“Sidley Austin is the best in the business at activism defense work.”
Chambers USA 2024
Sidley advises public companies and their boards of directors in preparing for, defending against, and responding to public attacks initiated by notorious short sellers. Our dedicated team combines partners from our No. 1-ranked Shareholder Activism and Corporate Defense practice with Sidley’s market-leading Securities Enforcement and Regulatory, Securities and Shareholder Litigation, Capital Markets, Corporate Governance, and White Collar Defense and Investigations practices. Our team has extensive experience defending public companies against these types of attacks by all major notorious short sellers: Muddy Waters, Citron, Spruce Point, Pershing Square, Hindenburg, Greenlight, The Bear Cave, J Capital Research, GlassHouse, Boatman Capital, Culper, and Aurelius Value.
We have a broad service offering to assist our clients with all of the potential repercussions of a public short seller attack:
- We assist boards of directors and management teams in forming a comprehensive response, including analyzing negative allegations, determining whether false or defamatory statements have been made, evaluating potential market manipulation or securities law violations by the attacking short seller, and designing a communication strategy for effective and legally compliant messaging to stockholders and other stakeholders.
- Boards of directors frequently form a special committee of independent directors to investigate claims contained in a short report. Our team regularly serves as counsel to these special committees in investigating the claims in a published short report to assist directors in fulfilling their fiduciary duties.
- SEC enforcement or DOJ investigations often follow published short seller reports. Our team includes a substantial number of SEC and DOJ alumni, has extensive experience advising companies in these investigations, and a track record of obtaining successful results.
- Plaintiff law firms often publicly announce investigations into a company following a published short report. Our team has extensive experience in successfully defending companies in related securities class action and derivative lawsuits.
- Where appropriate, we advise on initiating counter legal proceedings, including seeking injunctions to prevent further dissemination of harmful statements, filing defamation or libel lawsuits against parties responsible for spreading false information, and pursuing claims for damages suffered as a result of a public short attack.
In the aftermath of public short attacks, public companies often face shareholder activist campaigns or hostile takeover bids, and our team prepares clients for these contingencies. Sidley’s Shareholder Activism and Corporate Defense practice is widely recognized as the go-to activism defense practice, with No. 1 rankings for this kind of work across all league tables and major directories:
- Band 1 in Chambers USA in New York for “Corporate/M&A: Takeover Defense” annually since 2022
- Tier 1 in The Legal 500 in the U.S. for “Shareholder Activism – Advice to Boards” annually since 2022
- No. 1 in all shareholder activism defense league tables since 2020, including:
- No. 1 in Bloomberg’s Global Activism League Tables for company representations
- No. 1 in FactSet’s Company Defense League Tables for company representations
- No. 1 in LSEG’s Global Shareholder Activism Rankings for company representations
- No. 1 in Diligent Market Intelligence’s Activism Advisor Awards for total issuer representations
