The Recorder Profiles BLB&G’s California Office As Securities Litigation Department of the Year

April 24, 2015

The Recorder, California’s premier legal daily, has named BLB&G’s San Diego office as the recipient of one of its 2015 “Litigation Department of the Year” Awards. The awards recognize California litigation practices that delivered standout results on their clients' most critical matters.  BLB&G was one of only two firms selected to its “Securities” category.   

In The Recorder profile of BLB&G, the firm was praised for “help[ing] blaze the trail for institutional investors who suffered some of the biggest losses in the financial meltdown.”  The Recorder highlights three substantial recoveries achieved by BLB&G in 2014 “after years of battle against top defense firm and their elite litigators,” including:  $99 million from Ernst & Young in the Lehman Brothers litigation, bringing the total recoveries in the case to $615 million;  $280 million from JPMorgan Chase & Co., and $95 million from Morgan Stanley.

David Stickney, the lead prosecutor in these cases, acknowledged that in the aftermath of the crisis, “there was a sense for everybody involved that they really were dealing with something historic in terms of the size and the scale and the scope of all the litigation issues.”  According to The Recorder, “it took new legal theories, heavy investment, and a measure of daring on the part of plaintiff firms” to take big banks to task for how they packaged and sold mortgage-backed securities leading up to the crisis.  

In the JPMorgan case, for example, Mr. Stickney explained, “there was little precedent.  No court had sustained claims under federal securities laws for purchasers of mortgage-backed securities, and no court had certified a class of this kind.”  Despite this set of novel circumstances, however, JPMorgan agreed to pay $280 million to settle all claims – the third-largest subprime settlement ever achieved at the time.

The profile also highlighted another example of wading into “uncharted territory” successfully in the case against Ernst & Young, Lehman’s former auditor.  The $99 million settlement, one of the largest auditor settlements ever, was achieved despite the fact that the feds decided not to press charges against the audit firm after the bank failed. Mr. Stickney credited “brilliant negotiator” Max Berger, the senior founding partner of BLB&G, as being critical in bringing about this resolution.

According to managing partner Blair Nicholas, BLB&G’s “success in our complex litigation cases is really a testament to the significant recourses we devote to each and every prosecution…which really is unrivaled in the securities litigation bar, particularly for a contingency fee type law firm.”

The Recorder editors sifted through 176 nominations looking for decisive victories at trial or on appeal, selecting 14 firms as winners in nine specialties.  They considered the degree of difficulty, dollar value and importance of each matter to the client, the depth and breadth of the practice, and the use of innovative approaches.   

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