New York

On June 24, 2024, the U.S. Court of Appeals for the Second Circuit decided Packer ex rel. 1-800-Flowers.com, Inc. v. Raging Capital Management, LLC, reversing a district court decision that had held that a shareholder plaintiff bringing short-swing profits claims under Section 16(b) of the Securities Exchange Act of 1934 did not have constitutional standing as a result of the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez.^[1]

In the year since the Packer district court decision was issued, a consensus of other district courts had come out the opposite way and concluded that TransUnion did not abrogate Second Circuit precedent on the requirements for Article III standing in the Section 16(b) context. The U.S. Securities and Exchange Commission (“SEC”) appeared as an amicus curiae in the Packer appeal to argue that affirming the Packer district court “would eviscerate Section 16(b)” because “few, if any plaintiffs, would be able to demonstrate standing, contrary to Congress’s intent to create a broad cause of action.”^[2]

The Second Circuit’s reversal settles uncertainty in Section 16(b) cases that had emerged since the initial Packer decision and gives Section 16(b) plaintiffs the green light to pursue claims (at least in the Second Circuit) unless and until the Supreme Court takes up the question.

Section 16(b) Short-Swing Liability

Congress enacted Section 16(b) in 1934 in response to widespread concern that insiders who “may have [had] access to information about their corporations not available to the rest of the investing public” were able to move quickly in and out of that corporation’s securities and “reap profits at the expense of less well informed investors.”^[3]

Once enacted, Section 16(b) created a pathway to require statutory insiders to disgorge the profits they made from short-swing trading. The statute defines insiders as officers, directors and 10% beneficial owners of the corporation.^[4] And it defines short-swing trading as the purchase and sale of securities of the corporation at issue when such purchase and sale were made within a six-month period.^[5]

One feature of Section 16(b) is particularly relevant here: Section 16(b) does not confer enforcement authority on the SEC but instead “recruits the issuer” or “its security holders” as its “policemen.”^[6] Specifically, Section 16(b) permits two types of plaintiffs to pursue relief: (1) the issuer of the security that was traded and (2) a shareholder of that issuer, but only in the event that the issuer fails or refuses to bring the suit within 60 days of a request by that shareholder.^[7] Permitting a shareholder plaintiff to bring a Section 16(b) claim in these circumstances recognizes that a company may be conflicted in pursuing claims against its own insiders.

Article III Standing in Section 16(b) Actions

Article III of the Constitution limits federal courts to the adjudication of “cases” and “controversies.” To meet the Article III requirement of a case or controversy, a plaintiff must demonstrate standing by showing “(i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.”^[8] The first requirement of Article III standing—concrete injury-in-fact—ensures that “a litigant [has] a direct stake in the controversy and prevents the [federal] judicial process from becoming no more than a vehicle for the vindication of the value interests of concerned bystanders.”^[9]

Congress conferred exclusive jurisdiction on the federal courts to hear Section 16(b) claims.^[10] Accordingly, if a federal court holds that a Section 16(b) plaintiff does not have Article III standing for failure to show an injury-in-fact (or otherwise), that plaintiff could not then bring the same claim in state court.

          A. Second Circuit Law Under Bulldog

The Second Circuit’s leading case on assessing Article III standing and its injury-in-fact requirement for Section 16(b) claims—which predates the Supreme Court’s TransUnion decision—had been Donoghue v. Bulldog Investors General Partnership.^[11]

The Second Circuit in Bulldog affirmed a judgment in favor of the shareholder plaintiff, rejecting the defendants’ argument that the plaintiff could not demonstrate any injury to the issuer resulting from that trading.^[12] Bulldog explained that Section 16(b)

confer[s] on securities issuers a legal right, one that makes 10% beneficial owners constructive trustees of the corporation with a fiduciary duty not to engage in short-swing trading of the issuer’s stock …. It is the invasion of this legal right, without regard to whether the trading was based on inside information, that causes an issuer injury in fact and that compels our recognition of plaintiff’s standing to pursue a § 16(b) claim here.^[13]

Bulldog acknowledged that “[w]hile this particular legal right might not have existed but for the enactment of § 16(b), Congress’s legislative authority to broaden the injuries that can support constitutional standing is beyond dispute.”^[14] With this in mind, the Second Circuit drew upon an analogy developed by Judge Learned Hand in a 1951 Second Circuit decision between the harm redressed by Section 16(b) and that redressed by the claim of breach of trusts at common law:

Judge Hand observed that “[n]obody is obliged to become a director, an officer, or a ‘beneficial owner’; just as nobody is obliged to become the trustee of a private trust; but, as soon as he does so, he accepts whatever are the limitations, obligations and conditions attached to the position, and any default in fulfilling them is as much a ‘violation’ of law as though it were attended by the sanction of imprisonment.”

