On August 7, 2024, a Chicago federal judge rejected the defendants’ arguments that tossing the lawsuit accusing Abbott Laboratories leaders of concealing known safety issues related to recalled infant formula was in shareholders’ “best interest.”

U.S. District Judge Sunil R. Harjani wrote that current and former directors and senior officers seemingly misunderstood the complaint and”potentially the purpose of derivative litigation more broadly.” According to Judge Harjani, the leaders had essentially argued that the case should be dismissed because going forward with the suit could uncover evidence that could harm the company in future lawsuits. But such an argument “could be made in any derivative suit,” Judge Harjani wrote.

He said tossing the suit for the suggested reason would “in effect nullify all derivative ligation because the directors could always argue that allowing shareholders to bring a derivative litigation that could uncover illicit conduct is not in the best interest of the company.”

“Defendants’ assertion is akin to an academic argument about the true value of derivative litigation, but that is certainly not grounds to dismiss this case under governing law,” Judge Harjani wrote.

In July 2023, the Southeastern Pennsylvania Transportation Authority (SEPTA) and the International Brotherhood of Teamsters Local No. 710 Pension Fund moved to consolidate related derivative cases. U.S. District Judge Manish S. Shah granted the motion, as well as their request to appoint them as co-lead plaintiffs. Kehoe Law Firm represents SEPTA in this action.

SEPTA and Local No. 710 had alleged that the directors repeatedly failed to implement and monitor a compliance and safety program related to Abbott’s infant formula, disregarded their duty to investigate red flags and remedy misconduct, and covered up safety and compliance risks related to the manufacturing and selling of the formula products. “Here, plaintiffs allege that the director defendants failed to exercise their oversight function over acritical safety compliance function which allegedly led to the death of several customers,” JudgeHarjani wrote.

The case is In re Abbott Laboratories Infant Formula Shareholder Derivative Litigation, case number 1:22-cv-05513, in the U.S. District Court for the Northern District of Illinois.

Kehoe Law Firm, specializing in shareholder rights litigation, jointly filed a shareholder derivative action in the U.S. District Court for the District of Maryland against certain officers and directors of Medical Properties Trust Inc. (“Medical Properties”). The complaint seeks to remedy alleged wrongdoing from July 15, 2019, to January 5, 2024. ​

Medical Properties previously acquired numerous hospitals and behavioral health facilities, including fourteen acute care hospitals and two behavioral health facilities owned by Prospect Medical Holdings, Inc. The complaint alleges that Medical Properties failed to properly disclose the underperformance of this asset portfolio, misleading investors about the true financial health of its medical provider tenants.​

The truth began to surface on January 26, 2023, with the release of a report by Viceroy Research LLC, alleging that Medical Properties had engaged in billions of dollars of uncommercial transactions with its tenants and their management teams, purportedly to mask a revenue round-robin scheme, creating an illusion of positive payment histories for distressed tenants and thereby avoid impairment charges.​

On February 23, 2023, Medical Properties disclosed a $283 million impairment charge related to its assets. Subsequently, on January 4, 2024, the company revealed further alleged breaches of fiduciary duties, including approximately $50 million in unpaid rent owed by its largest tenant.​

As a result of these revelations, the price per share of Medical Properties’ common stock experienced significant declines, causing substantial harm to shareholders. The complaint also alleges that five of the Individual Defendants engaged in lucrative insider trading, selling over $58 million worth of common stock while the stock price was alleged to have been artificially inflated.​

For more information about Kehoe Law Firm and its involvement in this matter, please contact Michael Yarnoff at [email protected] or call (215) 792-6676. 

In a significant legal victory, Kehoe Law Firm successfully represented the Southeastern Pennsylvania Transportation Authority (“SEPTA”) in a Second Circuit appeal that reinstated U.S. investor claims against major banks accused of colluding to rig Mexican government bond prices. The appellate decision, issued on Friday, February 9, 2024, overturns a previous dismissal by U.S. District Judge J. Paul Oetken and reestablishes the jurisdiction of the New York district court in the matter.​

The case, filed in 2018 by U.S. pension funds against Mexico-based units of global banking giants, including Bank of America, Citibank, Deutsche Bank, and HSBC, alleged a yearslong collusion to manipulate the Mexican government bond market. The district court had initially dismissed the case, citing a lack of jurisdiction based on the belief that the alleged collusion occurred solely in Mexico. However, the Second Circuit panel, in an opinion written by U.S. District Judge Arun Subramanian, disagreed with the lower court’s decision. The panel found that the plaintiffs plausibly alleged that affiliated brokers in New York were “mere pass-throughs” for the banks, establishing the necessary “in-forum contacts” for jurisdiction.​

The opinion emphasized that using New York as the sales hub for billions of dollars worth of bonds subjected the banks to specific jurisdiction for claims related to the alleged collusion.

Cautioning against broad generalizations, the panel noted that each case must be considered individually. Despite this, it affirmed that the pension funds’ case did not involve difficult line-drawing questions, as the complaint alleged that the defendants were in control of every step of every deal during the alleged class period.  Among the defendants are major banking families, including Santander, BBVA, Citigroup, JPMorgan Chase, Barclays, and others.​

A copy of the opinion can be found here: https://ww3.ca2.uscourts.gov/decisions/isysquery/b4138bc4-498c-4e70-9c0f-80aa15b6ccaa/3/doc/22-2039_opn.pdf​

For more information about Kehoe Law Firm and this matter, please contact John A. Kehoe at [email protected] or call (215) 792-6676. 

