Vereinsbank AG (“HVB”) in a lawsuit against an investment vehicle that was wrongfully refusing to redeem shares held by HVB, bringing claims for breach of contract and seeking approximately $422 million in damages. Together with the filing of the complaint, we obtained an immediate ex parte attachment of all assets owned by the defendants located in the State of New York, and we obtained an order sealing the file. The following day, more than $380 million worth of the defendants’ assets in New York were attached. Having gained considerable leverage, we were able to reach a favorable settlement—receiving $403 million—shortly thereafter.
- We represented emerging market and distressed hedge fund, VR Capital Management, the largest creditor of failed Refco, Inc. At trial in Refco's bankruptcy proceeding, we won a ruling worth hundreds of millions of dollars establishing that Refco was a broker under chapter 7, subchapter three, and thus entitling VR Capital to priority recovery as a securities customer. We ultimately recovered nearly $800 million.
- We represented Elliott Management Company in a successful effort to enforce a security interest in tens of millions of dollars of art formerly owned by convicted fraudster Marc Dreier, which enabled Elliott to recover a significant portion of the losses it sustained on account of Dreier’s fraud.
- We represented Halcyon in connection with Asarco distressed debt investment.
- We represented limited partners of a hedge fund in a shareholder derivative arbitration against a hedge fund manager and his stockbroker sister based on claims of systemic fraud through post-execution allocations of securities trades over more than a decade. After an arbitration that spanned seven months, the arbitration panel, in a unanimous opinion, awarded our clients $75 million in compensatory and punitive damages, which included $35 million for disgorgement of compensation for the period of the fraud. In what may be the highest arbitration award ever obtained against an individual defendant, we successfully obtained ratification by the New York Supreme Court.
- We represented Ramius Capital in a FINRA arbitration against Bear Stearns, asserting fraudulent misrepresentation and mispricing in its sale of initial portfolio collateral to a cash-flow collateralized debt obligation. The FINRA panel unanimously found in favor of Ramius, holding on clear and convincing evidence that Bear Stearns had fraudulently misrepresented the pricing and value of the ABS collateral.
- We represented a large merger arbitrage fund in a FINRA arbitration against one of the leading global broker-dealers over the liquidation of a swap transaction. After four weeks of hearings spread over three months, we recovered over $10 million for our client in a confidential settlement. The dispute concerned the market quote method of valuing an equity swap under the 1992 ISDA Master Agreement where the broker-dealer sought and received quotes from three reference market makers. We effectively challenged the validity of the settlement value by attacking the quotes as shams which were the product of coaching friendly market makers and manipulating the market price through heavy volume sales.
- We represented XE Capital Management in a case against its joint venture partner for failing to pay commissions into their joint venture, XE-R, LLC. The defendant counterclaimed, seeking control of a third venture and various insurance policies, worth over $250 million. A three member arbitration panel unanimously found in favor of XE Capital, awarding them $10 million in misappropriated commissions and denying all of the defendant's counterclaims.
- We won a $90 million FINRA arbitration award after a two-week arbitration hearing representing hedge fund Rosen Capital against Merrill Lynch. The Wall Street Journal described the award as one of the largest FINRA investor arbitration amounts ever obtained. Rosen alleged in the case that during the market turmoil in late 2008, Merrill Lynch made improper margin calls and otherwise mishandled the hedge fund's prime brokerage account. We obtained Superior Court confirmation of the award, rejecting Merrill Lynch’s challenges, and obtained affirmance from the Second District Court of Appeal.
- We represented the Joint Liquidators of Kingate Euro Fund and Kingate Global Fund, two BVI-based funds that invested more than a billion dollars with Madoff. The Madoff SIPA trustee sued both funds for return of distributions as preferences and fraudulent transfers, and we represented the funds in litigation against the Trustee, including in depositions in various countries. We also represented Kingate Global in dismissing a derivative action brought by a small shareholder in the fund against various third parties, including the fund's auditors and directors.
- We serve as co-lead counsel for a class of major investors, including hedge funds, alleging that the major banks colluded to keep the marketplace for credit default swaps from evolving beyond the “over the counter” system they dominated. The case ultimately settled for $1.87 billion dollars. Large asset managers—heavy users of credit default swaps—were among the largest class members, recovered tens of millions of dollars. The mediator, Judge Weinstein (Ret.), said in support of the settlement: “[I]n 30-plus years of mediating high-stakes disputes, this was one of the finest examples of efficient and effective lawyering by plaintiffs’ counsel that I have ever witnessed.”
- We also serve as co-lead counsel for a class of fund investors alleging that major banks colluded to manipulate the marketplace for interest rate swaps. Asset managers are among the largest users of such swaps, as they represent a key risk-management tool. This is a pioneering lawsuit because it is not an outgrowth of a prior government investigation, an indictment, or a guilty plea; the conduct at issue was instead uncovered and developed by our firm acting as “private attorneys general.” In selecting Quinn Emanuel as co-lead counsel over other plaintiffs’ firms, Judge Paul Engelmayer of the Southern District of New York recognized that “the efforts undertaken by Quinn Emanuel [in crafting the complaint] exceeded the investigative work of the other applicants by an order of magnitude.” Fact discovery saw over 100 depositions taken, and our motion to certify the class involved extensive expert work by both sides. One defendant has settled, pending court approval, for $25 million.
