Financial Products and Services
- Banking and Financial Institutions
- Credit Default Swaps
- Foreign Currency Trading
- Interest Rate Manipulation
- Lending and Loan Servicing
- Private Label Mortgage-Backed Securities
- Securities Lending
Keller Rohrback has broad experience litigating cases involving complex financial transactions, including private label mortgage-backed securities (“PLMBS”) and other sophisticated finance and lending arrangements. In addition to the firm’s experience representing the large-scale investors in PLMBS litigation, Keller Rohrback has a wealth of experience litigating complex financial fraud claims. Keller Rohrback attorneys have successfully pursued dozens of cases on both an individual and class-wide basis pursuant to federal statutory law, state statutory law, and common law, including claims of misrepresentation, rescission, breach of contract, breach of fiduciary duty, negligence, and statutory securities and ERISA claims. Keller Rohrback has been selected by federal courts to serve as lead or co-lead counsel in cases challenging the mortgage origination and securitization practices of subprime lenders and other financial institutions whose conduct caused significant losses to retirement plans.
Keller Rohrback attorneys’ diverse backgrounds include experience in business management, complex financial transactions, economic analysis, regulatory law, public affairs, and electronic discovery. As a team, Keller Rohrback provides top notch representation to clients in recovering losses from mishandling of financial products and services.
Credit Default Swaps
Currently, Keller Rohrback is investigating potential antitrust violations against 13 major banks and certain entities allegedly controlled by those banks for anticompetitive conduct designed to protect their ability to charge excessive bid-ask spreads in Credit Default Swap (“CDS”) trades. The anticompetitive conduct involves efforts to block certain exchanges from entering the market through fee-rigging – preventing equal access to transparent pricing information. Keller Rohrback’s experience working with institutional investors in matters involving large investments makes the firm uniquely situated to investigate and prosecute CDS antitrust violations giving rise to billions of dollars in potential liability.
Foreign Currency Trading
Foreign exchange is a necessary component of all international investment transactions, yet the foreign exchange market is one of the least transparent and least regulated of the international markets. The large banks and other financial institutions that make up this market act as market-makers and trade currencies amongst each other in this $5.3 trillion-a-day market. The lack of regulation in the marketplace makes it easy for the banks to manipulate transactions and the rates at which they are effected to their advantage – at the expense of their clients. Given the extraordinary value of the transactions at issue, a relatively modest manipulation may have dramatic consequences for various entities in the financial system.
Keller Rohrback’s practice encompasses a range of foreign exchange issues on behalf of institutional investors. Keller Rohrback currently represents institutional investors and ERISA plans in two ongoing class actions concerning foreign currency trading abuses against Bank of New York Mellon and State Street Bank and Trust Company.
Interest Rate Manipulation
Keller Rohrback represents institutional funds pursuing claims based on the manipulation of London Interbank Offered Rate (“LIBOR”) by LIBOR banks in a case filed in New York state court. These claims are based, in part, on extensive investigations carried out by government agencies around the globe that have resulted in record-breaking fines and binding admissions of misconduct from the LIBOR banks. In light of this global scandal, investors including funds, insurance companies, and municipalities have all commenced litigation against the LIBOR banks.
Private Label Mortgage-Backed Securities
Keller Rohrback is uniquely positioned to be an effective advocate for investors on claims involving PLMBS. Based on the firm’s extensive experience in securities fraud and other litigation involving mortgage-backed securities and subprime lending, Keller Rohrback attorneys and legal staff are experienced and ready to identify, review, and vigorously pursue their investors’ strongest claims. Keller Rohrback regularly represents plaintiffs—including both institutions and individuals—in complex and class action cases.
The principal claims arising out of investment in PLMBS and investment instruments related to PLMBS, such as credit default swaps (“CDS”) and collateralized debt obligations (“CDO”), involve misleading statements and omissions made in connection with the sales of the securities in offering documents. These claims are most often based on violation of the applicable state securities blue sky laws, federal securities laws, and common law. Defendants include the issuers of the securities, underwriters, control persons, and other persons directly or indirectly involved in the sales (including, for example, credit rating agencies whose ratings misrepresented the credit quality of the securities). Depending on the location of the parties involved in the sale of securities, additional claims for fraud, negligence, breach of contract, unjust enrichment, unfair competition, or interference with contract or prospective economic advantage may also exist under the laws of multiple states.
Keller Rohrback currently represent the Federal Home Loan Banks of Boston, Chicago, and Indianapolis (“FHLBs”) in litigation against dozens of issuers, underwriters, and sponsors of PLMBS. The relief sought by the FHLBs includes rescission and damages under state blue sky laws and the federal securities laws, negligent misrepresentation, interest, and attorneys’ fees and costs. The complaints name over 120 defendants and involve over 200 securities with an original face value of $13 billion.
Securities lending is a service typically offered by asset managers to their institutional clients. The bank or asset manager’s clients lend out their shares to other people in order to receive interest income on the loan. Securities lending is a common practice for institutional investors including mutual funds, insurance companies, pension plans, and others with large investment portfolios who are seeking to earn incremental returns on their portfolio to aid in covering their investment management fees. When the loan is made, the borrower is required to provide the lender with collateral in the form of cash or other securities of equivalent value. Prudent and conservative investment of the cash collateral is required so that it can be returned to the borrower at the conclusion of the loan. As payment for the loan, the parties negotiate a fee for the value of the loaned securities. For this reason, it is imperative that the bank or asset manager also aggressively negotiate and monitor the fees for the loaned securities.
Keller Rohrback represents institutional investors and is co-lead counsel on behalf of public pension funds in ongoing litigation against Northern Trust alleging that Northern Trust imprudently invested its clients’ cash collateral in risky and long-term securities and breached its legal and contractual obligations to its clients.