In re Fannie Mae Securities Litigation

District of Columbia, dcd-1:2004-cv-01639

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2 WAITE, SCHNEIDER, BAYLESS & CHESLEY CO., L.P.A. Attorneys & Counselors at Law 1513 Fourth & Vine Tower One West Fourth Street Cincinnati, Ohio 45202 Telephone (513) 621-0267 Facsimile (513) 381-2375 FIRM PROFILE Waite, Schneider, Bayless & Chesley was founded in 1860 in Cincinnati, Ohio. Today it remains the city's oldest law firm in continuous operation. The firm has 16 attorneys and prosecutes class and private actions, nationwide, on behalf of both individual and corporate clients. The firm's litigation practice areas include, but are not limited to, securities class actions, derivative/corporate governance actions, antitrust litigation, FELA litigation, insurance litigation, products liability litigation and trade secret and employment litigation in federal and state courts. Firm's Practice Areas Securities Fraud Litigation The firm has prosecuted, defended and settled high profile securities fraud class actions in federal and state courts. Since the passage of the Private Securities Litigation Reform Act of 1995, which sought to encourage institutional investors to become more active in securities class action litigation, the firm has represented prominent institutional investors in securities fraud litigation. The firm successfully represented shareholders against DPL, Inc., a public company traded on the New York Stock Exchange, and obtained a $145.5 global settlement of federal and state cases for its clients. The firm currently is Lead Counsel in two federal securities fraud class action cases pending against government-sponsored entities Freddie Mac and Fannie Mae. The attorneys in the securities fraud litigation department have extensive experience in federal securities laws and regulations and the rules and regulations of the various stock exchanges. Securities Class Actions and Derivative Case Representation includes: Freddie Mac Securities Litigation, Lead Case No. 03-cv-4261, U.S. District Court, S.D.N.Y., Lead Counsel for lead plaintiffs and class in securities fraud class action litigation (pending). 2 In Re Fannie Mae Securities Litigation, U.S. District Court, District of Columbia, Consolidated Civil Action No. 04-cv-01639, Lead Counsel for lead plaintiffs and class in securities fraud class action litigation (pending). In Re DPL Inc. Securities Litigation, U.S. District Court, Southern District of Ohio, Co- Lead Counsel for lead plaintiffs and class in prosecution of federal securities fraud claims; $145.5 global settlement of federal and state cases for clients. In Re OM Group, Inc. Securities Litigation, U.S. District Court, Northern District of Ohio, Eastern Division, Case No. 1:02-CV-2163, counsel for lead plaintiffs and class in securities fraud class action litigation (settled for $92.4 million). David Slone, et al. v. Fifth Third Bancorp, et al., U.S. District Court, Southern District of Ohio, Western Division, Case No. 1:03-CV-211, special counsel for Defendant Fifth Third Bancorp in securities fraud class action litigation. In Re FirstEnergy Shareholder Derivative Litigation, U.S. District Court, Northern District of Ohio, Co-Lead Counsel for lead plaintiff in shareholder derivative action (settled for $25 million). Central Laborer's Pension Fund, Derivatively on Behalf of Ashland, Inc., v.Chellgren, et al. and Ashland, Inc., United States District Court, Eastern District of Kentucky, at Covington, special counsel for Defendant Ashland, Inc. in shareholder derivative action. Products Liability, Antitrust and Other Complex Litigation The firm enjoys a highly successful litigation practice in several areas, including products liability, antitrust, commercial, insurance and FELA litigation. The following are examples of litigation in which the firm has been Co-Chair, Lead Counsel and/or Class Counsel in the following representative cases: In Re Microsoft Corp. Litigation, United States District Court, District of Maryland (Co- Chair) In Re Vitamins Antitrust Litigation, United States District Court, District of Columbia; United States District Court, Southern District of Ohio, Western Division (Counsel for Procter & Gamble) In Re Castano Tobacco Litigation, (Lead counsel for settlement negotiations and member of the Executive Committee)(and related cases including the Louisiana state class action, the Ohio state class action, the New Mexico state class action, the Maryland state class action, the District of Columbia class action, the New York state class action, the California state class action, the Pennsylvania state class action, the Alabama state class action, the Minnesota state class action, the Texas state class action, the New Jersey state class action, and the Illinois state class action.) 