Markets and Trading

Jenner & Block regularly represents clients in a wide range of commodities, securities and derivatives matters.  We represent market participants in criminal, civil and self-regulatory organization investigations; investors in derivatives, commodities and security trading litigation; firms with trade secret, trading technology and other disputes; and clients in transactional matters ranging from the protection of trading strategies, source code and other intellectual property, to fund formation and registration matters.  We also have outstanding leadership in commodity broker bankruptcy and insolvency matters, with members of the firm having  served prominent roles in every significant commodity broker bankruptcy proceeding since the 1980s.  Representative engagements include:

Litigation

• Defending CME Group Inc. in MF Global Holdings, Ltd. Investment Litigation, a multi-district class action litigation brought by commodity customers seeking $1.6 billion, and investigations arising out of the MF Global case.
• Representing a leading asset manager in litigation alleging that interest rate swaps structured by AIG Financial Products terminated as a result of AIG’s collapse.
• Representing the National Futures Association in investigations and litigation arising out of the Peregrine Financial Group collapse following the discovery that Peregrine’s founder had misappropriated more than $200 million in customer funds.
• Prevailed in Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833 (1986), a case in which the U.S. Supreme Court affirmed the Constitutional validity of the CFTC reparations process.
• Represented a high-frequency trading firm in trial, appeal and arbitration of non-compete and trade secret (trading strategies) infringement claims seeking hundreds of millions in damages.
• Successfully defended against an NFA action charging misleading advertising, excessive trading and failure to supervise.
• Conducted internal investigation into alleged improprieties in a stock exchange’s stock depository procedures, resulting in voluntary disclosures to the SEC and successful civil resolution.
• Successfully defended traders in a CME market regulation action charging non-competitive trading.
• Representation of a mutual fund sponsor in connection with market timing investigations by market regulators.
• Defeated multi-million dollar claims in CFTC reparations actions alleging improper margin calls and forced liquidations.
• Secured acquittal for a floor trader on federal criminal charges arising from alleged fraudulent execution of trades.
• Representation of a financial services company against Investment Company Act claims and derivative claims alleging breach of fiduciary duty and transactions with affiliates.
• Obtained $100 million-plus recovery for an investment bank in a dispute with major financial institutions involving credit default swaps on CDOs.
• Obtained an injunction and monetary damages for a high-frequency trading firm in litigation involving theft of trade secrets and breach of non-competition covenants.
• Representation of a hedge fund in In re Mutual Fund Trading Investigation, several mutual fund market-timing investigations by various SEC regional offices and the N.Y. Attorney General.
• Representation of investors in an SEC case related to a broker’s misappropriation of client funds and dissemination of false account statements.
• Defended 16 floor traders in a CFTC enforcement action charging conspiracy and prearranged trading.
• Defeated claims against option traders in CBOT arbitration initiated by a clearing firm asserting that traders had aided and abetted a rogue trader, causing the firm to suffer an 8-figure loss.
• Represented pit brokers in CME arbitration brought by institutional customers claiming market manipulation.
• Representation of a brokerage firm and individual brokers in connection with an investigation into sales practices and participation in initial public offerings.
• Representation of a major financial services company in a derivative action alleging excessive advisor fees and misleading proxy solicitations.  We obtained a dismissal, and the Seventh Circuit affirmed on different grounds.  The Supreme Court reversed and remanded, and the Seventh Circuit then affirmed the dismissal on the ground originally asserted by us.
• Members of the firm serve as arbitrators in trading disputes and other arbitrations before FINRA, NFA, CME, CBOT and American Arbitration Association.

Transactional Matters

• Advise clients regarding derivatives-related provisions of the Dodd-Frank Act, including swaps regulation, clearing and default issues.
• Represented a trading firm in establishing an overseas office, developing and utilizing high speed data networks, exchange listing agreements and other matters.
• Advise clients in connection with fund formations, including registration and exemption issues.
• Counsel high-frequency trading firms on trading technology, corporate structuring, trade secret, compensation, employee covenant and compliance issues.
• Represented a derivatives trading firm in a successful spin-off from its parent company. 
• Served as primary outside counsel to the Chicago Board of Trade and represented the exchange in connection with its demutualization and initial public offering.
• Provide securities, mergers and acquisitions, general corporate and corporate governance counseling to CBOE Holdings and its exchange subsidiaries. 
• Advised proprietary traders in connection with moves to new trading firms and disputed rights to commodity trading software and strategies developed by traders.
• Counsel clients regarding a variety of OTC derivatives matters, including ISDA master agreements and credit support annexes, master power purchase agreements and related gas and power annexes.

Bankruptcy and Insolvency

• Represent CME Group Inc. in the MF Global Inc. bankruptcy, include advice concerning organization and implementation of the first-ever bankruptcy transfer of undermargined commodity positions and related customer collateral to other commodity brokers.
• Represent Frederick Grede, the trustee of special purpose FCM and investment advisor Sentinel Management Group, including confirmation of a contested plan of liquidation and pursuit of claims in federal courts against the company’s insiders, auditors and securities brokers which sold Sentinel allegedly unsuitable investments.  The firm litigated novel customer property claims on behalf of the trustee against Sentinel’s lender, and also prevailed in several high-profile customer priority disputes.
• Represent the National Futures Association,thedesignated self-regulatory organization for Peregrine Financial Group.  Peregrine commenced a commodity broker bankruptcy proceeding following the discovery that its founder had misappropriated more than $200 million in customer funds. 
• Represented the Chapter 7 bankruptcy trustee for Refco, LLC, acting as his special counsel for all commodities matters, including the bankruptcy sale of Refco’s FCM business and the seamless transfer of accounts and more than $3 billion in customer assets.  Refco was the first successful going concern sale of a commodity broker under the Bankruptcy Code.
• Represented the bankruptcy trustee for Griffin Trading Company in litigation arising out of Griffin Trading’s failure.  We secured a bankruptcy court judgment against the commodity broker’s owners, who the court found breached their fiduciary duties owed to customers when they used segregated assets to meet a margin call.  The Seventh Circuit Court of Appeals ultimately upheld the judgment we secured for the trustee.
• A member of the firm served as Chapter 7 trustee of Stotler and Company.  The firm litigated numerous matters of first impression in Stotler’s case, including putative customer priority claims brought by a special master appointed to represent the interests of defrauded investors in commodity pools managed by an affiliate, and Oxford Organisation, Ltd. v. Peterson, a leading decision on constructive trusts in commodity broker cases.