Underwriting Syndicate

An underwriting syndicate led by Morgan Stanley secured an important victory when O’Melveny convinced the plaintiffs to voluntarily dismiss them from a case more than three years after it had been filed and shortly after fact discovery had closed. This Securities Act Section 11 and 12 case arose from Groupon's announcement that it was revising its fourth-quarter and full-year 2011 financial results, primarily due to an increase in the company's reserves for customer refunds under the "Groupon Promise." Shortly after Groupon's announcement, plaintiffs sued Groupon, its officers and directors, and our clients, who had underwritten the company's initial public offering. After the close of discovery, we persuaded plaintiffs' counsel to voluntarily dismiss the underwriter defendants from the case, arguing that it was a waste of resources to pursue claims against the underwriters when plaintiffs would not be able to overcome the underwriters' due diligence defense.