Bill Alderman, a partner in the San Francisco office, concentrates his practice
on business litigation and dispute resolution. He has broad experience in
matters involving federal and state securities, corporate governance,
technology, trade secrets, business torts and international disputes.
Bill is additionally recognized for the results he has obtained in
insurance coverage, employee benefits, and federal and state antitrust disputes.
He commits a substantial part of his time to pro bono representation and to
representation of the firm.
Representing clients in class and derivative actions, Bill's approach
is to minimize his clients’ overall cost through careful strategic planning,
dispositive motions and aggressive negotiation. Only three of the many
securities class actions he has defended have resulted in any settlement payment
by his client or its carrier. Of his nearly 100 motions to dismiss securities
class, mass or derivative actions since 1996, more than 90 percent were granted
in their entirety (most with prejudice), while others were granted in part or
led to a successful motion for summary judgment.
The following are some of Bill's more notable securities class,
derivative and individual actions.
- Deckers Outdoor Corp.
Securities Litigation. (C.D. Cal., D. Del., Santa Barbara Superior, Cal.
Ct. App. 2012-2014). Bill represented the company and its three top
executives in defending two class actions and two derivative actions. All four
actions were dismissed with prejudice on initial motions; on appeal in the
derivative actions, dismissal was affirmed.
- Deutsche Bank National
Trust Co. v. Novation Companies, Inc.
(N.Y. Supreme, 2012-present). Bill represents an RMBS sponsor in
the defense of an action by the trustee on behalf of FHFA seeking repurchase of
loans in the trust.
- Woori Bank v. RBS
Securities (S.D.N.Y. 2012). Bill represented a CDO issuer in
defense of an action by an institutional buyer; obtained dismissal with
- National Credit Union
Administration Board v. RBS Securities, Inc. et al. (D. Kan., 10th Cir.,
U.S. Supreme Court 2011-present). Bill represents an MBS issuer in an
action by the liquidation agent for a failed credit union/buyer.
- Cambridge Place Inv.
Mgmt., Inc. v. Morgan Stanley, et al. (D. Mass, MA state court 2010-12). Bill represented a sponsor of MBS offerings in two actions brought by an
MBS investor; obtained dismissal on initial motion.
- In re 2007 NovaStar Financial, Inc. Sec. Litig.
(W.D. Mo. 2007-08; 8th Cir. 2009). Bill represented the
company and three officers in defense of class actions alleging accounting
errors in connection with subprime lending. Obtained dismissal with prejudice on
initial motion; dismissal affirmed on appeal; related derivative actions settled
without cost to client.
- New Jersey Carpenters
Health Fund v. NovaStar Mortgage, Inc., et al. (S.D.N.Y., 2d Cir.
2009-present). Bill represents a subprime mortgage lender and four of
its officers in defense of a class action brought by buyers of interests in
securitized mortgage pools against the lender, bond underwriters, and rating
agencies. Obtained dismissal with leave to amend on initial motion and
subsequent dismissal with prejudice; dismissal reversed on appeal.
- In re McKesson HBOC Securities Litigation; U.S. v. Hawkins; SEC
v. Hawkins (N.D. Cal., S.F. Superior 1999-2005). Bill
represented the former CFO in defense of multiple civil, criminal and regulatory
actions arising out of a US$9 billion one-day loss of market capitalization
following restatement of earnings of an acquired company. He obtained an
acquittal following a criminal trial, voluntary dismissal of an SEC action, and
dismissal of various state and federal claims, with prejudice. Additional
actions were settled without cost to client.
- In re Hewlett-Packard Company Consolidated Derivative
Litigation (Santa Clara Superior 2006-08). Bill
represented the former general counsel in defense of derivative litigation
relating to use of alleged pretexting to obtain confidential telephone records;
settled without cost to client.
- In re: Gap Inc. Derivative Litigation (San
Francisco Superior 2006-07). Bill represented 34 present and former
officers and directors in obtaining voluntary dismissal of derivative actions
alleging stock option backdating.
- Gillam v. PG&E Corp. (N.D. Cal., 9th Cir.
