All too often, derivative actions are filed on the heels of securities fraud class actions.  These cases, which are purportedly brought on behalf of the company against its directors, pose a particular concern for board members.

Gibson Dunn has decades of experience representing companies and their directors and officers in defending, and taking control of, shareholder derivative actions.  Examples include:

•  Computer Sciences Corporation.  We secured the dismissal of consolidated option backdating cases brought against the company, its board of directors, and various senior executives.
•  CSK Auto Corporation, Inc.  We won dismissal of a shareholder derivative suit against directors of CSK Auto Corporation, Inc., one of the largest auto parts and accessories retailers in the United States, involving alleged breaches of duty and violation of the Sarbanes-Oxley Act regarding accounting errors and irregularities discovered during a review of internal controls and the subsequent restatement of the company's financial results for fiscal years 2001 through 2005.
•  Janus Capital Group Board of Directors.  We scored a victory for Janus Capital Group by securing a dismissal of a shareholder derivative action against the Janus Board of Directors in a mutual fund market timing litigation.
•  Openwave Systems, Inc.  We won two dismissals on demand futility grounds of a federal shareholder derivative complaint in a stock option backdating matter  Among other things, the federal court ruled that plaintiff's complaint failed to demonstrate any "pattern" of stock option grants during the relevant time-period that suggested that backdating had occurred.
•  Bear Stearns.  We successfully represented Bear Stearns and its board members in a shareholder derivative action alleging breach of fiduciary duty by members of its board in connection with alleged research analyst conflicts and IPO allocations.  We moved to dismiss the action against Bear Stearns and its entire  board of directors, obtained dismissal, and then won a unanimous affirmance on appeal.