Thus, pursuant to § 16(b), when a stock purchaser chooses to acquire a 10% beneficial ownership stake in an issuer, he becomes a corporate insider and thereby accepts “the limitation[]” that attaches to his fiduciary status: not to engage in any short-swing trading in the issuer’s stock. At that point, injury depends not on whether the § 16(b) fiduciary traded on inside information but on whether he traded at all.^[15]

          B. The TransUnion Decision

In 2021, TransUnion expanded on prior Supreme Court precedent that had rejected the theory that Article III standing automatically exists where a statute provides for the plaintiff’s standing. As the Supreme Court explained, “we cannot treat an injury as ‘concrete’ for Article III purposes based only on Congress’s say-so.”^[16] Congress may “‘elevate’ harms that ‘exist’ in the real world before Congress recognized them to actionable legal status, [but] it may not simply enact an injury into existence.”^[17]

Under TransUnion (and certain of its predecessor decisions), federal courts have an independent obligation to decide whether a plaintiff has suffered a concrete harm under Article III even if that plaintiff has statutory standing to sue. ^[18] What that inquiry requires depends on the type of harm at issue. “[T]raditional tangible harms,” such as when “a defendant has caused physical or monetary injury to the plaintiff”—will “readily qualify.”^[19] On the other hand, TransUnion explained, “[v]arious intangible harms can also be concrete. Chief among them are injuries with a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts. Those include, for example, reputational harms, disclosure of private information, and intrusion upon seclusion.”^[20]

The Supreme Court’s application of this principle to the allegations of intangible harm in TransUnion is illustrative: The plaintiffs had brought a class action under the Fair Credit Reporting Act, with some plaintiffs asserting that misleading versions of their credit reports were provided to third-party businesses and others asserting that their credit files contained misleading alerts that were not disseminated to any third parties.^[21] The Court held that the first category of plaintiffs, those whose misleading reports were disclosed, had Article III standing because they alleged a concrete injury analogous to the harm associated with the tort of defamation.^[22] The second category of plaintiffs, whose credit files were not disseminated to third parties, lacked Article III standing because their claims based on the “retention of information lawfully obtained, without further disclosure” were not analogous to traditional harms.^[23]

          C. The District Court’s Decision in Packer

The complaint in Packer alleges that the defendants were 10% beneficial owners of a class of 1-800-Flowers.com, Inc. (“1-800-Flowers”) common stock and that they made both purchases and sales of 1-800-Flowers within a six-month period. ^[24] Packer, another holder of 1-800-Flowers common stock, brought suit on behalf 1-800-Flowers seeking disgorgement of the short-swing profits.^[25]

The district court in Packer held that Bulldog did not survive TransUnion, reasoning that

the notion in Bulldog that a violation of Section 16(b) alone sufficiently confers Article III standing upon the issuing corporation or derivative shareholder without more, cannot co-exist with TransUnion’s pronouncement that a statutory violation and a cause of action alone are insufficient to support Article III standing without a showing of concrete harm to the plaintiff. In that respect, Bulldog cannot be squared with TransUnion and TransUnion controls.^[26]

The district court acknowledged that for “intangible harms,” the “bedrock of the concrete injury inquiry is whether the alleged injury has a close relationship to a harm ‘traditionally’ recognized as providing a basis for a lawsuit in American court.”^[27]

As to Packer’s claim, the court concluded that because Packer failed “to point to or articulate any actual reputational harm” or other “actual injury allegations” accruing to 1-800-Flowers, Packer lacked Article III standing under TransUnion.^[28]

The Second Circuit’s Decision in Packer

Packer appealed the district court decision. In addition to the parties’ briefs, the SEC filed an amicus brief in support of plaintiff’s position that standing exists. The Second Circuit heard argument on May 6, 2024, and defendants-appellees conceded at the argument that they would necessarily lose if TransUnion did not abrogate Bulldog.