2001-03). Bill represented the parent of a major utility and its
principal officers in obtaining dismissal, with prejudice, of a class action
claiming multibillion-dollar overstatements of revenues and earnings in
connection with California energy crisis. Dismissal of the case was affirmed on
- In re NovaStar Financial Sec. Litig. (W.D. Mo.,
Missouri and Maryland State Courts 2004-08). Bill represented the
company and various officers and directors in the defense of class and
derivative actions brought by open market purchasers. All matters settled
without cost to clients.
- In re Levi Strauss Sec. Litig. (N.D. Cal. 2004-08). Bill represented the CEO, CFO and controller in defense of a class
action on behalf of purchasers of more than US$1 billion in corporate bonds;
case settled without cost to clients.
- Landau v. Bechtle (S.F. Superior 2004-2006). Bill represented the directors of Charles Schwab Corporation in obtaining
the voluntary dismissal of derivative actions relating to alleged market timing
and late trading in mutual funds managed by a company subsidiary.
- In re Callidus Software Sec. Litig. (N.D. Cal.
2004-2006). Bill represented the company, officers and directors in
obtaining dismissal of class action alleging misleading projections.
- Operating Engineers v. IMPAC Medical Systems (N.D.
Cal. 2004-05). Bill represented the company and principal officers in
obtaining voluntary dismissal of class action.
- Khader v. Affymetrix Corp. (N.D. Cal. 2003-04). Bill represented issuer, directors and officers in obtaining dismissal of
class action claiming misleading projections.
- In re Onyx Software Corp. Securities Litigation.
(W.D. Wash. 2001-03). Bill represented the company,
directors and officers in the defense of class and derivative actions claiming
improper revenue recognition in connection with restatement. Obtained dismissal
of 10b-5 claim balance settled without payment by clients.
- In re Metricom Sec. Litig. (N.D. Cal., 9th Cir.
2001-2006). Bill represented underwriters in obtaining dismissal, with
prejudice, of class and individual actions for IPO and open-market purchasers;
dismissal affirmed on appeal.
- In re Clarent Corp. Sec. Litig.; Ahlstrom v. Clarent
(N.D. Cal., D. Minn. 2002-05). Bill represented former CFO in defense of
class and mass actions claiming improper revenue recognition in connection with
restated financial statements. Obtained dismissal of 10b-5 claim; balance
settled without payment by client.
- Herman v. Salomon Smith Barney (S.D. Cal. 2002-03). Bill represented broker-dealer in obtaining dismissal, with prejudice,
of a class action challenging alleged practices in sale of municipal bonds.
- Olson v. Salomon Smith Barney (N.D. Cal. 2002). Bill obtained voluntary dismissal of class action challenging alleged
practices in sale of municipal bonds.
- Behrens v. Cygnus Inc. (N.D. Cal. 2002). Bill obtained voluntary dismissal on behalf of company, officers, and
directors of class action claiming non-disclosure of material information.
- Autodesk Securities Litigation (N.D. Cal. 2000). Bill represented the underwriter/analyst in obtaining dismissal of a class
action involving open market trading.
- Lippitt v. Raymond James Financial (S.F. Superior,
N.D. Cal., 9th Cir. 2001-04). Bill represented broker-dealer in class
action claiming that marketing of callable CDs is an unfair business practice.
Following the denial of a motion to remand, Bill obtained voluntary
dismissal. The case settled after prior denial of remand was reversed on appeal.
- FPA Securities Litigation (S.D. Cal., 9th Cir.
1999-2005). In Madden v. Deloitte & Touche and Amin v. S.G.
Cowen, Bill represented the financial advisor in obtaining a
dismissal, with prejudice, of mass actions arising out of acquisition of managed
care medical corporations. Dismissal of the case was affirmed on appeal.
- Bergen Capital Trust I Securities Litigation (C.D.
Cal. 1999-2002). Bill represented the managing underwriters in defense
of a class action involving a $300 million debt offering and open market
trading, which was settled without payment by clients.
- Myers v. Merrill Lynch (N.D. Cal., 9th Cir.
1998-2001). Bill represented the investment banking firm in defense of
class action claiming that “penalty bids” imposed by underwriters to discourage
flipping by IPO purchasers violate California unfair competition law and other
laws. He obtained dismissal, with prejudice, on his initial motion
which was affirmed on appeal.
- In re Fritz Companies Securities Litigation (N.D.