2 2 In Re United Parcel Service Inc. Excess Value Insurance Coverage Litigation, United States District Court, Southern District of New York (Co-Lead Counsel) City of Cincinnati v. Beretta, U.S.A. Corp., et al., Court of Common Pleas, Hamilton County, Ohio Procter & Gamble v. Amway Litigation, United States District Court, Southern District of Texas, at Houston In Re Fernald Litigation (I and II), United States District Court, Southern District of Ohio, Western Division In Re Choice Care Litigation, United States District Court, Southern District of Ohio, Western Division In Re Chubb Drought Insurance Litigation, United States District Court, Southern District of Ohio, Western Division Procter & Gamble v. Bankers' Trust Litigation, United States District Court, Southern District of Ohio In Re Union Carbide Corporation, Gas Plant Disaster at Bhopal, India On December 6, 1984, United States District Court, Southern District of New York In Re MGM Grand Hotel Fire Litigation, United States District Court, District of Nevada In Re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products Liability Litigation, United States District Court, Eastern District of Pennsylvania (National Co- Chair of Litigation Committee). In Re Telectronics Pacing Systems, Inc., Accufix Atrial "J" Leads Products Liability Litigation, United States District Court, Southern District of Ohio, Western Division (Chair of Litigation Committee). In Re Silicone Gel Breast Implant Products Liability Litigation, United States District Court, Northern District of Alabama, Southern Division (National Co-Chair of Litigation Committee). Bowling, et al. v. Pfizer, et al., United States District Court, Southern District of Ohio, Western Division. In Re Copley Pharmaceuticals, Inc., "Albuterol" Products Liability Litigation, United States District Court, District of Wyoming. Corporate Governance, Shareholder Rights and Proxy Campaigns The firm seeks to promote good corporate governance and protect shareholder rights by prosecuting shareholder derivative actions for breaches of fiduciary duties and gross mismanagement by companies and their executive officers. The firm had addressed issues of gross mismanagement, corporate waste, shareholder voting issues and excessive executive compensation. 3 2 The firm also represents several public companies in a variety of matters including securities offerings, tender offers, required reporting such as reports on Forms 10-K, 10-Q and 8- K and compliance with the Securities Act, Exchange Act and stock exchange rules. We have developed a specialty in advising corporations on good corporate governance practices and policies and assisting them with shareholder relations and responding to shareholder proposals. We also assist shareholder clients in winning proxy contests and corporate clients in defending against proxy contests. In one notable case, the firm represented a small group of dissenting shareholders in waging a proxy solicitation campaign and successfully elected a majority of its candidates to the company's board of directors. We also prosecute and defend against derivative actions, claims for breach of fiduciary duty and proxy violations in state and federal courts. The attorneys in the practice area have up-to-date knowledge of changing SEC rules and regulations on corporate governance issues, a comprehensive understanding of a wide variety of corporate law transactions and both substantive and courtroom expertise in the specific legal areas involved. Trade Secret, Employment Litigation and Civil Rights Litigation The firm has developed expertise in negotiating, drafting and litigating non-competition and trade secret issues. The firm has successfully prosecuted actions against employers and other institutions that violate federal or state discrimination and civil rights laws. The firm also defends clients in federal and state employment disputes. We have a large client range, including Fortune 500 companies, manufacturers, medical practices, distributors, professional service organizations and restaurant chains. General Business Representation The firm's corporate attorneys have represented hundreds of businesses, including corporations, partnerships, limited liability companies and joint ventures, in practically every aspect of their businesses. They have provided legal services for formation and organization matters and drafting and negotiation of operating agreements, shareholder agreements, employment agreements, leases, mergers, acquisitions, financing transactions, and real and personal property acquisitions and dispositions. We also have substantial experience in the successful resolution of shareholder disputes. 