John A. Kehoe and Kevin P. Cauley recently participated in an extraordinary conference held at the Royal Sonesta Hotel in New Orleans, LA from February 7- 9, 2024. The conference, aimed at providing comprehensive education and information on investing, fiduciary responsibility, and the selection of money managers, brought together key decision-makers, representatives, and leaders from the nation’s largest pension funds, endowments, foundations, and institutional investors. ​

Prominent speakers included John Keane, Trustee, Jacksonville Police Officers and Firefighters Health Insurance Trust, Senator Edward Price, Chairman of the Senate Retirement Committee, District 2, State of Louisiana, and John Fleming, MD, State of Louisiana Treasurer, among others. Hosted by The Louisiana Trustee Education Council (LATEC), the conference facilitated a platform for participants to delve into discussions on managing some of the most substantial capital flows within both traditional and alternative investment communities. Attendees seized the opportunity to exchange ideas and learn from fellow delegates and presenters who hold influential roles in institutional investing.​

The conference attracted institutional investors from across the country, creating an environment not only for networking but also for learning from the nation’s leading experts, including institutional investors, asset managers, hedge fund managers, and consultants.  LATEC, the sponsor of the conference, plays a crucial role in encouraging and facilitating the education of its membership in all matters related to their fiduciary duties as the custodians of trust assets. The organization is dedicated to developing and conducting educational programs and networking opportunities among trustees, administrators, and staffs of pension funds. The overarching goal is to foster and maintain the level of expertise demanded of fiduciaries under applicable laws, ensuring they can better serve their members and respective funds.​

Kevin P. Cauley and John A. Kehoe’s active participation in this conference underscores their continued support for LATEC and commitment to staying at the forefront of industry trends and developments. As representatives of the Kehoe Law Firm, they contribute to the ongoing dialogue on institutional investing and fiduciary responsibility, further enhancing our ability to provide valuable insights and legal expertise to our clients.​

For more information about Kehoe Law Firm and its involvement in institutional investing matters, please contact Kevin P. Cauley at [email protected] or call (215) 792-6676.

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Kehoe Law Firm proudly announces the successful resolution of a significant case on behalf of our client, FX Primus Ltd (“FX Primus”). On January 24, 2024, the Claims Administrator initiated the distribution of claim checks to Authorized Claimants, including FX Primus, completing the process by February 6, 2024.  The $23,630,000 Settlement Fund, after deducting court-approved fees and costs, was distributed to those who purchased an FX Instrument from an individual or entity from December 1, 2007 through July 17, 2020, and that individual or entity in turn transacted directly with a defendant or alleged co-conspirator; and you lived in NY, AZ, CA, FL, IL, MA, MN, or NC at the time of the transaction.​

The lawsuit alleged that prominent financial institutions, including Citigroup, Standard Chartered, Société Générale, Bank of America, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, RBC, RBS, and UBS (the “Defendants”), conspired to fix foreign currency (“FX”) instrument prices.  This alleged collusion resulted in overcharging individuals and entities when purchasing FX Instruments directly from a Defendant or one of their alleged co-conspirators. While defendants maintained that the claims lacked merit, the Court granted final approval of the Settlements on November 19, 2020.  “We are proud to have represented FX Primus in this litigation and to have achieved such an outstanding result,” said partner John A. Kehoe.   ​

The claims administrator’s website is available here: https://www.fxindirectantitrustsettlement.com/​

For more information about Kehoe Law Firm and its involvement in this matter, please contact John A. Kehoe at [email protected] or call (215) 792-6676.

Today Kehoe Law Firm reaffirmed its commitment to the Louisiana Trustee Education Council (LATEC), a distinguished organization devoted to advancing the expertise of fiduciaries overseeing trust assets. The firm officially renewed its membership, emphasizing its dedication to promoting education and proficiency within the investment community.​

LATEC’s central mission revolves around encouraging and facilitating ongoing education for its members in all facets related to their roles as guardians of trust assets. Recognizing the crucial role fiduciaries play in managing trust assets, LATEC is devoted to equipping them with the necessary tools and knowledge to effectively fulfill their responsibilities.

To achieve this goal, LATEC actively engages in developing and implementing comprehensive educational programs tailored to empower trustees, administrators, and pension fund staff with the expertise needed to navigate the complexities of fiduciary duties under relevant laws.

Beyond educational initiatives, LATEC is committed to establishing networking opportunities that bring together trustees, administrators, and pension fund staff. These gatherings are designed to facilitate the exchange of insights, experiences, and best practices, fostering a collaborative environment that contributes to the continuous enhancement and maintenance of the high level of expertise expected from fiduciaries.

Kehoe Law Firm’s engagement with LATEC comes at a pivotal moment as the association undergoes growth and expansion of its services.  Commenting on the firm’s involvement, Kevin P. Cauley, Director of Business Development, stated, “As a firm, we are dedicated to safeguarding the interests of pension funds and the individuals they serve. Joining LATEC enables us to contribute to a community of like-minded professionals, pooling our expertise to address the evolving challenges facing public pension funds in Louisiana and beyond.”​

For further information about Kehoe Law Firm and its contributions to institutional investing matters, please reach out to Kevin P. Cauley at [email protected] or call (215) 792-6676.