Hedge Fund and Private Equity Litigation


Sidley offers our clients complex litigation resources to manage the unique legal and business challenges that accompany doing business in the investment funds industry. To provide truly comprehensive and client-focused representation, our fund litigation lawyers work closely with leading professionals from the firm’s Investment Funds, Advisers and Derivatives, Corporate M&A, Securities & Derivatives Enforcement and RegulatoryCorporate Reorganization and Bankruptcy and Securities and Shareholder Litigation practices. This collaborative style of representation allows our lawyers to better anticipate potential risk issues, develop strategies on how to best avoid litigation and minimize disruption to our clients.

We represent some of the most prominent names in alternative and traditional asset management in fund-related civil litigation, including arbitrations, and internal and government investigations. Specifically, our practice represents a wide range of clients in the following roles:

  • Hedge fund managers
  • Investment advisors
  • Private equity fund managers
  • Commodity pool operators
  • Commodity trading advisers
  • Broker-dealers
  • Mutual fund board members

Our lawyers are well versed in litigation involving investors, valuation issues, shareholder derivative litigation, creditor or trustee claims in bankruptcy and enforcement actions brought by the SEC, the CFTC, FINRA and NFA, as well as by exchanges in New York and Chicago.

Recognition for our practice

Our work for clients has earned us acknowledgement in numerous industry publications. This includes being named “Investment Funds Team of the Year for the U.S.” by Chambers & Partners in 2013 and 2008. Sidley is also one of two firms to have been recognized as a top-tier Investment Funds – Hedge Funds firm in Chambers USA since the inception of the category rankings in 2008. In its 2014 edition, Chambers USA acknowledged the Investment Funds – Hedge Funds practice for being a “premier hedge fund team offering a comprehensive service to some of the industry’s largest participants.” Additionally, Chambers & Partners has recognized Sidley as a leading Investment Funds – Registered Funds firm during the same time period.

Sidley was named the 2014 U.S. News – Best Lawyers “Law Firm of the Year” in the area of Private Funds/Hedge Funds Law. The “Law Firm of the Year” designation is bestowed on one firm in each national practice area that has an impressive overall performance based on U.S. News – Best Lawyers research. According to the publication: “If you manage a hedge fund, Sidley is simply the best firm out there.” The firm was also recognized as the “Top ‘Onshore’ (U.S.) Law Firm” serving the hedge fund industry in the 2014 Alpha Awards by Institutional Investor’s Alpha magazine.

Sidley offers our clients complex litigation resources to manage the unique legal and business challenges that accompany doing business in the investment funds industry. To provide truly comprehensive and client-focused representation, our fund litigation lawyers work closely with leading professionals from the firm’s Investment Funds, Advisers and Derivatives, Corporate M&A, Securities & Derivatives Enforcement and RegulatoryCorporate Reorganization and Bankruptcy and Securities and Shareholder Litigation practices. This collaborative style of representation allows our lawyers to better anticipate potential risk issues, develop strategies on how to best avoid litigation and minimize disruption to our clients.

We represent some of the most prominent names in alternative and traditional asset management in fund-related civil litigation, including arbitrations, and internal and government investigations. Specifically, our practice represents a wide range of clients in the following roles:

  • Hedge fund managers
  • Investment advisors
  • Private equity fund managers
  • Commodity pool operators
  • Commodity trading advisers
  • Broker-dealers
  • Mutual fund board members

Our lawyers are well versed in litigation involving investors, valuation issues, shareholder derivative litigation, creditor or trustee claims in bankruptcy and enforcement actions brought by the SEC, the CFTC, FINRA and NFA, as well as by exchanges in New York and Chicago.

Recognition for our practice

Our work for clients has earned us acknowledgement in numerous industry publications. This includes being named “Investment Funds Team of the Year for the U.S.” by Chambers & Partners in 2013 and 2008. Sidley is also one of two firms to have been recognized as a top-tier Investment Funds – Hedge Funds firm in Chambers USA since the inception of the category rankings in 2008. In its 2014 edition, Chambers USA acknowledged the Investment Funds – Hedge Funds practice for being a “premier hedge fund team offering a comprehensive service to some of the industry’s largest participants.” Additionally, Chambers & Partners has recognized Sidley as a leading Investment Funds – Registered Funds firm during the same time period.

