The partners of Pratt & Flack have represented investors, brokers, brokerage firms, underwriters, and others in a wide array of securities claims ranging from straightforward claims of simple misrepresentation to large, complex, multi-jurisdictional disputes involving the collapse of a Fortune 7 company and the collapse of an international bank.  Representing defendants, we have secured the dismissal of claims relating to securities of every stripe.  Representing investor claimants, we have recovered losses suffered due to securities fraud of every stripe.

We have extensive experience representing parties in FINRA-administered arbitrations.  We have represented brokers, brokerage firms and investors in disputes over trading in securities as varied as collateralized debt obligations, options, commodity futures, bonds, and limited partnership interests.  We have also represented both firms and individual brokers in employment disputes.

Some representative engagements and successes include:

• The representation of ten Enron officers in the litigation and investigations following Enron’s collapse.
• An arbitration award obtained for multiple clients, against a major brokerage firm, who had purchased limited partnership investments in commercial mortgages through what turned out to be largely a Ponzi scheme.  This was the “test” case leading to the settlement of multiple lawsuits and arbitrations brought by approximately 600 investors in a scheme that had reportedly taken in $200 million.
• The successful defense of a major brokerage firm in thirty arbitrations over the past decade.  Results included numerous favorable settlements; most unfavorable award was only 16% of the amount sought (by a 71-year-old claimant); most awards were $0; and on at least one occasion the client was awarded its fees incurred in defending the action.
• An an extremely favorable settlement, after a week of arbitration hearings, for a wealthy Mexican family defrauded by a major U.S. brokerage firm in connection with the investment of over $16 million in synthetic securities.
• The recovery from a major brokerage firm of all losses, plus some, for a group of investors taken in by a broker’s Ponzi scheme involving the sale of non-existent securities.
• Multiple arbitration awards and mid-arbitration settlements for individual investors victimized by rogue brokers.
• The successful defense of a broker against her former firm’s claim for repayment of an employee forgivable loan.  The arbitration award not only denied recovery to the firm, but it also required the firm to pay the broker $140,000 in shorted commissions and attorneys’ fees.

When shareholders and partners in closely-held entities come to odds, the controlling and minority owners usually have very different views of their respective rights.  Whether the issue is suppressed dividends, disagreements over buy-out valuations, management rights, or accusations of outright fraud, the resulting “business divorce” requires legal counsel with experience with these types of disputes and the skill and judgment to take the case to trial.

Some representative engagements and successes of our partners include:

• A recovery obtained for a minority shareholder on the eve of trial, to the shareholder’s great satisfaction, based on the controlling shareholders’ fraud and oppression of the trustee who had controlled the minority stake in a family corporation sold for $145 million.
• The successful defense of, and substantial recovery on the counterclaims for, the defendant in a multi-party battle for control between the limited partners of a major real estate development.
• The successful negotiation of the buy-out of the founder, CEO and 40% shareholder of a company, after his lock-out by the controlling shareholder.

Contracts and allegations of fraud and breach of fiduciary duty are at issue in many, if not most, of the cases for which we are engaged.  Our partners have successfully represented parties in disputes arising out of contracts as varied as stock purchase agreements, marine charters, partnership agreements, operating agreements, equipment manufacturing and sale agreements, and merger and acquisition agreements.  We have successfully defended multiple securities brokerage firms and other corporations, as well as individuals, against claims that they breached the fiduciary duties owed by partners, corporate directors and officers, financial advisors, agents and employees.  We have also obtained substantial recoveries for parties legitimately harmed by breaches of fiduciary duty, including investors, trust beneficiaries, corporate victims of embezzlement, and minority shareholders and non-controlling partners.

Some of our representative engagements and successes include:

• Defeating multi-million dollar claims brought in arbitration against a regional bank for post-closing adjustments under a stock purchase agreement.
• Winning a substantial jury verdict and judgment for fraud and usury in connection with a wrongful real estate foreclosure, and upholding the judgment on appeal.
• Successfully representing the owners of a chartered marine drilling on claims against the operator for its failure to adequately insure the rig.  Worth over $75 million, the rig had been lost in Hurricane Rita.
• Winning the dismissal of a $100 million breach of contract claim against one of the world’s largest software companies.
• Obtaining a $0 award on an arbitration claim seeking more than $15 million for usurpation of corporate opportunities allegedly belonging to a biotechnology company.  
• Recovering a substantial settlement, on the eve of trial, for a Swiss financial advisory firm which sought its finder’s fee commission earned in connection with the $165 million sale of an international oil and gas company.
• Recovering a substantial settlement for a trust beneficiary harmed by the defendants’ participation in the trustee’s breaches of fiduciary duty.
• Successfully prosecuting, through trial and judgment, claims that a major equipment finance company had breached a settlement agreement reached in earlier litigation.
• Successfully representing the President and Fellows of Harvard College on their claims for breach of fiduciary duty against the manager of a joint stock association partially bequeathed to the college.