4 2 STANLEY M. CHESLEY PROFESSIONAL PROFILE Stanley M. Chesley is the senior partner of Waite, Schneider, Bayless & Chesley Co., L.P.A. He is a 1960 graduate of the University of Cincinnati College of Law, a licensed member of the Ohio Bar, Kentucky Bar, Federal Bar and has also been admitted to the Bar of the United States Supreme Court. Mr. Chesley is the Past Chairman of the Supreme Court of Ohio, Board of Commissioners on Grievances and Discipline and is a current member of the Board of Commissioners on Grievances and Discipline. Mr. Chesley has been Co-Chairman, Lead Counsel and/or Class Counsel in the following cases: Securities Class Actions and Derivative Case Representation: In Re DPL Inc. Securities Litigation, U.S. District Court, Southern District of Ohio, Co- Lead Counsel for lead plaintiffs and class in prosecution of federal securities fraud claims; $145.5 global settlement of federal and state cases for clients. Freddie Mac Securities Litigation, Lead Case No. 03-cv-4261, U.S. District Court, S.D.N.Y., Lead Counsel for lead plaintiffs and class in nationwide securities fraud class action litigation. In Re Fannie Mae Securities Litigation, U.S. District Court, District of Columbia, Consolidated Civil Action No. 04-cv-01639, Lead Counsel for lead plaintiffs in securities fraud class action litigation. In Re FirstEnergy Shareholder Derivative Litigation, U.S. District Court, Northern District of Ohio, Co-Lead Counsel for lead plaintiff in shareholder derivative action. In Re OM Group, Inc. Securities Litigation, U.S. District Court, Northern District of Ohio, Eastern Division, Case No. 1:02-CV-2163, counsel for lead plaintiffs and class in securities fraud class action litigation. David Slone, et al. v. Fifth Third Bancorp, et al., U.S. District Court, Southern District of Ohio, Western Division, Case No. 1:03-CV-211, special counsel for Defendant Fifth Third Bancorp in securities fraud class action litigation. Central Laborer's Pension Fund, Derivatively on Behalf of Ashland, Inc., v. Chellgren, et al. and Ashland, Inc., United States District Court, Eastern District of Kentucky, at Covington, special counsel for Defendant Ashland, Inc. in shareholder derivative action. Product Liability and Other Litigation: In Re Procter & Gamble Company Securities Litigation, United States District Court, Southern District of Ohio, Western Division. 5 2 In Re Vitamins Antitrust Litigation, The Procter & Gamble Company, et al. v. BASF Aktiengesellschaft, et al., United States District Court, District of Columbia. Procter & Gamble v. Bankers' Trust Litigation, United States District Court, Southern District of Ohio, Eastern Division. Academy of Medicine, et al. v. Aetna Health, Inc., et al. Court of Common Pleas, Hamilton County, Ohio; Boone Cir. Ct., Boone County, Kentucky USX Corp. v. Penn Cent. Corp., Court of Appeals of Ohio, Eighth District, Cuyahoga County, Ohio. Procter & Gamble, et al. v. Amway Corporation, et al., United States District Court, Southern District of Texas; United States District Court, District of Utah, Central Division. Amway Corporation v. Procter & Gamble, et al., United States District Court, Western District of Michigan, Southern Division. City of Cincinnati v. Beretta U.S.A. Corp., et al., Hamilton County Court of Common Pleas, Hamilton County, Ohio. TRW Inc., v. Industrial Systems Assoc., Inc., United States District Court, Northern District of Ohio, Eastern Division. Worldwide Basketball and Sport Tours, Inc., et al. v. The National Collegiate Athletic Association, United States District Court, Southern District of Ohio, Eastern Division. In Re Microsoft Corp. Litigation, United States District Court, District of Maryland (Co- Chair). In Re Castano Tobacco Litigation, (Lead counsel for settlement negotiations and member of the Executive Committee) (and related cases including the Louisiana state class action, the Ohio state class action, the New Mexico state class action, the Maryland state class action, the District of Columbia class action, the New York state class action, the California state class action, the Pennsylvania state class action, the Alabama state class action, the Minnesota state class action, the Texas state class action, the New Jersey state class action, and the Illinois state class action.) In Re Premiere Technologies Litigation, United States District Court, Northern District of Georgia. In Re United Parcel Service Inc. Excess Value Insurance Coverage Litigation, United States District Court, Southern District of New York (Co-Lead Counsel). In Re Air Crash Near Peggy's Cove Nova Scotia on September 2, 1998, United States District Court, Eastern District of Pennsylvania. 