February 2015 Newsletter


•  David R. Scott, Scott+Scott Managing Partner, Selected to Who’s Who Legal: Competition 2015

•  Joseph Guglielmo, Scott+Scott Partner, Appointed to The Sedona Conference’s Steering Committee on eDiscovery

•  Scott+Scott Secures Preliminary Approval of Class Action Settlement with Capital One Bank (USA), N.A.

•  Scott+Scott Files Lawsuit on Behalf of Consumers Regarding Defective Airbags Manufactured by Takata Corporation

•  SEC Focuses on Transfer Agents to Combat Microcap Stock Fraud


David R. Scott, Scott+Scott Managing Partner, Selected to Who’s Who Legal: Competition 2015

David R. Scott, the managing partner of Scott+Scott, Attorneys At Law, LLP, has been selected to Who’s Who Legal: Competition 2015.  Each year, Who’s Who Legal identifies the world’s foremost competition and antitrust lawyers, who are selected based on comprehensive, independent survey work with both general counsel and private practitioners around the world.  The list will be published in March 2015.

Mr. Scott’s practice focuses on antitrust and complex civil litigation on behalf of businesses and institutional investors.  Scott+Scott has recouped billions of dollars in losses for victims of price-fixing cartels.  Among other cases, Scott+Scott serves as co-lead counsel for a nationwide class in In Re Foreign Exchange Benchmark Antitrust Litigation, a lawsuit alleging that the world’s largest banks colluded to fix prices in the $5.3 trillion-a-day foreign exchange market.  One of the bank defendants, JPMorgan Chase, agreed to an early settlement of the case with the class before the Court ruled on the banks’ motion to dismiss.  Scott+Scott also served as co-lead counsel in Dahl v. Bain Capital Partners, an action that recently settled for $590.5 million, where investors in large-cap, publicly-traded companies alleged that prominent private equity firms in the United States conspired to depress purchase prices in the largest leveraged buyouts between 2003 and 2007.  Mr. Scott was also lead counsel in Red Lion Medical Safety v. Ohmeda, a lawsuit alleging that one of the leading manufacturers of medical anesthesia equipment excluded independent service organizations from the market for servicing its equipment.  The case was successfully resolved in settlement negotiations before trial.

Mr. Scott has received numerous awards, including a highly recommended ranking by Benchmark Litigation for three consecutive years.  He has been a featured lecturer at conferences around the world and has frequently appeared as a guest commentator on CNBC and Fox News.

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Joseph Guglielmo, Scott+Scott Partner, Appointed to The Sedona Conference’s Steering Committee on eDiscovery

Scott+Scott is proud to announce that partner Joseph Guglielmo was appointed to The Sedona Conference’s (“TSC”) Steering Committee on Working Group 1 – Electronic Document Retention and Production (“WG1”).  TSC was founded in 2002 to “mov[e] the law forward in a reasoned and just way.”  Shortly thereafter, TSC formed WG1 to “develop principles and best practice recommendations for electronic document retention and production in civil litigation.”  WG1 enjoys broad participation by members of the plaintiffs’ bar, defense bar, and various service providers.  These varied perspectives serve to enrich the discussions within WG1 as it strives to move the law forward with respect to eDiscovery.

Mr. Guglielmo has been an active member of TSC for over a decade and has been a frequent speaker on eDiscovery topics.  At TSC’s annual meeting in New Orleans, Mr. Guglielmo co-led a discussion of proposed updates and revisions to The Sedona Principles.  The Sedona Principles were last updated in 2007 in response to the 2006 amendments to the Federal Rules of Civil Procedure.  Since that time, the terminology, technology, and law have continued to evolve.  As a result, TSC undertook a comprehensive review of The Sedona Principles to determine whether and to what extent any of the principles should be revised.  The proposed revisions to The Sedona Principles garnered so much participation that an additional session was added the following day to continue the discussion.

Mr. Guglielmo recently served as a panelist for The Sedona Conference All Voices Meeting in November 2014 concerning the proposed updates and revisions to The Sedona Principles.  Additionally, Mr. Guglielmo will serve as a faculty member in the Practicing Law Institute’s upcoming continuing legal education seminar on Government Investigations 2015: Electronic Information in Investigation and Response.  In this seminar, Mr. Guglielmo will participate with an esteemed appellate justice, attorneys, and consultants in discussing a company’s obligations when faced with government investigations and parallel civil proceedings.  This topic is particularly timely given the string of data breaches that occurred in 2013 and 2014 and the government investigations and civil lawsuits that followed.