The enforcement of a non-compete agreement between a company and its former employee, or the defense against such enforcement, requires experienced trial lawyers who are well-versed in the governing laws.  These cases usually start at full speed, with restraining orders and injunction hearings requiring immediate responses and trial lawyers who can quickly learn the facts and present them in court, with briefing on the relevant law, on short notice.  Our experience as trial lawyers and our knowledge of employment law have made us particularly suited for these cases.

Similarly, trade secret disputes require trial lawyers experienced with the hyper-accelerated efforts needed to obtain and enforce the restraining orders and injunctions needed to obtain the return of stolen secrets.  In today’s age of computerized information, accomplishing the theft of a company’s proprietary technology and confidential information can be as simple as inserting a flash drive and clicking “copy.” We have enjoyed success in both proving such theft has occurred and in defending against such allegations.

The timely response to an employment discrimination charge likewise requires a combination of trial skills and a deep understanding of the various statutory and common-law schemes which govern the employer-employee relationship.  We have represented corporations and municipalities large and small in responding to virtually every kind of employment claim, including those under Title VII (discrimination based on race, sex, or religion), the Age Discrimination in Employment Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Worker’s Compensation Retaliation Act, the Sabine Pilot doctrine, the Fair Labor Standards Act, and the Civil Services Act.

We have also represented securities brokers and brokerage firms in disputes involving employee forgivable loans, covenants not-to-compete, misappropriation of confidential information and raiding claims.  And corporate executives are often referred to us for the enforcement of their contractual rights to compensation, stock, and other promised benefits, or to negotiate severance agreements.

On occasion, we represent individual employees referred to us with particularly strong facts indicating that they have suffered unlawful acts by their employers.  We believe that our experience in prosecuting such claims makes us all the more qualified to advise our employer clients on the pitfalls which they should avoid, and on the strengths and weaknesses of the claims they face.

While the lawyers of Pratt & Flack are known primarily for their trial and appellate work, we also advise employers and executives with the goal of avoiding employment disputes before they arise.  We counsel companies large and small on the web of laws governing employee relations, such as Title VII (race and sex discrimination), the Age Discrimination in Employment Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Worker’s Compensation Retaliation Act, the Sabine Pilot doctrine, the Fair Labor Standards Act, and the statutory restrictions on covenants-not-to-compete.

Our pre-litigation employment law services include:

• conducting internal investigations of discrimination complaints and other compliance issues;
• guiding investigations of suspected embezzlement and theft of trade-secrets;
• training supervisors and managers on compliance with anti-harassment, anti-discrimination and other relevant statutes;
• advising on employee disciplines and discharges;
• administering the FMLA, ADEA, ADA, and worker’s compensation statutes;
• drafting and updating employee policies and handbooks; and
• negotiating employment contracts and severance agreements for both companies and executives.

Defending the United States Constitution is not, as a general proposition, an enterprise undertaken for its financial benefits to a firm.  Litigating the fundamental rights guaranteed by our country’s foundational document has nonetheless proven to be some of the most rewarding work we do.

For example, one of our partners successfully tried the Doe v. Santa Fe ISD case, over student prayer rights, in the U.S. District Court for the Southern District of Texas.  He also co-authored the appellate briefs on the case considered first by a panel of the Fifth Circuit Court Appeals, and then by the court sitting en banc.  He then co-authored the petition for certiorari granted and considered by the U.S. Supreme Court in this seminal school prayer case.

Such experience has benefited our commercial and governmental clients by honing the skills necessary to litigate, both at trial and on appeal, the constitutional issues facing businesses and governments in more typical cases.  Such issues within our experience include the jurisdictional reach of state and federal courts; the preemptive power of federal law over state law; the sovereign immunity of state, federal, and international governments and governmental entities; the state constitutional powers of municipal governments; the limits of extraterritorial jurisdiction; the reach of the power of federal courts; and the power of the federal and state governments to control private enterprise.

When claims are asserted against our clients, or they have suffered losses from the wrongdoing of others, a thorough review of their insurance policies is one of the first steps of our representation.

Commonly, given the nature of our practice, our clients doubt that they have insurance coverage for the claims asserted or losses suffered.  This leads them to initially believe the insurers which deny coverage.

This belief is often mistaken.  We have years of experience in obtaining coverage from insurance companies which refused to honor their policies covering claims asserted, or losses suffered.  We have also secured payment of defense costs incurred by companies sued on covered claims and by corporate directors and officers facing derivative and class action lawsuits involving claims for securities fraud, common law fraud, and breach of fiduciary duty.

Our partners’ real estate litigation experience includes disputes involving development partnerships, investors, builders, condemnation, easements, trespass, development contracts, first refusal rights, and title and boundary issues.