Areas of Practice

In April 2007, Mr. Pastuszenski tried a case in the Delaware Chancery Court on behalf of an S&P 500-listed company in which one of its shareholders seeks access to several years of corporate documents relating to executive compensation. He is currently representing this same corporation and several of its current and former directors and officers in over 30 securities class action, ERISA class action and shareholder derivative lawsuits pending in state and federal courts across the country relating to the economic downturn in the mortgage lending and securitization industries.

Over the years Mr. Pastuszenski has led numerous internal corporate investigations for audit committees and other special board committees into financial accounting and corporate governance-related matters. Recently, he led several such internal investigations relating to financial accounting for stock option grants, including an investigation for the audit committee of the board of a Fortune 500 company.

Mr. Pastuszenski has also represented numerous clients in regulatory proceedings brought by the SEC and other regulators relating to possible accounting irregularities, the accuracy and completeness of corporate disclosures to investors (including financial guidance), and trading by corporate officers and directors, among other matters. He is currently involved in a several-year-long SEC investigation of a major mutual fund organization arising out of certain trading desk practices,...more »

In April 2007, Mr. Pastuszenski tried a case in the Delaware Chancery Court on behalf of an S&P 500-listed company in which one of its shareholders seeks access to several years of corporate documents relating to executive compensation. He is currently representing this same corporation and several of its current and former directors and officers in over 30 securities class action, ERISA class action and shareholder derivative lawsuits pending in state and federal courts across the country relating to the economic downturn in the mortgage lending and securitization industries.

Over the years Mr. Pastuszenski has led numerous internal corporate investigations for audit committees and other special board committees into financial accounting and corporate governance-related matters. Recently, he led several such internal investigations relating to financial accounting for stock option grants, including an investigation for the audit committee of the board of a Fortune 500 company.

Mr. Pastuszenski has also represented numerous clients in regulatory proceedings brought by the SEC and other regulators relating to possible accounting irregularities, the accuracy and completeness of corporate disclosures to investors (including financial guidance), and trading by corporate officers and directors, among other matters. He is currently involved in a several-year-long SEC investigation of a major mutual fund organization arising out of certain trading desk practices, and has recently handled regulatory investigations brought by the SEC and a state attorney general’s office on behalf of a Fortune 100 diversified financial services company.

In addition to defending securities and shareholder litigation matters across the country, Mr. Pastuszenski spends a significant amount of his time advising senior management and boards of directors on how to minimize securities and shareholder liability risks, and how best to manage crises when they occur. His clients have included financial services and insurance companies, mutual funds, hedge funds, venture capital firms, manufacturers of computer hardware and software, semiconductor manufacturers, pharmaceutical, biotechnology and life sciences companies, one of the world’s largest water filtration and purification companies, healthcare companies, telecommunications services providers, one of the leading Internet portals, information and printing technology providers, and other high technology companies.

Mr. Pastuszenski’s representative clients have included Countrywide Financial Corporation, the Acorn Mutual Funds, Lycos, Inc., Ionics, Incorporated, Alkermes, Inc., AsiaInfo Holdings, ON Semiconductor Corporation, Sipex Corp., Teradyne, Inc., Digital Equipment Corporation, Lionbridge Technologies, Copley Pharmaceutical, Inc., Cognos Incorporated, Newcourt Credit Group, Inc., SystemSoft Corporation, CareMatrix Corporation, Network Computing Devices, Inc., Discreet Logic, Inc., Presstek, Inc., Citrix Systems, Inc., ACT Manufacturing, Inc., former members of the Audit Committee of Peregrine Systems, Inc., and former senior executives of AOL-Time Warner, Rhythms Netconnections,and Able Laboratories, among numerous other publicly-traded companies.