Cal., 9th Cir., S.F. Superior, California Court of Appeal and Supreme Court
1996-2003). Bill represented the company and its directors in defense of
class actions involving open market trading. Federal and state actions were
dismissed with prejudice on initial motion. He also obtained a judgment from the
California Supreme Court reinstating the dismissal of another state case on
behalf of holders.
- In re Triteal Corp. Securities Litigation (S.D. Cal.
1997-99). Bill represented the lead underwriters in the defense of class
actions involving secondary offering and open market trading. The case settled
without payment by clients.
- Chan v. Orthologic Corp. (D. Ariz. 1997-98). Bill represented the lead underwriters in defense of a class action
involving open market trading and obtained dismissal with prejudice on the
- Steckman v. Hart Brewing, 143 F.3d 1293 (S.D. Cal.,
9th Cir., San Diego Superior 1996-98). Bill represented the lead
underwriters in defense of a class action arising out of a US$50 million IPO and
open market trading. He obtained dismissal, with prejudice, of the federal
action on the initial motion and voluntary dismissal of state court actions. The
dismissal was affirmed on appeal.
- In re KENETECH Securities Litigation (N.D. Cal.
1995-99). Bill represented lead underwriters in defense of class actions
arising out of a US$100 million IPO of common stock, US$100 million offering of
preferred depositary shares and open market trading. He obtained dismissal of
Section 11 claims by open market purchasers and summary judgment on remaining
- In re Software Toolworks, Inc. Securities
Litigation, 50 F.3d 615 (9th Cir. 1994), cert. denied, 516
U.S. 907 (1995). Bill represented the Securities Industry Association as
amicus curiae in support of the affirmance of summary judgment for
underwriters on due diligence defense.
- In re Worlds of Wonder Securities Litigation, 814 F.
Supp. 850 (N.D. Cal. 1993), aff’d in part, rev’d in part, 35 F.2d
1407 (9th Cir. 1994), cert. denied, 516 U.S. 868 (1995). Bill
represented the lead underwriters in defense of class actions alleging federal
securities claims and common law claims arising out of a US$120 million IPO. He
represented the sole underwriter in defense of a similar class action arising
out of an US$80 million public offering of convertible debentures. In both
cases, he defended against open market trading claims. Summary judgment for the
underwriters was affirmed on appeal.
The following cases illustrate some of Bill's other areas of
expertise in securities matters.
- Unfair Competition Litigation. Bill has won more
than 20 recent class and private attorney general actions under Section 17200 of
the California Business & Professions Code on behalf of such clients as
Citigroup, Salomon Smith Barney, Morgan Stanley and Verizon.
- Private Finance Litigation. In Z
Auction v. Salomon Smith Barney (Los Angeles County Superior Court
1999-2001), Bill represented the investment banker in defense of a US$1
billion claim for damages arising out of a private financing engagement and
obtained dismissal of entire case with prejudice on demurrer.
- Merger and Acquisition Litigation. In Medtronic v.
Dieck (Arbitration 1998-99), Bill represented 10 former shareholders
of an acquired company in defending a demand by the acquirer for rescission of
US$72 million merger. He obtained summary judgment and an award of attorney’s
fees from an arbitration panel.
- Customer Litigation. In Estate of Joslyn v. Estate of
Cash (NASD arbitration 1999 - 2001). Bill represented a
broker-dealer in defense and favorable settlement of a claim that the customer
suffered US$16 million in damages from unsuitable investments.
- Fiduciary Litigation. In Rutledge v. Smith Barney
(D. Haw. 1998-99), Bill represented the financial advisor in obtaining a
dismissal with prejudice of ERISA and common law claims based on services to
union trust funds.
- Intra-company Disputes. Bill has represented
numerous companies and/or shareholders in resolving disputes between majority
and minority shareholders.
- Partnership Disputes. Bill has represented numerous
partnerships and their constituencies in disputes over partnership or general
- Tender Offer Litigation. Bill has represented both
offerors and offerees in federal and state litigation relating to corporate or
partnership tender offers.
- Regulatory Investigations. Bill has represented
clients in numerous public and non-public investigations and informal inquiries
by the SEC, NASD, NYSE, AMEX, PCX and FINRA: In 2004 and 2005, he represented
clients in producing documents and/or testimony to the SEC in nine separate
matters, without any having resulted in enforcement action.
