Our lawyers combine an understanding of issues facing our clients with broad experience in defending against allegations of violations of the federal securities laws. During the past 20 years, Sidley lawyers have been at the forefront of addressing issues like scienter, class certification and loss causation that arise in every securities class action. We regularly address those issues from the perspective of the accountant, giving thorough consideration, for example, to the implications of the Supreme Court’s Central Bank
decision, issues of loss causation and the insufficiency of allegations that auditors missed alleged “red flags” to establish scienter.
Bringing this experience to bear, Sidley regularly represents accountants named as defendants in securities class actions, including with respect to claims brought under Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. We often have prevailed on such claims on dispositive motions. We also have extensive experience in matters subject to the Private Securities Litigation Reform Act of 1995 and the Securities Litigation Uniform Standards Act of 1998.
In addition to the success Sidley has achieved in representing U.S. accounting firms, Sidley also regularly represents entities domiciled outside the U.S., including both coordinating entities of large networks of accounting firms, as well as individual firms that actually practice in other countries. Those representations often arise in the context of allegations of secondary liability of those firms for the alleged actions of another accounting firm. Sidley’s clients have prevailed on several motions to dismiss such claims in high profile matters.
Our lawyers also have extensive experience defending opt-out suits and suits brought by individual investors alleging violations of the securities laws. We recently represented one of our accounting firm clients in two separate arbitrations involving more than one hundred claimants who had raised allegations of fraud in connection with the issuance of securities by a start-up company. Our client prevailed on all counts against all claimants in both arbitrations.
The breadth of experience of Sidley’s Accountants/Professional Service Firms Liability
practice is perhaps best demonstrated by the broad range of issues we have handled in recent years. Sidley lawyers have dealt with a wide variety of accounting issues, including allegations concerning accounting for stock options, projections, revenue recognition policies and practices, technology licenses, undisclosed related party transactions, accounting for acquisitions, divestitures, joint ventures and other transactions, accounting for research and development, software accounting, pension accounting, the obligations of governmental entities to report on compliance with laws and regulations, reporting of investments, accounting for derivatives and accounting for marketing activity. Sidley has handled cases involving numerous industries, including cases involving audits of agricultural concerns, banks, franchisors, governmental units, healthcare companies, insurance companies, investment firms, manufacturers, oil and gas ventures, pension funds, public utilities, retailers, real estate partnerships, savings and loans, software developers, sub-prime lenders, technology and telecommunications companies and transportation companies. In handling these matters, the full-service nature of our firm allows us to bring significant industry experience from multiple disciplines to bear on virtually any issue.