Litigation > Investment Funds Litigation

For more than twenty years, Akin Gump Strauss Hauer & Feld LLP has focused on serving the legal needs of private investment fund clients in fund formation and structure, tax, corporate and securities, financial restructuring and litigation. During that time, we have amassed a nationwide pool of experienced litigators dedicated to the varied needs of fund clients. Our investment funds litigation practice works hand in hand with the firm’s renowned investment funds practice that spans London, New York, Washington and Dallas. We have represented many of the largest and best-known fund managers—as well as their principals, portfolio managers, traders and other key executives—in crucial, high-stakes litigation matters. Our funds litigators enjoy in-house support from a cutting-edge tax practice dedicated to the representation of onshore and offshore fund clients, as well as from a market-leading financial restructuring practice that regularly represents distressed funds and other bondholders in major bankruptcy cases across the country.

Our Team

Our investment funds litigation team is experienced in complex commercial litigation, including civil securities litigation, in state and federal courts and arbitral panels across the country. The team also includes a highly regarded white collar and regulatory enforcement practice led by former federal prosecutors and enforcement attorneys who regularly represent clients before the Securities and Exchange Commission (SEC); National Association of Securities Dealers (NASD); New York Stock Exchange (NYSE); Financial Industry Regulatory Authority (FINRA); Commodity Futures Trading Commission (CFTC); the U.S. Department of Justice (DOJ); offices of various state attorneys general; and other federal, state, and foreign government agencies and regulators.

Our Clients

We regularly represent the world’s largest and most prominent investment funds in a variety of litigation matters. These clients represent a broad and diverse range of funds, including:

  • hedge funds
  • distressed securities funds
  • private equity funds
  • real estate funds
  • convertible arbitrage funds
  • activist strategy funds
  • short-selling strategy funds
  • traditional long equity funds
  • multi-strategy funds
  • energy funds
  • funds of funds
  • emerging markets funds
  • credit opportunities funds
  • sovereign wealth funds
  • university endowment funds.

Our Experience

We advise investment fund clients on a broad range of matters, including:

  • DOJ, SEC, CFTC, FINRA and other government agency and self-regulatory organization investigations regarding trading practices
  • SEC and National Futures Association compliance examinations
  • redemption gates, suspensions and other capital withdrawal disputes
  • separation agreements with departing partners to resolve equity participation and other compensation issues
  • limited partner/general partner disputes, general partner removals, disputes among fund principals and conflicts of interest
  • disputes with issuers (e.g., in connection with the rights of holders of convertible securities)
  • public portfolio companies, their officers and directors, and major shareholders in securities class actions and derivative actions
  • internal investigations of portfolio companies, including in emerging markets
  • portfolio company boards regarding “going private” and other interested transactions
  • merger arbitrage funds on public M&A deals
  • regulatory filings and licensing approval process
  • real estate funds in resolving disputes with, and prosecuting actions against, defaulted borrowers in connection with mezzanine financings, including Uniform Commercial Code (UCC) foreclosure proceedings
  • regular on-site training programs for traders and portfolio managers with regard to insider trading issues and best practices
  • distressed funds and bondholder groups in federal bankruptcy court and cross-border insolvency proceedings,
  • Foreign Corrupt Practices Act (FCPA) and U.K. Bribery Act investigations
  • securities class action and shareholder derivative litigation.

Representative Matters

The following are some representative engagements:

