Auction-Rate Securities Under Attack

Strategies for Pursuing and Defending Claims Against Broker–Dealers

***Dozens of Lawsuits and Arbitrations Filed Since March; SEC, FINRA and State AGs Launch Investigations***

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Wednesday, July 9, 2008

Course Materials


Investors in auction-rate securities are increasingly filing lawsuits and pursuing arbitration against broker–dealer companies that sold them the products, alleging the companies deceived them into believing that auction-rate securities were liquid investments that could be quickly sold.

Additionally, the government is aggressively investigating the auction-rate securities business of many broker–dealer companies. Auction-rate securities were a $330 billion market that collapsed in February amid the credit market crisis.

The lawsuits raise issues of fraud, failure to disclose and conflict of interest. Obtaining class certification and proving damages will be difficult for investors. It is critical that counsel for investors and broker–dealers prepare a solid litigation strategy for prevailing in the lawsuits.

Listen as our panel of attorneys — representing both investors and broker–dealers — reviews the status of government enforcement efforts and the pending lawsuits and offers counsel best practices for prevailing in claims.



  1. Current government enforcement efforts
  2. Status of pending lawsuits and arbitration proceedings
    1. Allegations/theories
    2. Damages sought
  3. Class certification and litigation challenges — plaintiff and defense perspective
    1. Mandatory arbitration clauses
    2. Meeting predominance and superiority requirement
    3. Proving liability
    4. Will the market correct the problem?
  4. Strategies for prevailing in claims — plaintiff and defense perspective


The panel reviewed these and other key questions: 

  • What is the basis for legal claims regarding auction-rate securities?
  • What challenges will investors' counsel face in obtaining class certification for auction-rate securities cases?
  • What strategies can investors' and broker–dealers' counsel employ to prevail in auction-rate securities claims?
  • How are government agencies addressing the allegations against broker–dealer companies?


Robert Stern
Robert Stern
O'Melveny & Myers

He is a litigator with extensive experience litigating major state and federal actions. He has particular experience in...  |  Read More

Daniel C. Girard
Daniel C. Girard
Managing Partner
Girard Gibbs

He has successfully prosecuted over 75 class action matters. He coordinates the securities, antitrust and consumer...  |  Read More

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