The Second Circuit issued its decision reversing the district court on June 24, 2024. The Second Circuit identified “several errors” with the district court’s decision.^[29]

First, the Second Circuit held TransUnion did not abrogate Bulldog because Bulldog’s analysis of the harm in Section 16(b) cases correctly identified, as TransUnion and its predecessors required, “‘a close historical or common-law analogue for the[] asserted injury’ to support constitutional standing.”^[30] As the Second Circuit explained:

Just as a common-law fiduciary who deals with the trust estate for his own personal profit must account to the beneficiary for all the gain which he has made, a statutory fiduciary who engages in short-swing trading owes its gains to the corporation under Section 16(b). The deprivation of these profits inflicts an injury sufficiently concrete to confer constitutional standing.^[31]

Second, although both the Second Circuit and district court acknowledged that plaintiff Packer did “not base his standing argument on a risk of harm,”^[32] the district court suggested that “some courts have framed the concrete harm associated with a Section 16(b) violation as grounded in the risk of harm,” which, in its view, was insufficient under TransUnion.^[33] The Second Circuit dispelled any notion that Section 16(b) standing was dependent on a risk of harm theory, explaining that the “concrete injury that confers standing on Packer is, as we recognized in [Bulldog], ‘the breach by a statutory insider of a fiduciary duty owed to the issuer not to engage in and profit from any short-swing trading of its stock.’”^[34]

The Second Circuit noted that defendants-appellees’ remaining arguments attacked Bulldog itself, which the Circuit was bound to follow unless vacated en banc or by the Supreme Court. It nonetheless addressed a few of those arguments, including the argument that the defendants-appellees in the Packer case specifically could not be fiduciaries “because they did not exercise control over [the issuer], sit on its board of directors, or trade on inside information.”^[35] The Second Circuit in Packer embraced Bulldog’s response to this argument: While Section 16(b) may have been enacted to combat trading on inside information, the legal right enacted to remedy that wrong—imposing a fiduciary duty on 10% shareholders, irrespective of their actual access to information, to eschew any short swing trading—was broader.^[36]

Takeaways from the Second Circuit’s Packer Ruling

The Second Circuit’s ruling in Packer should not cause shockwaves among federal courts, particularly because the vast majority of courts addressing the standing issue in the year since the district court decision in Packer have held that TransUnion and Bulldog are reconcilable and that plaintiffs have constitutional standing to assert Section 16(b) claims.^[37] However, as the SEC noted, the ramifications of the potential adoption of the Packer district court’s conclusion were possibly huge because requiring a plaintiff to allege “actual reputational harm” flowing from a Section 16(b) breach (as the district court in Packer had) “would undercut Congress’s purpose by making actions to recover short-swing profits almost impossible.”^[38]

For Section 16(b) plaintiffs, the Second Circuit will remain a popular venue to file their claims, as they will be assured of getting past the standing question (absent an en banc hearing or Supreme Court intervention) and venue is often present as a result of listing on a New York-based exchange. For Section 16(b) defendants, while the standing argument will not work in the Second Circuit (again, absent en banc or Supreme Court intervention), the remaining toolkit for the procedural and merits-based defense against Section 16(b) claims is otherwise unchanged.

Endnotes:

[1] Packer ex rel. 1-800-Flowers.Com, Inc. v. Raging Cap. Mgmt., LLC, No. 23-367, --- F.4th ----, 2024 WL 3092561 (2d Cir. June 24, 2024) (“Packer Appellate Decision”) (citing TransUnion LLC v. Ramirez, 594 U.S. 413 (2021)).

[2] Br. of the SEC, Amicus Curiae, in Supp. of Pl.-Appellant at 9, Packer ex rel. 1-800 Flowers.com, Inc. v. Raging Cap. Mgmt., LLC, No. 23-367 (2d. Cir. filed June 29, 2023) (ECF No. 50) (“SEC Amicus Br.”).

[3] Foremost-McKesson, Inc. v. Provident Sec. Co., 423 U.S. 232, 243 (1976); see also Kern Cnty. Land Co. v. Occidental Petroleum Corp., 411 U.S. 582, 608 (1973) (“The congressional investigations that led to the enactment of the Securities Exchange Act revealed widespread use of confidential information by corporate insiders to gain an unfair advantage in trading their corporations’ securities.”).

[4] 15 U.S.C. § 78p(b).

[5] Id.

[6] Donoghue v. Bulldog Invs. Gen. P’ship, 696 F.3d 170, 174 (2d Cir. 2012) (citing 15 U.S.C. § 78p(b)).

[7] 15 U.S.C. § 78p(b).

[8] TransUnion, 594 U.S. at 423.

[9] United States v. Students Challenging Regul. Agency Procs. (SCRAP), 412 U.S. 669, 687 (1973).

[10] 15 U.S.C. § 78aa(a).

