Shareholder Derivative

Shareholder derivative actions are brought by investors seeking to vindicate the rights of the corporation for the benefit of all shareholders. These actions typically address board member or executive misconduct that results in violations of the nation’s securities, environmental, labor, health & safety and wage & hour laws. Robbins Geller’s shareholder derivative practice is focused on eliminating such misconduct by restoring accountability, improving transparency and preserving corporate assets. The Firm has achieved significant corporate governance changes in various cases, helping to strengthen shareholder protections and improve long-term investor value.

Click the video below to see author and speaker Robert Monks discuss the importance of shareholder derivatives to investors.

The Firm’s shareholder derivative cases include:

  • City of Westland Police and Fire Retirement System v. Stumpf (Wells Fargo Derivative Litigation), No. 3:11-cv-02369 (N.D. Cal.). As co-lead counsel, Robbins Geller prosecuted this shareholder derivative action on behalf of Wells Fargo & Co., alleging that Wells Fargo’s executives allowed participation in the mass-processing of home foreclosure documents by engaging in widespread robo-signing, i.e., the execution and submission of false legal documents in courts across the country without verification of their truth or accuracy, and failed to disclose Wells Fargo’s lack of cooperation in a federal investigation into the bank’s mortgage and foreclosure practices.  In settlement of the action, Wells Fargo agreed to provide $67 million in homeowner down-payment assistance, credit counseling and improvements to its mortgage servicing system.  The initiatives will be concentrated in cities severely impacted by the bank’s foreclosure practices and the ensuing mortgage foreclosure crisis.
  • In re Finisar Corp. Derivative Litig., No. C-06 07660 (N.D. Cal.). After successfully appealing the dismissal of the shareholder derivative complaint, Robbins Geller returned to the United States District Court and recovered $15.5 million in cash for Finisar, as well as extensive corporate governance reforms.
  •  In re KLA-Tencor Corp. S’holder Derivative Litig., No. C-06-03445 (N.D. Cal.). After successfully opposing the special litigation committee of the board of directors’ motion to terminate the derivative claims, Robbins Geller recovered $43.6 million in direct financial benefits for KLA-Tencor, including $33.2 million in cash payments by certain former executives and their directors’ and officers’ insurance carriers.
  • Unite Nat’l Ret. Fund v. Watts (Royal Dutch Shell Derivative Litigation), No. 04-CV-3603 (D.N.J.).  Robbins Geller successfully prosecuted and settled  on behalf of the London-based Royal Dutch Shell plc, achieving very unique and valuable transatlantic corporate governance reforms.
  • Alaska Electrical Pension Fund v. Brown (EDS Derivative Litigation), No. 6:04-CV-0464 (E.D. Tex.).  The Firm prosecuted this shareholder derivative action on behalf of Electronic Data Systems Corporation. The case alleged that EDS’s senior executives breached their fiduciary duties by improperly using percentage-of-completion accounting to inflate EDS’s financial results, by improperly recognizing hundreds of millions of dollars in revenue and concealing millions of dollars in losses on its contract with the U.S. Navy Marine Corps, by failing in their oversight responsibilities, and by making and/or permitting material, false and misleading statements to be made concerning EDS’s business prospects, financial condition and expected financial results in connection with EDS’s contracts with the U.S. Navy Marine Corps and WorldCom.