Mr. Pastuszenski represents his clients tenaciously, and prides himself on the results he has achieved for them. Representative recent matters include the following:

• Alkermes, Inc. Shareholder Derivative Litigation (2007): Obtained dismissal with prejudice of shareholder derivative litigation relating to accounting for employee stock option grants against this leading life sciences company, which provides the drug industry with various technology platforms for the controlled, sustained-release delivery of drug products. No settlement monies were paid.
• Arbinet-thexchange, Inc. Securities Litigation (2007): Obtained dismissal with prejudice of this securities class action litigation filed in federal district court in New Jersey relating to the initial public offering of the world’s leading electronic market for the trading of telephone call and data communications capacity. Mr. Pastuszenski successfully argued to the court, among other things, that the plaintiffs’ allegations were inconsistent with and contradicted by the company’s public disclosures. The court agreed, and threw the case out. Plaintiffs chose not to appeal and dropped the case. No settlement monies were paid.
• James Foundation Litigation (2006): Defeated plaintiff foundation’s motion for a preliminary injunction to restrain the use by our client of stock dividend payments pending trial of this dispute over the parties’ rights to shares of stock in a large, publicly-traded company and associated cash dividends paid by the company on those shares.
• Alkermes, Inc. Securities Litigation (2005): Obtained dismissal with prejudice of securities class action litigation filed in federal court in Boston against this leading life sciences company. The litigation related to the timing of FDA approval of Risperdal Consta, an injectable, sustained-release version of the best-selling oral antischizophrenia drug Risperdal (risperidone). We argued to the court that the case should be thrown out as lacking any legal or factual merit whatsoever. After a federal judge concluded that the entire lawsuit should be dismissed, the plaintiffs chose voluntarily to drop their case. No settlement monies were paid.
• Peregrine Systems Securities Litigation (2005, 2004, 2003): Obtained dismissal of all securities fraud class action claims filed in federal court in San Diego, California against our clients, three former outside directors and members of the audit committee of Peregrine Systems, Inc., a San Diego-based leading maker of enterprise software. After presenting oral argument before the California Court of Appeal in February 2005, also obtained dismissal of related litigation filed in California Superior Court against our outside director clients alleging breach of fiduciary duty. Mr. Pastuszenski also defended these former members of the Peregrine Audit Committee in several other related shareholder lawsuits in California state court, as well as in a lawsuit alleging various breaches of fiduciary duty in San Diego Superior Court brought by the litigation trustee appointed in Peregrine Systems’ Chapter 11 bankruptcy filing. All of these litigations concerned Peregrine’s restatement of over a half-billion dollars of revenues recorded over a three-year period, its understatement of roughly $2 billion of losses, and its later bankruptcy filing.
• AOL-Time Warner Securities Litigation (2005, 2004): Obtained dismissal of securities fraud and related class action claims filed in state courts in California and Ohio against our client, the former Chief Technology Officer of AOL.
• Presstek, Inc. Securities Litigation (2004): Obtained dismissal with prejudice of securities class action litigation filed in federal court in New Hampshire against this world leader in digital printing technology. Mr. Pastuszenski argued to the court that plaintiffs’ allegations failed to satisfy the strict rules applicable to securities claims, and the court agreed. The claims against our clients were thrown out in their entirety. The plaintiffs initially appealed this ruling to the Court of Appeals, but ultimately dropped the appeal voluntarily. No settlement monies were paid.
• RICO Class Action Litigation Against Leading Mutual Fund Organization (2003): Obtained dismissal of class action litigation filed in federal court in Nashville, TN against our clients, one of the world’s largest mutual fund organizations and two of its senior officials. The lawsuit alleged violations of the federal Racketeer Influenced and Corrupt Organizations statute, as well as Tennessee state law, arising out of the alleged marketing activities of a public company in which the mutual fund organization had invested. The claims against our clients were thrown out in their entirety, and with prejudice. No settlement monies were paid.
• Lycos, Inc. Securities Litigation (2003): Very favorably settled this securities class action litigation (which arose out of Lycos’ announcement of a proposed multibillion-dollar merger with USA Networks) for a tiny fraction of the potential damages had plaintiffs prevailed on their claims. The settlement was funded entirely by insurance.
• SEC Investigation of Financial Accounting Restatement By Multinational Corporation (2003): Quickly resolved SEC investigation into this multinational corporation’s restatement of prior fiscal quarters. After meeting with SEC enforcement staff immediately after announcement of the restatement and demonstrating in our written submissions why the restatement reflected no effort to mislead the investing public, the SEC informed us that it had decided to close the investigation and not pursue any enforcement action. (Client’s name withheld due to non-public nature of SEC investigation.)
• Sipex Corp. Securities Litigation (2002): Obtained dismissal of securities class action litigation against this leading maker of semiconductor devices that alleged improper revenue recognition on sales to distributors. From the outset, we told plaintiffs’ counsel that the litigation was meritless, and pressed them to drop it. Also asked the court to throw the case out due to non-compliance with the “lead plaintiff” provisions of the 1995 securities reform legislation, arguing that it was an opportunistic, lawyer-driven attempt to capitalize on a general downturn in the semiconductor industry. In the face of this pressure, the litigation was dropped. No settlement monies were paid.
• Ecometry Corp. Shareholder Derivative Litigation (2002): Quickly resolved shareholder derivative litigation in Florida state court seeking to stop management-led buyout of this publicly traded Florida company, enabling the transaction to proceed and close. Lawsuit was resolved in just a few months in exchange for modest ($100,000) award of attorneys’ fees to plaintiffs’ counsel. No other settlement monies were paid.
• ACT Manufacturing, Inc. Securities Litigation (2000): U.S. Court of Appeals affirmed dismissal of securities fraud class action litigation against one of the ten largest electronics contract manufacturers in the world which alleged improper recognition of revenue and other accounting irregularities stemming from a $16 million inventory shortfall. No settlement monies were paid.
• Individual, Inc. Securities Litigation (1999): U.S. Court of Appeals affirmed dismissal of securities fraud class action litigation against this on-line news service provider which challenged its failure to disclose alleged rift between the CEO and the Board of Directors in its initial public offering prospectus.
• Telebit Corp. Merger Litigation (1999): Appeals Court affirmed dismissal of shareholder class action litigation challenging $350 million merger of network products manufacturer Telebit Corp. into Cisco Systems. No settlement monies were paid.
• Cognos Incorporated Securities Litigation (1998): Convinced plaintiffs’ attorneys to drop their securities class action against our client, Ottawa, Canada-based Cognos, the world’s leading supplier of business intelligence software tools. No settlement monies were paid.
• ParcPlace Software Securities Litigation (1997): Convinced plaintiffs’ attorneys to drop their class action claims against our venture capital fund clients after telling them that we intended to ask the court to fine them monetarily for bringing frivolous claims against our clients. No settlement monies were paid.
• Copley Pharmaceutical Securities Litigation (1995): After we had convinced the court to throw out 28 of 29 alleged misrepresentations in this securities class action (which claimed concealment of alleged problems in the manufacture of this leading generic drug company’s two best-selling products), settled all claims for a small fraction of the potential damages had plaintiffs prevailed on their claims.