[11] 696 F.3d 170 (2d Cir. 2012).

[12] Id. at 172.

[13] Id. at 179 (cleaned up).

[14] Id.

[15] Id. at 177 (quoting Gratz v. Claughton, 187 F.2d 46, 49 (2d Cir. 1951)) (emphasis and alterations in original).

[16] TransUnion, 594 U.S. at 426 (internal citation omitted).

[17] Id. (internal citation omitted).

[18] Id.

[19] Id. at 425.

[20] Id. (internal citations omitted).

[21] Id. at 432–34.

[22] Id. at 432–33.

[23] Id. at 433–39.

[24] Packer District Court Decision, 661 F. Supp. 3d at 8.

[25] Id. at 8 & 13 n.10

[26] Id. at 17 (emphasis in original).

[27] Id. at 10.

[28] Id. at 14.

[29] Packer Appellate Decision, 2024 WL 3092561, at *4-7. In addition to its substantive analysis, the Second Circuit held that it was error for the district court in Packer to “preemptively declar[e] that our caselaw has been abrogated by intervening Supreme Court decisions,” rather than follow binding precedent until it has been overturned, except in “rare case[s]” unlike the one at hand. Id. at *4-5 & n.36. The Second Circuit further noted that TransUnion’s requirement of a concrete injury for constitutional standing even in the context of a statutory violation derived from an earlier Supreme Court decision, Spokeo Inc. v. Robins, 578 U.S. 330, 340-41 (2016), and that the Second Circuit had already reaffirmed Bulldog after Spokeo, in Klein v. Qlik Technologies, Inc., 906 F.3d 215, 220 (2d Cir. 2018). Packer Appellate Decision, 2024 WL 3092561, at *5.

[30] Id. at *5 (quoting TransUnion, 594 U.S. at 424) (alteration in original).

[31] Id. (internal quotations and citations omitted).

[32] Id. at *6; Packer District Court Decision, 661 F. Supp. 3d at 15 n.13.

[33] Packer District Court Decision, 661 F. Supp. 3d at 13.

[34] Packer Appellate Decision, 2024 WL 3092561, at *6.

[35] Id. at *6 n.55.

[36] Id. The Second Circuit also noted that TransUnion did not require that the statutory right “exact[ly] duplicate” its common-law analogue, so this broadening was not improper. Id. (quoting TransUnion, 594 U.S. at 433).

[37] See, e.g., Roth v. Armistice Cap., LLC, No. 1:20-CV-08872 (JLR), 2024 WL 1313817, at *10 (S.D.N.Y. Mar. 27, 2024) (Rochon, J.) (holding that plaintiff has standing because “breach of trust, by itself, is a concrete intangible injury”); Augenbaum v. Anson Invs. Master Fund LP, No. 22-CV-249 (AS), 2024 WL 263208, at *4 (S.D.N.Y. Jan. 24, 2024) (Subramanian, J.) (holding that Section 16(b) violations “are breaches of trust, which satisfies TransUnion’s search for a traditional injury” (cleaned up)); Microbot Med., Inc. v. Mona, No. 19-CV-3782 (GBD)(RWL), 2024 WL 564176, at *6 (S.D.N.Y. Jan. 30, 2024) (Lehrburger, M.J.) (“Microbot incurs a concrete injury while deprived of the constructive trust’s holdings. Microbot therefore has Article III standing.”), report and recommendation adopted, No. 19-CV-3782 (GBD)(RWL), 2024 WL 964594 (S.D.N.Y. Mar. 5, 2024) (Daniels, J.) (“Because Bulldog determined that § 16(b) plaintiffs suffer concrete harm analogous to the common law injury of breach of trust, Bulldog is compatible with TransUnion’s requirement that a plaintiff has suffered a harm with “a close historical or common-law analogue.” (cleaned up)); Avalon Holdings Corp. v. Gentile, No. 18-CV-7291 (DLC), 2023 WL 4744072, at *6 (S.D.N.Y. July 25, 2023) (Cote, J.) (“[T]he Second Circuit in Bulldog analyzed the harm suffered by a § 16(b) plaintiff and reasoned that it was akin to the common law injury of breach of trust arising from the 10% beneficial owner’s fiduciary duty to the issuer.”); Safe & Green Holdings Corp. v. Shaw, No. 23-CV-2244 (DLC), 2023 WL 5509319, at *2 (S.D.N.Y. Aug. 25, 2023) (Cote, J.) (incorporating Avalon); Revive Investing LLC v. Armistice Cap. Master Fund, Ltd., No. 20-CV-02849 (CMA)(SKC), 2023 WL 5333768, at *8 (D. Colo. Aug. 18, 2023) (“The Court finds that a harm suffered by a Section 16(b) plaintiff is analogous to the common law injury of breach of trust.”).