6 2 In Re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products Liability Litigation, United States District Court, Eastern District of Pennsylvania (National Co- Chair). In Re Telectronics Pacing Systems, Inc., Accufix Atrial "J" Leads Products Liability Litigation, United States District Court, Southern District of Ohio, Western Division (Chair). In Re Silicone Gel Breast Implant Products Liability Litigation, United States District Court, Northern District of Alabama, Southern Division (National Co-Chair). Bowling, et al. v. Pfizer, et al., United States District Court, Southern District of Ohio, Western Division. In Re Copley Pharmaceuticals, Inc., "Albuterol" Products Liability Litigation, United States District Court, District of Wyoming. In Re Fernald Litigation (I and II), United States District Court, Southern District of Ohio, Western Division. In Re US Air Disaster at New York LaGuardia Airport on March 22, 1992, United States District Court, Northern District of Ohio, Eastern Division. In Re Choice Care Litigation, United States District Court, Southern District of Ohio, Western Division. In Re Chubb Drought Insurance Litigation, United States District Court, Southern District of Ohio, Western Division. In Re San Juan DuPont Plaza Hotel Fire Litigation, United States District Court, District of Puerto Rico. In Re Northwest Flight #255 Air Crash at Detroit Metropolitan Airport, on August 16, 1987, United States District Court, Eastern District of Michigan, Southern Division. In Re Aircrash Disaster of Pan Am World Airways Flight #103, on December 21, 1988 at Lockerbie, Scotland, United States District Court, Eastern District of New York, At Brooklyn. In Re Air Crash at Gander, Newfoundland on December 12, 1985, United States District Court, Eastern District of Kentucky, At Louisville. In Re Union Carbide Corporation, Gas Plant Disaster at Bhopal, India On December 6, 1984, United States District Court, Southern District of New York. In Re MGM Grand Hotel Fire Litigation, United States District Court, District of Nevada 7 2 In Re "Bendectin" Products Liability Litigation, United States District Court, Southern District of Ohio, Western Division. In Re Beverly Hills Fire Litigation, United States District Court, Eastern District of Kentucky, at Covington. 8 2 JAMES R. CUMMINS PROFESSIONAL PROFILE James R. Cummins is the Chairman of the Corporate and Securities Law Department of Waite, Schneider, Bayless & Chesley Co. L.P.A. He has been recently recognized, among only 236 lawyers in 40 countries, for his corporate governance experience and expertise by the International Who's Who of Corporate Governance Lawyers. He has practiced in the securities and corporate governance fields for over 25 years, including securities fraud class actions, shareholder derivative actions, proxy contests and board governance matters, as well as advising corporate officers and directors in compliance and enforcement matters. In 2003, Jim was co-lead trial attorney in the successful prosecution of a federal securities fraud claim and state breach of fiduciary duty claim against DPL Inc. (NYSE: DPL). The global settlement of $145.5 million in the combined federal and state cases ranks as the fourteenth largest in the history of securities fraud cases. He currently supervises the firm's work as Lead Counsel in the Freddie Mac and Fannie Mae securities class action litigation, Ohio Public Employees Retirement System, et al. v. Federal Home Loan Mortgage Corporation, et al., S.D.N.Y. and In Re Fannie Mae Securities Litigation, U.S.D.C., District of Columbia. Jim was co-trial counsel for 200 physicians in the nation's first successful antitrust, RICO and securities fraud case against a HMO system. The trial team secured a jury verdict of $108 million for their clients, the largest award in the history of Hamilton County, Ohio, which eventually resulted in $65 million payout to the clients. Jim's creative and unique approach to proxy contests resulted, in 1996, in a successful change in management of an American Stock Exchange bank holding company. Characterized as an "exercise in corporate democracy," by US Banker, the monthly bible of the banking industry, Jim was recognized as the first attorney in the nation to use the Internet's worldwide web in a proxy contest, communicating rapidly and simultaneously with all of the company's shareholders. According to the Cincinnati Enquirer, Jim "became the 'nerve center' through which the proxy fight was staged." His achievements in complex corporate litigation were recognized in an American Lawyer survey of 400 corporate general counsel, as one of two recommended corporate litigators in the southern Ohio region. Additional Information Practice Areas: Securities Law; Corporate Law; Class Action, Derivative and Commercial Litigation; Health Care; Antitrust. Admitted: 1967, Ohio; 1970, U.S. District Court, Southern District of Ohio; 1995, U.S. Court of Appeals, Sixth Circuit; 1999, Kentucky; 2004, District of Columbia. Law School: University of Cincinnati, J.D., 1967; New York University, LL.M. in International Business Transactions, 1968. College: Princeton University, A.B., 1964. 