Sidley was named the 2014 U.S. News – Best Lawyers “Law Firm of the Year” in the area of Private Funds/Hedge Funds Law. The “Law Firm of the Year” designation is bestowed on one firm in each national practice area that has an impressive overall performance based on U.S. News – Best Lawyers research. According to the publication: “If you manage a hedge fund, Sidley is simply the best firm out there.” The firm was also recognized as the “Top ‘Onshore’ (U.S.) Law Firm” serving the hedge fund industry in the 2014 Alpha Awards by Institutional Investor’s Alpha magazine.

Experience

Regulatory Enforcement Action Experience

We have extensive regulatory experience and have represented our Funds clients before the SEC, FINRA, CFTC and NFA in investigations and enforcement actions, including allegations relating to fraud, accounting improprieties (including restatements), trading violations, insider trading, and the Foreign Corrupt Practices Act. Many of these matters are non-public, and thus precludes the listing of particular clients. We have also represented clients in connection with SEC compliance exams.

Recent regulatory enforcement experience includes:

  • Represented several hedge fund managers and private equity fund managers before the SEC on a variety of issues, including issues involving “consistent” returns, statements in disclosure documents, fee structures, trading practices, and insider trading.
  • Represented hedge fund managers before FINRA on issues relating to trading practices, advertising and marketing.
  • Represented hedge fund managers, commodity pool operators and futures commission merchants before the CFTC, NFA, and U.S. futures exchange on a variety of issues, including issues regarding commissions and trading.

Civil Litigation

Our Funds litigators have handled numerous jury trials and bench trials involving disputes among principals of hedge fund managers and investment advisors, disputes with investors, shareholder derivative litigation, and “claw back” claims in bankruptcy proceedings. Representative matters include:

  • Represented a large commodity pool operator in a variety of actions stemming from the Refco bankruptcy. We successfully recovered all our client’s assets from the Refco bankruptcy estate following a trial in the New York bankruptcy court, and achieved dismissal of derivative actions brought by investors.
  • Represented a large foreign bank in litigation in Florida regarding bank’s investment in a hedge fund that had suspended redemptions.
  • Represented a large foreign bank, which acted as an investment advisor, in a securities fraud action in the Eastern District of Virginia involving claims stemming from alleged accounting fraud.
  • Defended a brokerage firm charged with securities fraud in the Northern District of Illinois based on alleged commercial bribery of traders.
  • Represented a hedge fund in a trial in Delaware bankruptcy court in “claw back” action by the Trustee in the SemGroup bankruptcy proceeding.
  • Defended a hedge fund against investors fraud claims in a 23-day trial in Cook County Circuit Court.
  • Represented hedge funds in variety of actions in Minnesota bankruptcy court, District Court and the Eighth Circuit Court of Appeals relating to the Petters Ponzi scheme.
  • Represented several large public companies in actions against the Reserve Funds when those funds “broke the buck.”
  • Represented a large pooled investment vehicle in “claw back” and related litigation in Northern District of Illinois against the liquidation trustee for Sentinel Management Group, a failed investment advisor and futures commission merchant.
  • Brought suit on behalf of a large “fund of funds” against real estate investment fund that had breached contractual obligations governing investment.

We have also brought and defended numerous arbitration claims for various Funds clients. Representative matters include:

  • Represented a hedge fund manager headquartered in Chicago in AAA arbitration involving claims brought by a third-party marketer claimed that it was entitled to solicitation fees.
  • Represented a London hedge fund manager in disputes with co-investor in AAA arbitration.
  • Represented a large investment manager in AAA arbitration against customer claims relating to multi-million dollar losses sustained from investment in Madoff Securities.
  • Represented a large foreign bank in JAMS arbitration brought by hedge fund manager in connection with alleged promise of “seed” investment by bank.