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Financial Institutions Litigation

Primary Practice Contacts W. Scott Porterfield & Roger H. Stetson

National Practice. The litigators in the Firm’s Financial Institutions Group have extensive experience representing and counseling banks and other financial institutions in high stakes litigation, pre-litigation, regulatory proceedings, and internal investigations across the country.  Such matters include:

  • class actions,
  • regulatory, criminal, and internal investigations, FDIC actions against directors and officers of failed banks,
  • shareholder litigation,
  • creditor’s rights cases, and
  • other individual and business disputes relating to the provision of financial services.

Leveraging Industry Experience. The Firm’s Financial Institutions litigation teams regularly leverage the vast experience of our regulatory colleagues, many of whom have government experience, to mitigate risk and efficiently resolve those litigation and regulatory issues that develop into litigation, regulatory, or investigation proceedings.

Results. The strength of the Firm’s Financial Institutions litigation practice is reflected in the depth and breadth of its experience and in the exceptional results achieved on behalf of the Firm’s financial institutions clients.  It is also reflected in the fact that the Firm is regularly retained by financial industry leaders (including, for example, the Illinois Bankers Association) to file amicus curiae (friend of the court) briefs in lawsuits involving issues of particular interest to the financial institutions industry.

Recent Representative Experience

Class Actions

  • M&A Strike Suits. Defense of buyers and sellers of bank holding companies in class actions alleging breach of fiduciary duty by directors of selling bank. 
  • ADA Website Compliance. Defense of banks in threatened class actions asserting that the bank’s website does not comply with the accessibility requirements of the Americans with Disabilities Act.
  • Overdraft Fees and Item Processing. Defense of banks in class actions challenging the bank’s policies and practices relating to overdraft fees and item processing.
  • ATM Fees. Defense of banks in class actions relating to ATM usage fees, including (1) claims relating to the adequacy of the bank’s disclosures regarding ATM fees and (2) claims relating to the bank’s compliance with (now defunct) EFTA and Regulation E ATM fee notice requirements.
  • Ponzi Schemes.  Defense of banks in class actions in which the plaintiffs, individuals who invested their self-directed IRA funds in a Ponzi scheme, alleged various breaches by the bank as primary custodian for those IRA accounts. 
  • Stock Drops.  Defense of banks in “stock drop” class actions, including action in which plaintiffs alleged that the bank breached its fiduciary duties under ERISA by retaining company stock in its retirement plan.

Other Complex Commercial Litigation

  • M&A Suits. Defense of banks and other financial institutions in actions relating to mergers and acquisitions, including actions involving alleged fraud in the sale of assets of failed bank.
  • Trust Services Suits.  Defense of banks in actions involving claims of breach of fiduciary duty, breach of express or implied contract, and fraud in connection with the bank’s provision of trust services.
  • Consumer Claims. Defense of banks in actions by customers alleging breach of express or implied contractual obligations, breach of fiduciary duty, and fraud in the bank’s performance of its obligations under the account agreement.
  • Income Tax Refund Suits. Defense of bank’s perfected security interest in $260 million tax refund to a bank holding company against adverse claim by FDIC, as receiver for the holding company’s subsidiary banks.
  • Inter-Bank UCC Suits. Representation of banks in disputes with other banks under UCC Article 4 regarding which financial institution should bear the loss when a check or other instrument is improperly paid. 
  • Embezzlement Suits.  Defense of banks in actions in which plaintiffs attempt to shift the loss associated with embezzlement or other wrongdoing by plaintiffs’ own employees to banks based on claims of breach of fiduciary duty and breach of UCC presentment and transfer warranties.
  • Creditor’s Rights Suits. Defense of bank in action for more than $1 billion brought by creditors of the bank’s bankrupt borrower.
  • Constructive Trust Suits. Defense of bank holding company in action in which plaintiff attempted to impose a constructive trust on funds on deposit at the bank holding company’s banking subsidiary.
  • Bankruptcy Trustee Suits. Defense of banks in actions by bankruptcy trustees asserting lender liability and deepening insolvency theories of liability.
  • Creditor Priority Suits. Representation of financial institution in breach of contract lawsuit over priority in commercial real estate foreclosure.
  • Securities Fraud Suits.  Representation of law firm in securities fraud litigation relating to failed savings and loan.
  • Responses to Subpoenas and Other Third Party Proceedings.  Representation of banks and their directors and officers in responding to subpoenas in civil, criminal, and regulatory proceedings.

Regulatory Enforcement Investigations, Actions & Internal Investigations

  • Regulatory Actions & Investigations.   Representation of banks and other financial institutions in enforcement actions and investigations by federal and state regulators, including the SEC, OCC, FDIC, and DOJ. 
  • TARP Investigations.  Representation of banks in investigations by state and national regulators, including DOJ, regarding use of TARP funds.
  • Accounting Fraud Investigations.  Conducted internal investigations for banks and other financial institutions, including relating to claims of potential financial accounting fraud.

Financial Institution Director-Officer Litigation & Bank Shareholder Disputes

  • Failed Banks.  Defense of directors and officers of failed banks in actions and investigations by the FDIC, as well as representation and counseling of others who were not subject to formal investigations or suit by the FDIC.    
  • Bank-Shareholder Disputes.  Representation of banks and other financial institutions in shareholder disputes. 
  • Shareholder Disputes.   Representation of shareholders of closely-held bank holding companies in disputes between shareholders.
  • Insurance Coverage.  Representation of banks in disputes with their insurers over fidelity bond, Director & Officer, and General Liability policies and coverage issues.

Extraordinary Creditor’s Rights Cases

  • Creditor’s Rights.  Representation of banks and other financial institutions in disputes with borrowers and guarantors, including in connection with real estate developments that crashed in 2008, thereby giving rise to tens of millions of dollars in liability.