Lubin Olson’s litigators have been at the forefront of helping defend the rights of companies targeted by short seller campaigns. Whether through discreet, behind-the-scenes guidance or full-blown litigation, our litigators are some of the most experienced in the country in regard to the complex and difficult situation caused by a short attack on a company.

Our litigators have spent thousands of hours advising companies on short selling issues.

As a result of this extensive work, our attorneys have developed a deep familiarity with securities clearing, lending, trading, and market manipulation. We have access to a network of specialists in these areas that allows us to further advise our clients on these matters. 

Our cases include landmark decisions in the short-selling arena.

In Overstock.com, Inc. et al. v. Goldman Sachs & Co. et al., 231 Cal.App.4th 513 (2014), we represented Overstock.com, Inc. in a unique lawsuit to stop the naked short selling of Overstock.com’s publicly-traded stock that was resulting from the securities lending and clearing practices of Goldman and Merrill. Due to this lawsuit, the naked short selling stopped. The Overstock case was the first case, to our knowledge, that held a clearing firm could be liable for naked short selling by its clients and also represents an extremely rare example of a clearing firm being held liable for market manipulation by its clients in any context.  

In Overstock.com, Inc. v. Gradient Analytics, Inc., 151 Cal.App.4th 688 (2007), we represented Overstock.com, Inc. in pursuing defamation and other tort claims against a premiere short-selling hedge fund and a stock research firm based on the allegations that reports were being custom generated to support a short campaign against the company and included false assertions of accounting wrongdoing and other misconduct at Overstock.com. We defeated the anti-SLAPP motion filed by the defendants which led, on appeal, to a frequently-cited and groundbreaking opinion on defamation in the context of short selling. The results of this case were critical to stopping unfounded criticism of the company by hedge funds with short positions in the company.

We bring our extensive experience in the securities markets to bear upon other work in the securities arena, including working with venture capital fund managers in a variety of disputes.

For additional information about Lubin Olson’s Securities Litigation service, please contact Ellen A. Cirangle.