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Scott+Scott Secures Preliminary Approval of Class Action Settlement with Capital One Bank (USA), N.A.

On January 2, 2015, Judge Leonie M. Brinkema of the United States District Court for the Eastern District of Virginia preliminarily approved a class action settlement in Murr v. Capital One Bank (USA), N.A.  Scott+Scott, Attorneys at Law, LLP, was appointed Class Counsel on behalf of the class which consists of all persons within the United States from August 1, 2008 to January 2, 2015 who accepted a 0% Offer using an Access Check or No-Hassle Check.

On August 30, 2013, Margaret Murr filed a class action complaint alleging that Capital One Bank (USA), N.A. (“Capital One”) failed to disclose certain information regarding minimum payments and the grace period for purchases in relation to its 0% APR special transfer offers.  The complaint alleged that Capital One’s conduct violated the federal Truth in Lending Act, the federal Fair Credit Billing Act, and the Arizona Consumer Fraud Act.

After several months of litigation, a settlement was reached.  As part of the settlement, Capital One has agreed to enhance the disclosures in its 0% Offer materials addressing certain effects alleged in the litigation.  Furthermore, Capital One will pay either a $2.00 or a $5.50 cash award to certain specified settlement class members who comply with specific requirements set forth in the settlement agreement.  In no event will Capital One pay less than a total of $3.125 million to the settling class members.

If you want more information concerning the settlement or think you may be a member of the settlement class, please visit www.CapitalOneZeroPercentSettlement.com, which contains settlement information, relevant deadlines, court filings, and the information necessary to file a claim.  The Court has scheduled a final hearing with respect to the settlement for June 26, 2015.

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Scott+Scott Files Lawsuit on Behalf of Consumers Regarding Defective Airbags Manufactured by Takata Corporation

Scott+Scott filed a class action on behalf of consumers against Takata Corporation (“Takata”), as well as ten different vehicle manufacturers, relating to defective airbags manufactured by Takata and installed in certain automobiles by the vehicle manufacturers.  To date, approximately 16 million motor vehicles with Takata-manufactured airbags have been recalled worldwide due to their defects, with potentially millions of additional vehicles being impacted.  The ten vehicle manufacturers are Honda, Ford, BMW, Nissan, Toyota, Chrysler, General Motors, Mazda, Mitsubishi, and Subaru. 

Takata is a Japanese corporation and one of the world’s largest manufacturers of transportation-related safety devices, including airbags.  Recently, it has become public knowledge that Takata and the ten vehicle manufacturers produced or installed defective airbags in millions of vehicles, and then actively concealed the defects from federal regulators and consumers.  These defects are often exacerbated in hot and humid conditions.  On October 22, 2014, the National Highway Traffic Safety Administration issued a Consumer Advisory in which it listed a total of 53 different models manufactured by the vehicle manufacturers, spanning from 2000 to 2011, as potentially containing the defective Takata airbags.

These defective airbags not only cannot be relied upon to provide expected safety, but in many cases, have become a weapon, exploding with metal debris and projecting shrapnel into passengers.  Indeed, numerous passengers have died or have been significantly injured by these defective airbags.  Furthermore, people who purchased or leased vehicles containing the defective airbags have suffered a significant diminution in the value of their automobiles.

Despite knowing of the defective nature of these airbags for many years, Takata failed to inform government regulators or the public of these problems.  Furthermore, Takata and the vehicle manufacturers failed to recall any of the impacted vehicles until only very recently.  Disturbingly, publicly available information indicates that Takata and the vehicle manufacturers may have taken steps to actively conceal the defects from consumers.  This includes ordering Takata engineers to delete their findings of defects, destroy the evidence, and remain silent about their discoveries, as well as their proposed redesign of the malfunctioning airbag parts.  Management of the vehicle manufacturers reportedly learned about the defects from Takata, but also failed to take any remedial action until only very recently.

In the lawsuit filed by Scott+Scott in the Northern District of Alabama, the plaintiffs allege five different causes of action: (1) violation of the federal Magnuson-Moss Warranty Act; (2) fraudulent concealment; (3) unjust enrichment; (4) breach of express warranty; and (5) breach of the implied warranty of merchantability. 

This lawsuit is one of many nationwide filed against Takata and the vehicle manufacturers involving the defective Takata airbags.  These cases are the subject of a United States Judicial Panel on Multidistrict Litigation (“JPML”) proceeding.  It is possible that these cases will be centralized and transferred in one jurisdiction for pre-trial coordination.