- Advisory Litigation. In Nicolino v. Automated Security
(Holdings) plc (Contra Costa Superior Court; Court of Appeal 1997-98), Bill represented the financial advisor in obtaining the dismissal of a claim
for alleged breach of acquisition agreement. Dismissal of the case was affirmed
- Internal Investigations. Bill has conducted
internal investigations and represented special committees or audit committees
for clients such as Salomon Smith Barney, Gap Inc., Restoration Hardware, Walt
Disney Co., Onyx Software, Calypte Biomedical, Harper Group and Wells Fargo
Last Friday, the SEC issued two releases regarding guidance on revenue recognition, along with a related Staff Accounting Bulletin. These releases are notable for all SEC registrants, as they update prior revenue recognition guidance.
First, the SEC updated its guidance for criteria to be met in order to recognize revenue when delivery has not occurred, i.e., bill-and-hold arrangements. The SEC’s guidance now follows that of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenues from Contracts with Customers. Per ASC Topic 606, revenue may be recognized when or as the entity satisfies a performance obligation by transferring a promised good or service to a customer, and a good or service is transferred when the customer obtains control of that good or service. In the context of bill-and-hold arrangements, ASC Topic 606 provides specific guidance that certain indicators must be met to show that control has been transferred, including: (i) a substantive reason for such an arrangement where the customer has declined to exercise its right to take physical possession of that product; (ii) the product must be identified separately as belonging to the customer; (iii) the product currently must be ready for physical transfer to the customer; and (iv) the entity cannot have the ability to use the product or direct it to another customer. Until a registrant adopts ASC Topic 606, however, it should continue to follow the older guidance for revenue recognition. In conjunction with the SEC’s release, the SEC’s Office of the Chief Accountant and Division of Corporate Finance also released a bulletin that brings existing SEC staff guidance into conformity with ASC Topic 606.
The SEC also published new guidance with respect to accounting for sales of vaccines and bioterror countermeasures to the Federal Government for placement into the pediatric vaccine stockpile or the strategic national stockpile. In light of the updated ASC Topic 606 referenced above, the SEC states that vaccine manufacturers should now recognize revenue and provide disclosures when vaccines are placed into Federal Government stockpile programs because control of the enumerated vaccines (i.e., childhood disease, influenza and others) will have been transferred to the customer.
Last Thursday, Jay Clayton was officially sworn in as the new Chairman of the Securities and Exchange Commission. As the new Chairman takes office, here are a few things we’re keeping an eye on:
Will Chairman Clayton take a position on the recently introduced bipartisan bill that would increase civil monetary penalties in SEC enforcement actions? The “Stronger Enforcement of Civil Penalties Act of 2017” would significantly increase civil monetary penalties in enforcement actions to as much as $1 million per violation for individuals and $10 million per violation for entities, or three times the money gained in the violation or lost by the victims. The current maximum civil monetary penalties are $181,071 and $905,353 per violation for individuals and entities, respectively.
Will the new Chairman preserve the directive reportedly issued by former Acting Chairman Michael Piwowar to re-centralize authority to issue formal orders of investigation? In 2009, the SEC adopted a rule that delegated authority to issue formal orders initiating investigations to the Director of Enforcement, who then “sub-delegated” it to regional and associate directors and unit chiefs within the Enforcement Division. In February, Piwowar reportedly revoked the “sub-delegated” authority, ordering it re-centralized exclusively with the Director of Enforcement.
Will enforcement actions against public companies increase or decrease after hitting their highest level since 2009 last year? A recent report issued by the NYU Pollack Center for Law & Business and Cornerstone Research found that the 92 actions the SEC brought against public companies and their subsidiaries in 2016 is more than double the level of enforcement activity from just three years prior. READ MORE
A divided panel of the Seventh Circuit recently held that the Securities Litigation Uniform Standards Act (“SLUSA”) requires any covered class action that “could have been pursued under federal securities law” to be brought in federal court. The plaintiff maintained an investment account at LaSalle Bank, which was later acquired by Bank of America. Each night, LaSalle invested (“swept”) the account’s balance into a mutual fund approved by the plaintiff. Without the plaintiff’s knowledge, LaSalle also allegedly pocketed the fees that some of the mutual funds paid each time a balance was transferred. When the plaintiff found out, he brought a class action in state court, arguing that LaSalle had breached its contractual and fiduciary duties to its customers by secretly paying itself fees generated by their accounts.
