Litigator of the Week: Andrew Cuomo

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August 22, 2008 2:30 PM

Litigator of the Week: Andrew Cuomo

Posted by Ben Hallman

From The Am Law Litigation Daily

Don't tell Andrew Cuomo that August is for building sand castles at the beach. Over the past three weeks, the New York Attorney General wrestled four major banks to the mat, forcing them to disgorge millions in fines, and, more significantly, to buy back at face value billions of dollars of auction-rate securities that consumers have been stuck with since the market for the securities froze in February.

This week Cuomo applied a hammer lock to a few more Wall Street firms, hoping for a five-point take down. (The Litigation Daily, by the way, has a new favorite Olympic sport). On Monday Wachovia agreed to pay a $50 million fine and to buy back $8.5 billion of the debt in a deal struck with Cuomo, other state regulators, and the Securities and Exchange Commission. On Thursday, the AG threatened to sue Merrill Lynch if that bank didn't settle by the end of the day. A few hours later, he reached an agreement with Merrill, along with two more banks: Goldman Sachs and Deutsche Bank.

As part of the settlement, Merrill will pay a fine of $125 million and buy back between $10 billion and $12 billion in auction rate securities from investors. Goldman Sachs will pay a $22.5 million fine and buy back about $1.5 billion in notes, and Deutsche Bank will pay a $15 million penalty and buy back about $1 billion of notes.

We have the lawyer break-down for you. David Zornow and Jay Kasner of Skadden, Arps, Slate, Meagher & Flom represented Merrill, along with Bingham McCutchen's Herbert Janick and Timothy Burke. For Goldman, it was Stephanie Wheeler of Sullivan & Cromwell. Lead outside counsel for Deutsche Bank was Christian Mixter of Morgan, Lewis & Bockius.

Cuomo is an attorney general not afraid to play rough with Wall Street. Sound familiar? Wall Street Journal reporters Amir Efrati and Aaron Lucchetti recently had this take on Cuomo. "If the 50-year-old is now hitting his stride," they write, "it is attributable to some key strategic hires as well as a style that pursues institutions without demonizing individuals in the manner preferred by his predecessor, former New York Gov. Eliot Spitzer."

Up next for Cuomo: According to press reports, 40 more institutions are being investigated. Looks like September will be pretty busy, too.