Concentration

Securities litigation and arbitration

Summary

David Sterling is the co-chair of the firm’s securities litigation practice group. He principally represents issuers and underwriters in securities fraud class actions; corporate officers and directors in derivative lawsuits; broker-dealers in securities lawsuits and arbitrations and companies and their directors in merger and proxy litigation.

Mr. Sterling also represents brokerage firms and individuals in investigations and proceedings before a variety of agencies, including the SEC, NYSE, NASD, Department of Justice and Texas State Securities Board. He represents special litigation committees and audit committees in connection with investigations and derivative litigation. In October 2002, the only year such a category was recognized, Mr. Sterling was named one of five “Go To” securities lawyers in Texas by Texas Lawyer.

Representative Engagements

Securities Class Actions

• Defense of Halliburton in securities fraud class action; the district court denied class certification, and the Fifth Circuit affirmed (Archdiocese of Milwaukee Supporting Fund v. Halliburton Co., 597 F.3d 330 (5th Cir. 2010)) Mr. Sterling argued the case in the U.S. Supreme Court on April 25, 2011.
• Defense of Zonagen and its officers and directors in class action securities fraud suits, dismissed by the trial court and largely affirmed on appeal, with the claim which was reversed by the Fifth Circuit being subsequently resolved in favor of Zonagen on summary judgment (Nathenson v. Zonagen, Inc., 267 F.3d 400 (5th Cir. 2001))
• Defense of Baker Hughes along with its officers and directors in class action securities fraud suit, with the suit being dismissed and affirmed by the Fifth Circuit (Abrams v. Baker Hughes Inc., 292 F.3d 424 (5th Cir. 2002))
• Defense of Torch Offshore and its officers and directors in class action securities litigation in New Orleans, with the case being dismissed and affirmed on appeal (Kapps v. Torch Offshore, Inc., 379 F.3d 207 (5th Cir. 2004))
• Defense of Link Energy and its directors in a breach of fiduciary duty class action, with the claims being dismissed on summary judgment (Blackmore Partners, L.P. v Link Energy, LLC, 864 A.2d 80 (Del. Ch. 2004)
• Defense of inside directors of Landry’s in class action securities case relating to CEO’s offer to take the company private; case settled
• Defense of Repros Therapeutics and its officers and directors in a class action securities fraud suit; the district court granted our motion to dismiss in January 2011

Merger Class Actions

• Defense of Lyondell Chemical Corp. and its directors in a shareholder class action seeking to enjoin Lyondell’s merger with Basell AF; plaintiff’s motion to enjoin the shareholder vote was denied, and the Lyondell defendants obtained summary judgment (Lyondell Chem. Co. v. Ryan, 970 A.2d 235 (Del. 2009))
• Defense of Perot Systems and its directors in a shareholder class action seeking to enjoin Perot Systems’ merger with Dell; plaintiff’s motion to enjoin the transaction was denied and the case was subsequently dismissed
• Representation of Mariner Energy in class action lawsuits alleging that Mariner’s directors breached their fiduciary duties in connection with Mariner’s merger with Apache
• Defense of Encore Acquisition and its directors in shareholder class action seeking to enjoin Encore’s merger with Denbury Resources
• Defense of United Airlines in class action lawsuits challenging United’s merger with Continental
•  Defense of Halliburton in class actions challenging Halliburton’s merger with Boots & Coots, Inc.
• Defense of Frontier Oil and its directors in class actions challenging Frontier’s merger with Holly Corporation
• Defense of Allis-Chalmers and its directors in class actions challenging Allis-Chalmers’ merger with Seawell
• Defense of Hercules Offshore, Inc. in litigation over the company’s merger with TODCO
• Defense of founders, directors, and largest shareholders of Tanox, Inc. in class action litigation over Tanox’s merger with Genentech; the merger closed and our clients were granted summary judgment

Derivative Actions

• Representation of the Special Litigation Committee of Fleming Companies in connection with two derivative suits
• Defense of Baker Hughes along with its officers and directors in derivative suit, with the suit being dismissed by the district court
• Defense of EGL, Inc. in derivative litigation over the company’s going private transaction; injunctive relief was denied, the deal closed and the cases were dismissed
• Representation of the CEO and other senior executives of Landry’s in derivative litigation and investigation over options granting practices
• Representation of Sulphco outside directors in a derivative suit
• Representation of Imperial Sugar in a derivative action arising out of an explosion of a plant
• Representation of Special Litigation Committee of Meridian Resources in a derivative action relating to its merger with Alta Mesa Holdings
• Representation of ICO in a derivative action relating to its merger with A. Schulman

Other Securities Litigation

• Defense of Credit Suisse and Deutsche Bank in fraud and tortious interference suit brought by Huntsman Corporation over Huntsman’s failed merger with Hexion
• Representation of Morgan Stanley (then Dean Witter) in a trial involving a broker who allegedly stole from his mother’s account, with the trial court rendering judgment for the firm following a jury verdict, affirmed by the court of appeals (Millan v. Dean Witter Reynolds, Inc., 90 S.W.3d 760 (Tex. App.-San Antonio 2002, pet. denied))
• Representation of Morgan Stanley in a selling away trial in federal court in Amarillo, with the jury rendering a defense verdict
• Representation of Morgan Stanley in a securities fraud trial in federal court in San Antonio, with the court granting Morgan Stanley a directed verdict, affirmed by the Fifth Circuit (Gonzalez v. Morgan Stanley Dean Witter, Inc., 188 F. App’x 295 (5th Cir. 2006))
• Representation of major broker-dealers in over fifty arbitrations involving alleged unsuitability, churning, unauthorized trading, misrepresentation and selling away

Publications, Speeches and Presentations

• “This Deal Will Self-Destruct in 5 Seconds: Deals Gone Bad - Liability, MAC Clauses, Solvency and Damages,” NERA Economic Consulting’s 13th Finance, Law & Economic Seminar, Jackson Hole, Wyoming, July 2010
• “Securities Law Update, Both Private and Public Companies,” University of Houston Law Center, Houston and Dallas, October 2007
• “Aiding and Abetting: The Expanding Zone of Liability Under Texas and Federal Securities Laws,” 4th Annual Advanced Business Law Course, State Bar of Texas, Houston, October 2006
• “Securities Litigation Update,” Houston Bar Association, Houston, February 2005
• “Securities Litigation and Arbitration,” State Bar of Texas Annual Meeting, Houston, June 2003