  • achieved favorable settlement for multi-billion dollar hedge fund in connection with multiple securities and derivative class action lawsuits arising out of alleged misconduct at one of the investment firm’s special situation investments
  • achieved complete dismissal on behalf of persons and entities associated with two investment funds in a lawsuit brought by the former chairman and Chief Executive Officer of an affiliate company in connection with the termination of his employment and equity interests at the affiliate company
  • achieved complete dismissal of a university endowment investment vehicle from a putative class action in Delaware Chancery Court alleging aiding and abetting breaches of fiduciary duties in relation to a shareholder vote related to conversion and voting caps
  • represented a hedge fund in precedent-setting proxy litigation against the largest technology company in the world; obtained injunctive relief prohibiting the company from holding a shareholder vote that would have been unfair to our client and other shareholders
  • represented an investment advisor and its principal in a securities class action and multiple shareholder derivative lawsuits alleging fraud and breach of fiduciary duty; obtained dismissals of all actions, which were upheld by the U.S. Court of Appeals for the Eleventh Circuit
  • represented a university investment fund that was sued under Section 16(b) of the Securities Exchange Act of 1934 for the recovery of alleged short-swing profits
  • defended a multi-billion-dollar hedge fund and several employees in an SEC investigation and shareholder derivative and class action lawsuits based on alleged accounting improprieties at a public company where majority shareholder employees served as board members
  • represented a hedge fund that ran a well-publicized proxy contest for the control of the board of directors of one of the country’s largest restaurant companies 
  • represented two investment funds in an action for misappropriation and breach of fiduciary duty in New York State Supreme Court against the issuer of convertible preferred stock; case won at trial
  • represented investment funds in dispute in Oklahoma federal court related to a hostile tender offer against energy company; case settled and transaction completed
  • represented an investment fund in a dispute with New Zealand regulators regarding acquisition of shares of a New Zealand issuer; resolved after hearing for no financial penalty
  • represented a hedge fund in an executive termination case involving claims of breach of a partnership agreement, fraud and defamation with more than $150 million in controversy; after six-week bench trial, obtained a complete victory for client, including award of attorney’s fees
  • represented a fund manager in a CFTC enforcement proceeding arising from end-of-day trading in platinum and palladium futures contracts; matter was resolved
  • represented a fund manager in a Financial Services Authority (FSA) enforcement proceeding alleging insider dealing in violation of U.K. law; after a contested hearing, the FSA found that the fund manager was liable for “inadvertent” violation of U.K. law with no scienter
  • represented a fund manager in a lawsuit involving allegations of an illegal short-selling scheme; obtained dismissal with prejudice of the claims against our client on constitutional grounds
  • represented an investment fund defending an aiding and abetting fraud action in New York State Supreme Court; won dismissal on three of four claims asserted against our client and actively litigating the sole remaining claim
  • represented a private equity fund and its portfolio company in a breach of fiduciary duty action following a purchase and sale agreement; the case settled favorably for our client
  • represented a fund manager in New York Attorney General and internal investigations arising from the use of expert networks; investigation was closed with no charges against our client, and client adopted enhanced compliance procedures
  • represented a fund manager in a CFTC investigation of potential market manipulation in foreign currency markets; investigation was closed with no charges against our client
  • represented a fund manager in a CFTC investigation of trade allocations among funds; investigation was closed with no charges against our client 
  • represented a fund manager in an SEC investigation of allegedly improper CDO trading; investigation was closed with voluntary repayment of allegedly unfair gain and no charges against our client
  • represented an analyst in connection with investigations by the SEC, DOJ and Congress into issues related to the application of the insider trading rules to the political intelligence industry under the STOCK Act
  • represented an investment fund in two separate lawsuits involving its portfolio company; achieved dismissal before the federal district court in Colorado of a securities class action alleging that the portfolio company made misleading statements to inflate its stock prices to facilitate sales by our client and other defendants; also achieved dismissal before the Delaware Court of Chancery in a breach of fiduciary duty in connection with the drop in share price of the portfolio company
  • achieved complete dismissal from a federal securities class action in the Southern District of New York for an emerging markets fund in relation to a portfolio company’s investment in a China-based company that went public on the NYSE
  • achieved a favorable settlement for a group of investment fund clients, including major university endowment and pension funds, in relation to a dispute with a general partner who improperly removed money from the funds for undisclosed “fees” without consent
  • represented a major university endowment fund in a derivative action in Delaware Chancery Court regarding an investment in a public company that is undergoing a Special Litigation Committee investigation
  • assisted funds clients with matters involving various investments in relation to the Madoff Ponzi scheme.