- We are co-lead counsel for a class of investors, including numerous hedge funds, related to alleged manipulation of the benchmark price for gold known as the “London Gold Fix.” This massive class action pending in the Southern District of New York is brought against a group of banks for their involvement in manipulating the gold market. The case resulted in $152 million in settlements.
- We are co-lead counsel in a class action in the Southern District of New York alleging that five of the world’s largest financial institutions conspired to manipulate the multi-trillion dollar market for supranational, sub-sovereign and agency (“SSA”) bonds. The complaint alleges the banks conspired in private chat rooms to rig prices and bid-ask spreads. Quinn Emanuel has obtained final approval for settlements totaling $95.5 million with Defendants Deutsche Bank, Bank of America, and HSBC.
- We obtained dismissal for Citadel Securities in a major multidistrict litigation consolidated in the U.S. District Court of the Southern District of Florida. In the MDL, which arose from the “meme stock” trading restrictions imposed by Robinhood and other broker dealers in late January 2021, Citadel Securities was alleged to be the hub of an anticompetitive conspiracy to protect its alleged short positions by restricting retail investors’ ability to purchase certain securities, in violation of Section 1 of the Sherman Act. Despite the MDL plaintiffs having the benefit of pre-motion to dismiss discovery, Chief Judge Altonaga found the plaintiffs’ allegations of conspiracy insufficient and dismissed the complaint without prejudice, giving the plaintiffs one final opportunity to amend their complaint.
- We represent numerous major asset managers and hedge funds—over 1,300 entities in total—pursuing claims that multiple banks manipulated FX prices, benchmarks, and bid-ask spreads. Our clients, including Allianz Global Investors, BlackRock, Brevan Howard, and PIMCO, opted out of a related class action, and our investigation allowed them to file their own complaint with more than 90 pages of original allegations, showing how the banks should be liable for a conspiracy much broader than being pursued in the class action.
- We represent several investment funds as co-lead counsel on behalf of the class who entered into stock loan transactions with six major banks that serve as prime brokers of stock loans. Plaintiffs allege that the six defendants conspired to overcharge investors and wrongfully control the $1.7 trillion stock loan market, obstructing competition that would benefit both stock lenders and borrowers. In August 2018, Judge Katherine Polk Failla denied the defendants’ motions to dismiss in their entirety. Briefing our motion to certify the class relied on extensive expert work, and led to a full-day hearing by the court. One defendant has settled, pending court approval, for $81 million.
- We represent several hedge funds who are beneficial owners of bonds issued by Argentina pursuant to the Fiscal Agency Agreement dated October 19, 1994 in a dispute arising from one of the largest sovereign debt crisis in history. Argentina defaulted on these bonds in 2001 and has since failed to make payments on either principal or interest due to the bond holders. The amount collectively owed to these bond holders including accrued interest exceeds $400 million. The enforcement litigations are currently ongoing in the Southern District of New York.
- We are co-lead counsel of the international team representing Argentina’s largest creditor, NML Capital, Ltd., in litigation and judgment enforcement proceedings spanning 11 countries on four continents.
- We are lead counsel for Plaintiffs Themis and Des Moines in litigation against of the Democratic Republic of Congo and its central bank to recover US $100 million in defaulted sovereign debt.
- We represent Mark Nordlicht, the founder and former Chief Investment Officer of Platinum Partners, a New York-based hedge fund that at its peak had more than $1 billion in assets under management in connection with a Department of Justice investment fraud action. Following trial in 2019, Mr. Nordlicht was convicted on three counts of an eight-count indictment, at which point he hired Quinn Emanuel to take over his defense and draft post-trial briefs and handle any appeal. On the basis of our post-trial briefs, Mr. Nordlicht’s convictions were vacated as a “manifest injustice” and the case was set for retrial. The government appealed the decision vacating Mr. Nordlicht’s convictions, and the case is now fully briefed before the Second Circuit Court of Appeals.
- On behalf of a class of FX traders, which includes investors and traders of all types including hedge funds, we recently filed a large-scale financial antitrust class action in federal district court, alleging a wide-ranging anticompetitive and fraudulent scheme on behalf of one of the largest foreign exchange platforms, Currenex. We built the claims from scratch after an extensive pre-complaint investigation, and our complaint alleges that Currenex, despite representing itself as adhering to the industry standard “first in first out” (FIFO) matching system, conspired to give superpriority privileges to certain market makers, including State Street (Currenex’s parent company), Goldman Sachs, HC Technologies, and John Doe Defendants. These privileges ensured that the market makers’ orders were matched ahead of others regardless of when the orders were submitted, resulting in increased spreads, reduced competition, and potentially billions of dollars of damages to other users of the Currenex exchange. Our complaint has been the subject of significant attention among practitioners in the FX market.
- We represent a group of the beneficial holders of certain 2024 notes issued by the Greek gaming concern Intralot in connection with the group’s opposition to a July 2021 exchange offer. Our clients opposed the exchange offer because it granted preferential treatment to the holders of a different series of notes that matured in 2021 at the expense of the 2024 group by offering the 2021 noteholders the ability to exchange their notes for a new preferential series of notes to be secured by the assets and equity of Intralot US, which is the crown jewel of the Intralot Enterprise that generates over 70% of the Intralot enterprise’s EBITDA and earnings and to which the 2024 group would otherwise have recourse. The matter is the subject of an action pending in the Southern District of New York, in which the plaintiffs assert claims under New York’s Uniform Voidable Transactions Act. The firm directed the replacement of the Trustee on the 2024 notes who has brought claims asserting breach of the governing indenture.