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John Farley, a partner in Goodwin Procter's Securities Litigation & SEC Enforcement and White Collar Crime & Government Investigations Practices, represents issuers, officer and directors, investors and financial advisors in a wide range of matters, including shareholder and derivative class action lawsuits, M&A litigation, including challenges to public-company mergers as well as post-closing disputes, and complex commercial litigation. His clients represent a wide range of industries, from financial services to medical devices and healthcare.

Mr. Farley also advises clients in connection with internal investigations and investigations by the SEC, the Department of Justice and other government agencies into a wide array of conduct, including alleged securities violations, insider trading, accounting irregularities, and other matters.

In addition, Mr. Farley has experience in a range of general commercial matters, representing plaintiffs and defendants before arbitration panels and in state and federal courts throughout the U.S., in lawsuits alleging fraud, breach of contract, violation of representations and warranties, and breaches of fiduciary duty.

Current and recent representations include:

  • Successful representation of a portfolio company of a healthcare-related private equity fund in connection with a post-closing dispute. After a three-week, 20-witness arbitration before a AAA Panel, secured complete victory for client, including damages for fraud and various misrepresentations surrounding financial statements and regulatory compliance, representing more than one-third of deal value, plus an award of attorneys’ fees and expenses.
  • Part of Goodwin team that represented Mathew Martoma, former SAC Capital portfolio manager, at trial in the Southern District of New York for alleged criminal insider trading scheme.
  • Successfully argued motion to dismiss shareholder suit challenging acquisition of Maryland-organized publicly traded REIT; landmark opinion sets the pleading standard for suits challenging acquisitions of Maryland companies.
  • Successfully represented company in mobile technology space in connection with unlawful competition by the firm’s founder and former CEO; succeeded in permanently shutting down illegal competitor.
  • Successfully represented Heartland Payment Systems, Inc., a major payment card processor, in connection with securities fraud and derivative class actions filed on behalf of stockholders after the issuer disclosed a security breach resulting in the loss of several hundred thousand payment card numbers and its share price fell approximately 80% thereafter. Court dismissed securities fraud class action with prejudice in response to client’s arguments; derivative suits were voluntarily dismissed with prejudice in exchange for agreement not to seek fees and costs.
  • Represented Countrywide Financial Corporation in connection with one of the largest securities fraud class actions in U.S. history, alleging fraud in connection with the sale of more than $350 billion of mortgage-backed securities; case settled on very favorable terms.
  • Successfully represented nine former directors and officers of Lyondell-Basell Industries, a $21 billion petrochemical concern that filed for bankruptcy protection after completing a leveraged buyout. Claims against eight of nine clients were dismissed from bankruptcy adversary proceeding; motion to dismiss claims against the remaining defendant is pending.

Other Representative Matters

Securities Fraud. In addition to the mortgage-backed securities and card processor actions above, represented Countrywide Financial Corporation in connection with nationwide stock-drop class action and class action by buyers of convertible debt securities (class certification denied based in part on novel theory of market efficiency advanced by our client), as well as numerous "opt-out" matters. Successfully represented investors in fraudulently mispriced convertible bond arbitrage fund before NASD panel.

Internal and Government Investigations. Numerous internal and government investigations into allegations of, for example, insider trading, stock option backdating, manipulation of a multi-billion dollar securities lending program, and a wide array of accounting issues (including foreign exchange hedging, inventory management and revenue recognition across numerous industries, from software to heavy industrial machinery and medical devices).

M&A Litigation. In addition to the Maryland REIT matter discussed above, successful representation of other REITs in responding to M&A strike suits by shareholders challenging corporate acquisitions, including most recently the successful defense of a $7.1 billion public REIT acquisition. Beyond REITs, successful representation of buyers and sellers in an array of industries, including technology, medical devices and electrical power generation. Regularly and successfully represent investment banking firms as financial advisors to target companies in M&A litigation challenging public company acquisitions.

Post-Closing Disputes. Broad experience in post-closing disputes, representing buyers and sellers in industries ranging from healthcare to mobile technology to fast-food restaurant chains.

Prior to joining Goodwin Procter, Mr. Farley was a litigation associate at Cravath, Swaine & Moore LLP in New York City.

Mr. Farley is a member of the American Bar Association and the Association of the Bar of the City of New York.

The Pendulum Swings Back
White Collar Crime
May 1, 2006