Mr. Pastuszenski’s securities and shareholder litigation matters have involved allegations of insider trading, market manipulation, improper revenue recognition and other alleged accounting irregularities, self-dealing and breach of fiduciary duty, and inaccurate earnings and revenue projections, among other issues. His securities and shareholder litigation practice is national in scope. He has represented both United States and foreign-based issuers and their directors and officers in securities and corporate governance matters across the country, including matters in California, Colorado, Delaware, Illinois, Massachusetts, New Hampshire, New York, Pennsylvania, Virginia, West Virginia, and Washington, D.C., among others. Mr. Pastuszenski has significant experience in mediating, arbitrating, and trying securities and financial fraud-related matters, including serving as an arbitrator in a $25 million accounting malpractice litigation between a big 5 accounting firm and the U.S. Department of Justice.

Mr. Pastuszenski is currently representing numerous public companies that have been sued in the IPO “allocation” class action litigation cases in federal court in New York City, which attack the way IPO underwriters allegedly allocated shares in “hot” IPOs to their customers. These cases constitute one of the largest securities class action litigations ever filed in the United States. He has also been appointed to serve on a committee of six law firms who represent issuer defendants in those cases. This committee acts as a liaison between the issuer defendants, on the one hand, and the court, the plaintiffs, and the underwriters on the other hand. Mr. Pastuszenski was one of the principal authors of the consolidated motion to dismiss briefs that resulted in dismissal of the securities fraud claims against a significant number of the several hundred public companies that have been sued in these cases. less »