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SEC Focuses on Transfer Agents to Combat Microcap Stock Fraud

The U.S. Securities and Exchange Commission (“SEC”) is now focusing on transfer agents in an effort to combat microcap stock defrauders.  Transfer agents hold a “unique position” to identify and prevent unregistered, restricted shares from being sold illegally by detecting red flags and other indicators of wrongdoing.  Although currently lightly regulated, the SEC is in the early stages of drafting new rules for transfer agents.

Transfer agents are back-office businesses hired by companies to keep track of shareholder records and changes in ownership.  When transfer agents act as registrars, they assume the issuer’s responsibility to maintain the official list of security holder accounts and to monitor the issuance of securities with a view to preventing unauthorized issuances.  Transfer agents also keep track of the restrictive legends and “stop transfer” orders that distinguish restricted securities and control shares from freely-tradable securities.  As such, transfer agents are often in a position to prevent unregistered securities from being distributed in violation of the Securities Act.  This role is most notable with microcap stocks, because, typically, there is little, if any, meaningful disclosure or independent research regarding such companies.  Fraudsters can lie to or mislead transfer agents so that restrictions on shares are removed, or unregistered shares are allowed to be traded.

Microcap stock fraud involves “microcap” companies, generally those with a market capitalization of under $250 million, generally penny stocks not listed on a national exchange.  Microcap stock fraud typically refers to “pump and dump” schemes, involving the use of false or misleading statements to hype stocks, which are then “dumped” on the public at inflated prices.  These stocks that were cleared by transfer agents for trading are then “dumped,” leaving fraudsters with larges gains before the price collapses.

There are currently about 450 transfer agents registered with the SEC, and the overall industry maintains roughly 276 million shareholder accounts for about 1.5 million issuers.  The transfer agent industry is split between operations housed in some of the nation’s largest financial firms and hundreds of mom-and-pop shops.  Thus far, the transfer agent industry has been lightly regulated and the SEC has not provided much regulatory guidance.  While transfer agents are required to register with the SEC, experts say it can take less than 90 minutes to fill out the form, which is not followed up by any rigorous review by the SEC.  On average, the SEC conducts compliance exams for only about 40 to 45 transfer agents a year, prioritizing transfer agents that are considered a higher risk.

In 2014, the SEC brought several enforcement cases against transfer agents.  Although some of these cases focused on disclosure violations, others uncovered more serious violations, such as issuing fake stock certificates and stealing client money to pay business expenses.

Most recently, on January 13, 2015, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued its Examination Priorities for 2015.  OCIE specifically selected transfer agents as a focus with respect to a few issues.  OCIE will expand its previous initiative on cybersecurity to now include transfer agents and will also more actively review whether transfer agents are playing a role in microcap stock fraud.  The SEC has only begun its re-assessment of the SEC’s transfer agent rules and new rules will be adopted shortly to reflect current market practices.


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February Events


Conferences and Educational Seminars


+February 7-9, 2015

Pennsylvania AFL-CIO 2015 Biennial Legislative Conference

Harrisburg Hilton

Harrisburg, PA


Strength In Unity is this year’s theme. Topics will include legislation that affects the Labor Movement and Union Pensions, practical administration of providing benefits pursuant to pension reform, applicable court orders, and actuarial concepts associated with defined benefit plan funding.  Discussions will provide attendees with ways to move forward with pro-job legislation that the labor movement can support and ways to protect the rights of Union Members and prepare to fight union opposition on key legislative issues. State Legislators will attend the opening reception.


+February 11-13, 2015

National Association of Public Pension Attorneys (NAPPA) Winter Conference

Tempe Mission Palms Hotel

Tempe, AZ


The National Association of Public Pension Attorneys is a legal professional and educational association.  The NAPPA organization is a practical and valuable resource tool for attorneys in the public pension arena.  Educational seminars provide peer to peer interaction in several practice areas as well as up to date information regarding pertinent litigation and legislation.


+February 11-13, 2015

The Louisiana Trustee Education Council (LATEC) in Conjunction with Investment Education Symposium by Opal Financial Group

Astor Crowne Plaza

New Orleans, LA


 The purpose of the Louisiana Trustee Education Council (LATEC) is to encourage and facilitate the education of its membership in all matters related to their duties as the holders of trust assets by those bearing a fiduciary responsibility for such assets.  LATEC develops and conducts educational programs and networking opportunities among trustees, administrators and staffs of pension funds designed to foster and maintain the level of expertise demanded of fiduciaries under applicable law so that they may better serve their members and their respective funds. Opal Financial Group coordinates conferences for entities such as Public Funds, Family Offices, Foundations, Taft-Hartley Funds and Endowment.