9 2 Member: Cincinnati (Member, Long Range Planning Subcommittee, 1989), Ohio State, Kentucky and American (Member, Committee on Federal Regulation of Securities, 1981-; Member, Subcommittee on Investment Companies and Investment Advisers, 1981-) Bar Associations. Biography: Phi Delta Phi. Case Note Editor, University of Cincinnati Law Review, 1966-1967. Editor, New York International Law Review, 1967-1968. Lecturer: "Attorney Responses to Accountant Opinion Request Letters," Cincinnati Bar Association, 1987; "Civil RICO," Ohio Northern University, 1988; "The Year 2000 Time Bomb: Legal & Corporate Governance Implications for Board of Directors, Trustees and Officers," Cincinnati and Columbus Bar Associations, 1999; Co-chair with KPMG Forensics, "Corporate Ethics: Can Trust Be Rebuilt – Pro-Active Steps Toward Effective Corporate Governance," Cincinnati Bar Association, 2002. Member, Board of Commissioners on Grievances and Discipline of Supreme Court of Ohio, 1989-1994. Member, Advisory Committee on Local Rules, U.S. District Court for the Southern District of Ohio. Representative Clients, Engagements and Recent Honors Securities and Shareholder Derivative Actions: Freddie Mac Securities Litigation, U.S. District Court, S.D.N.Y. Lead Counsel for lead plaintiffs in national federal securities fraud class action against Freddie Mac and three of its former executive officers. In Re Fannie Mae Securities Litigation, U.S. District Court, District of Columbia, Consolidated Civil Action No. 04-cv-01639, Lead Counsel for lead plaintiffs in securities fraud class action litigation. In Re DPL Inc. Securities Litigation, U.S. District Court, SD Ohio, Co-Lead Counsel for lead plaintiffs in federal securities fraud class action. Global settlement of $145.5 million for combined federal and state cases is the fourteenth largest securities class action and settlement in the United States (as of 2004). In Re OM Group, Inc. Securities Litigation, U.S. District Court, Northern District of Ohio, Eastern Division, Case No. 1:02-CV-2163, counsel for lead plaintiffs and class in securities fraud class action litigation. David Slone, et al. v. Fifth Third Bancorp, et al., U.S. District Court, Southern District of Ohio, Western Division, Case No. 1:03-CV-211, special counsel for Defendant Fifth Third Bancorp in securities fraud class action litigation. ChoiceCare Litigation, U.S. District Court, SD Ohio Co-lead trial attorney; obtained jury verdict of $108 Million against ChoiceCare for physicians. Austern Trust v. Peter H. Forster, et al., Hamilton Cty. Common Pleas Represented plaintiff in shareholder derivative action resulting in a $5.5 million settlement, which included important corporate governance reforms. 10 2 In Re FirstEnergy Shareholder Derivative Litigation, U.S. District Court, Northern District of Ohio, Co-Lead Counsel for plaintiffs in shareholder derivative action. Other Litigation and Regulatory Enforcement Matters: State of Ohio, Milk Antitrust Litigation, U.S. District Court, SD Ohio Co-lead trial attorney with Stanley M. Chesley; obtained settlement for Ohio schools in price fixing litigation. Clorox (NYSE:CLX): Defense litigation against claims of P & G (three cases); continuing defense litigation services. Countrywide Credit Industries (NYSE:CCR): Prosecution of noncompetition and trade secret case. Johnson & Johnson (NYSE:JNJ): Represent subsidiaries, including Ethicon Endo-Surgery, defense of non- competition litigation; representation of officers and employees in shareholder litigation involving Theragenics Corporation (not a J&J entity); employment law defense litigation. Structural Dynamics Research Corporation (NASD:SDRC) Defense representation of CEO in civil securities litigation and regulatory enforcement matters. F&C Flavoring Co. (NASD) Defense representation of Chairman and outside directors in shareholder litigation and regulatory enforcement matters. Corporate Governance Projects: Professional Bancorp (AMEX:MDB) Successful proxy contest; board restructuring; crisis management; corporate governance matters; SEC compliance. Frisch's Restaurants (AMEX:FRS) Representation of board against dissident challenges; board restructuring; crisis management; continuing representation for SEC compliance and corporate governance matters. Recent Honors: 11 2 The International Who's Who of Corporate Governance Lawyers (2002), selected as one of 66 U.S. attorneys (236 internationally), recognized by their peers and their clients as leaders in the field of corporate governance. Chairman & Featured Speaker, Corporate Ethics: Can Trust be Rebuilt (2002) with KPMG Forensic, Cincinnati Bar Association. Featured Speaker, Sarbanes-Oxley Act Implications for Internal Auditors (2002) with Protiviti (Arthur Andersen's former Risk Management Practice Group. The American Lawyer, Corporate General Counsels' Selection (1 of 2 firms in Tri-State) for Litigation Resource in Ohio. 25075 12