LaSalle and Bank of America successfully argued before the district court that SLUSA required removal of the case to federal court. SLUSA authorizes defendants to demand removal of any class action with at least fifty members that alleges “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” Congress drafted SLUSA to force securities class actions out of state courts and into federal courts, where plaintiffs must clear higher pleading hurdles.
On September 12, 2016, the SEC announced that it had reached a settlement with Jun Ping Zhang (“Ping”), a former executive of a Chinese subsidiary of Harris Corporation (“Harris”), regarding alleged violations of the Foreign Corrupt Practices Act (“FCPA”). The settlement was unusual, in that the SEC declined to also bring charges against Harris, an international communications and information technology company.
On June 6, 2016, the Supreme Court of Delaware affirmed a decision of the Chancery Court finding that corporate directors and officers involved in a sales transaction breached a contract with option holders to fairly value their options (see here for a thorough explanation of the Chancery Court decision, and in particular, the Court’s criticism of the retained financial advisers that provided a valuation analysis). The Supreme Court decision also included a disproportionately lengthy dissent condemning both the Chancery Court’s findings and its reliance on “social science studies” to reach them.
After the repeated challenges to the SEC’s in-house courts as previously reported, Mark Cuban joined the debate by filing an amicus curiae brief in support of petitioners Raymond J. Lucia Companies, Inc. and Raymond J. Lucia (collectively “Lucia”) in Lucia v. SEC. Cuban, describing himself as a “first-hand witness to and victim of SEC overreach” in a 2013 insider trading case brought against him in an SEC court, argued that the D.C. Circuit should grant the petitioners’ appeal because SEC in-house judges are unconstitutionally appointed.
The SEC has rolled out its second wave of enforcement actions against 22 municipal underwriting firms for alleged securities violations in municipal bond offerings in connection with its Municipalities Continuing Disclosure Cooperation (MCDC) Initiative. As previously reported, the MCDC initiative was announced in March 2014 to address potential securities violations by municipal bond underwriters and issuers. Under this initiative, the SEC offered favorable settlement terms to those who self-reported by the end of 2014.
The defense bar recently won a significant victory in the battle to challenge the SEC’s expanded use of administrative proceedings, following the 2010 enactment of the Dodd-Frank Act, to seek penalties against unregulated individuals and entities. As we previously wrote in SEC’s Administrative Proceedings: Where One Stands Appears to Depend on Where One Sits and There’s No Place Like Home: The Constitutionality of the SEC’s In-House Courts, SEC administrative proceedings have recently faced growing scrutiny, including skepticism about whether the administrative law judges (ALJs) presiding over these cases are inherently biased in favor of the SEC’s Division of Enforcement. The Wall Street Journal recently reported that ALJs rule in favor of the SEC 90% of the time in administrative proceedings. Administrative proceedings have also been criticized for the ways in which they differ from federal court actions, including that respondents are generally barred from taking depositions, counterclaims are not permissible, there is no equivalent of Rule 12(b) motions to test the allegations’ sufficiency, and there is no right to a jury trial.
We first heard about the SEC’s increased focus on high-frequency trading in June 2014 when the SEC announced its desire to promulgate new rules on high frequency trading to address the lack of transparency in dark pools and alternative exchanges and to curtail the use of aggressive, destabilizing trading strategies in vulnerable market conditions. However, the SEC and other regulators may not need to rely on new rules to regulate high frequency trading. The United States Commodity Futures Trading Commission special counsel Greg Scopino recently published an article in the Connecticut Law Review arguing that certain high frequency trading tactics violate federal laws against spoofing and wash trading.
On November 3, 2014, the U.S. Supreme Court held oral argument in Omnicare v. Laborers District Council Construction Industry Pension Fund. As discussed in earlier posts, from March 18, 2014 and July 22, 2014, the Supreme Court in Omnicare has been asked to resolve a circuit split regarding the scope of liability under Section 11 of the Securities Act: does an issuer violate Section 11 if it makes a statement of opinion that is objectively false, or must the issuer also have known that the statement was false when made?