+February 12-17, 2015

38th Annual National Labor and Management Conference

Westin Diplomat Conference Center

Hollywood, Florida


The National Labor and Management Conference has been described as the best Labor-Management meeting in the country.  The six day event offers seminars for both labor and management in the following areas: Fiduciary & Legal, Pension Fund Investment, Health & Welfare as well as general topics including prevailing wage, labor shortages, and safety issues.  More than 400 attendees participate in the annual forum representing Union leadership, senior corporate management, Trustees, Fund administrators, Labor lawyers, Fund counsel and advisors as well as Labor relations professionals from both labor and management.  The program content is developed by a distinguished group of business executives, labor leaders, public officials and academics.  The meeting agenda is designed for meaningful interaction and networking opportunities.


+February 22-25, 2015

8th Annual North American Iron Workers / IMPACT Labor -Management Conference

RIO Hotel & Conference Center

Las Vegas, NV

The 2015 Ironworkers IMPACT Conference  will provide the most up to date developments in both labor and management to the Iron Workers’ in attendance.  Sessions will be devoted to healthcare reform, healthcare exchanges and their effects on union workers as well as employers. Delivering three days of world-class conference sessions and networking opportunities for industry ironworkers, contractors and business leaders, the Iron Workers/IMPACT conference provides strategies for effective  project labor agreements and protecting assets.

                   + February 23-25, 2015

             National Association of Attorneys General (NAAG)

 The Ritz Carlton

 Washington, DC    


The National Association of Attorneys General (NAAG) was established more than 100 years ago to provide Attorneys General an opportunity to communicate between the states’ chief legal officers on legal and law enforcement matters.  NAAG’s focus is: "To facilitate interaction among Attorneys General as peers and to facilitate the enhanced performance of Attorneys General and their staffs." NAAG offers "cooperative leadership," not only between the states, but also with their federal counterparts. NAAG has 3 major meetings: the Association’s winter meeting in Washington, DC, the NAAP Presidential Initiative Summit and the Summer Meeting. Portions of these meetings may be open to the public and require advance registration. This is also the first public NAAG annual meeting when the 14 newly-elected state and territorial attorneys general are likely to attend.


Government Finance Officers’ Association Conferences (http://www.gfoa.org)


+February 5, 2015

             Government Finance Officers of Connecticut  (GFOA-CT)

             Crowne Plaza Conference Center
             Cromwell, Connecticut

 +February 6, 2015

 Government Finance Officers’ Association of Missouri Winter Seminar

 Stone Creek Inn

 Columbia, Missouri                          

   +February 18-20, 2015

 Arizona GFOA Winter Conference

 Prescott Resort

 Prescott, Arizona


+February 18-20, 2015

California Society of Municipal Finance Officers (CSMFO)

Monterey Convention Center and Portola Plaza

Monterey, California

February 20, 2015

Michigan GFOA Spring Seminar

Best Western Plus

Lansing, Michigan

+February 24, 2015

Vermont Government Finance Officers’  Winter Workshop

Lake Morey Resort

Fairlee, Vermont


+February 25-27, 2015

Government Finance Officers’ Association of Alabama (31st Annual conference)

            The Hotel at Auburn University and Dixon Convention Center

            Auburn, Alabama

  +February 26, 2015

Maine Government Finance Officers’ Winter Seminar  Training Event

Maple Hill Farms

Hallowell, Maine

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Scott + Scott LLP is a nationally recognized law firm headquartered inConnecticut with offices in New York City, Ohio and California. The firm represents individual as well as institutional investors who have suffered from corporate stock fraud. Scott+Scott has participated in recovering billions of dollars and achieved precedent-setting reforms in corporate governance on behalf of its clients. In addition to being involved in complex shareholder securities and corporate governance actions, Scott+Scott also has a significant national practice in antitrust, ERISA, consumer, civil rights and human rights litigation. Through its efforts, Scott+Scott promotes corporate social responsibility.

Scott+Scott’s PT+SM System is the firm’s proprietary investment portfolio tracking service. Carefully combining the firm’s proprietary computer-based portfolio monitoring software with Scott+Scott’s hands-on approach to client  relations is a proven method for institutional investors and their trustees to successfully

  • Monitor their investment portfolios  
  • Identify losses arising from corporate fraud    
  • Consider what level of participation any given situation requires   
  • Recover funds obtained on their behalf through investor litigation action  

To obtain more information about Scott+Scott’s PT+SM services or to schedulea presentation to fund trustees, fund advisors or asset managers, please contact:    David R. Scott + Toll Free: 800.404.7770     email: drscott@scott-scott.com + UK Tel: 0808.234.1396