One decision, Avalon Holdings Corp. v. Gentile, noted that the plaintiff’s “pleadings describe dramatic fluctuations in stock prices caused by the defendants’ trading and illegally obtained profits accruing to the defendants in the millions of dollars,” which established “the concrete harm that Congress elevated to a legally cognizable injury.” 2023 WL 4744072, at *6.

We identified only one decision that followed the Packer district court and concluded that a Section 16(b) plaintiff had no standing. Forte Biosciences, Inc. v. Camac Fund, LP, No. 3:23-CV-2399-N, 2024 WL 2946584, at *3 (N.D. Tex. June 11, 2024). This decision from outside of the Second Circuit (where Bulldog is not binding) did not contain any reasoning, stating only that “Forte does not plead any injury to itself from the alleged section 16(b) violation.” Id. (citing the Packer District Court Decision and TransUnion).

[38] SEC Amicus Br. at 25.

The rumors of the death of price discrimination enforcement may have been greatly exaggerated. The Robinson-Patman Act (“RPA”) (15 U.S.C. §13), enacted in 1936, prohibits price discrimination by producers and resellers of goods between similarly situated purchasers. Government enforcement of the RPA has been infrequent during the last half-century, and non-existent since 2000. In 2007, the Antitrust Modernization Commission, a bipartisan group established by Congress to review federal antitrust laws, recommended repeal of the RPA, concluding that it disincentivized discounting and thereby harmed consumer welfare.

RPA enforcement, however, seems to be making a comeback. Antitrust enforcement under the Biden Administration has largely rejected the “consumer welfare standard”—which equates competition with harm to consumers, typically in the form of increased prices—in favor of a broader focus on excessive consolidation of private power and its longer-term economic implications. The RPA, enacted to protect smaller retailers from a competitive advantage that benefited chain stores and other larger competitors able to obtain lower wholesale prices, is consistent with this approach.

Recent press reports suggest the Federal Trade Commission (FTC) may be on the verge of an RPA enforcement action. These reports follow public statements by both FTC Chair Lina Khan and Commissioner Alvaro Bedoya emphasizing the RPA and indications that the FTC has opened at least two RPA investigations under Khan’s leadership. In March 2024, a group of 16 lawmakers, including some of the most prominent supporters of the Biden Administration’s enforcement agenda, urged the FTC to “revive enforcement” of the RPA in connection with consolidation and high prices in the food industry.

Moreover, the RPA remains enforceable through private actions. While such actions have been rare, and successful actions even more so, a federal court in California last month affirmed a jury verdict in favor of wholesalers of eye drops against distributors who were found to have sold the drops to Costco and Sam’s Club at a lower price than the plaintiffs received. In addition to the jury’s damages award, the court granted injunctive relief. L.A. Int’l Corp. v. Prestige Brands Holdings, Inc., 2024 WL 2272384 (C.D. Cal. May 20, 2024). Revived agency enforcement would likely lead to an increase in private actions as well.

Accordingly, businesses that sell and purchase goods should be familiar with the key provisions of the RPA:

• The RPA prohibits discrimination in price between at least two consummated sales to different purchasers. Mere offers to sell at a particular price or refusals to sell at all to a particular purchaser do not trigger RPA liability. Moreover, the RPA is limited to “commodities,” i.e., tangible goods sold for use, consumption, or resale within the United States. Services are excluded from the RPA’s ambit.
• The two sales must be reasonably contemporaneous, and the goods involved must be of “like grade and quality.”
• At least one of the sales must be in interstate commerce, i.e., across state lines.
• Prohibited discrimination includes the furnishing of services or facilities in connection with the sale of the commodity; any such services or facilities must be made available to all purchasers on proportionally equal terms. If a seller compensates its customer for services or facilities furnished in connection with the sale, such as marketing or promotion, it must make those payments available on proportionally equal terms to other purchasers that compete to distribute the same product.
• However, the RPA does not prohibit price differentials that merely allow for the differing methods or quantities in which the goods are sold or delivered to the respective purchasers or that result from a response to changing conditions affecting the saleability of goods (such as deterioration of perishable goods or obsolescence of seasonal goods).
• And there is no actionable price discrimination if the lower price was functionally available to the disfavored purchaser, provided that the disfavored purchaser was aware of the availability of the lower price and that such availability was not merely theoretical. For example, a volume-based discount might be facially available to all customers, but if the requisite volume threshold is higher than certain purchasers can realistically meet, it may not be considered functionally available to all purchasers.
• Unlike other antitrust statutes, the RPA does not require a showing of marketwide injury to competition. Rather, it is sufficient to show that the discrimination harmed a company’s ability to compete with the grantor of the discriminatory price, any person who knowingly received the benefit of the discriminatory price, or with customers of either. While the competitive injury ordinarily will occur at the buyer’s level, the RPA also permits claims for harm to competition between sellers, between customers of the favored and disfavored purchasers, or between customers even further downstream.
• A seller who is alleged to have discriminated in violation of the RPA may establish, as an affirmative defense, that it granted a lower price to the favored purchaser in order to meet (but not beat) the price of a competitor.
• Liability is not limited to sellers; the RPA also imposes liability on purchasers who knowingly induce or receive a favorably discriminatory price.
• A standalone provision of the RPA prohibits parties to a sale from granting or receiving any compensation, or any allowance or discount in lieu of compensation, except for services rendered.

The RPA is an oft-overlooked component of antitrust compliance, largely due to its infrequent enforcement. However, every company’s antitrust compliance program should include a review of its relationships with customers and suppliers to ensure that its pricing plans and pricing decisions comply with the RPA and that the reasons for any deviations from price, such as meeting competition, are well documented.

The Legal 500 United States 2024 edition has recognized Cohen & Gresser’s New York and Washington, D.C. offices for excellence across multiple categories, including Antitrust Litigation, Corporate Investigations and White-Collar Crime, Commercial Litigation, and Securities Litigation. Testimonials included in the guide praise the firm for being a “litigation powerhouse” and for its “devotion to the needs of the clients, its creativity, and its perseverance.”

Mark Cohen is once again recognized as a Leading Partner in both Securities Litigation and Corporate Investigations & White-Collar Crime: Advice to Individuals.

The 2024 guide also recognizes Lawrence T. Gresser, Jonathan Abernethy, Jason Brown, S. Gale Dick, Christian Everdell, Jeffrey Lang, Alisa Lu, Melissa Maxman, Douglas Pepe, John Roberti, Daniel Tabak, and Ronald Wick as recommended lawyers.

This 17th edition of The Legal 500 United States guide, which identifies the “true superstars of the profession,” involved a detailed assessment of various factors, including work conducted by law firms over the past 12 months and historically; experience and depth of teams; and client feedback.

Founded in 2002, Cohen & Gresser’s New York office serves as the firm’s headquarters. Our New York attorneys are particularly strong in complex litigation, investigations, and transactions. The firm’s Washington, D.C. office handles a range of commercial litigation and regulatory enforcement actions, with a focus on domestic and foreign antitrust issues.

Best Lawyers in America recognized 14 Cohen & Gresser lawyers in its newly-published 2024 guide. The publication—now in its 30^th edition—evaluates and selects lawyers based entirely on peer review. The survey process is “designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area.”

Six C&G attorneys are recognized by their peers as “Best Lawyers” in their practice areas:

• Mark S. Cohen – Criminal Defense: White-Collar
• Lawrence T. Gresser – Commercial Litigation
• Jonathan S. Abernethy – Criminal Defense: White-Collar
• Colin Bridge – Criminal Defense: White-Collar
• Jason A. Brown – Criminal Defense: White-Collar
• Mark Spatz – Product Liability Litigation - Defendants

Eight attorneys are recognized as “Best Lawyers: Ones to Watch” in their practice areas:

• Luke Appling – Commercial Litigation and Litigation - Securities
• Sharon L. Barbour – Commercial Litigation and Criminal Defense: White-Collar
• William E. Kalema – Criminal Defense: White-Collar
• Phoebe King – Criminal Defense: White-Collar
• Barbara K. Luse – Commercial Litigation and Corporate Law
• Alexandra K. Theobald – Commercial Litigation and Corporate Law
• Eszter Vincze – Commercial Litigation and Criminal Defense: White-Collar
• Benjamin Zhu – Criminal Defense: White-Collar

Jonathan Abernethy will speak on a panel at the International Bar Association’s 26th Annual Transnational Crime Conference in Milan.

The panel is titled “Rights of the Defendant: Pre-trial Detention and Other Issues.” It will discuss the legal requirements for detention pre-trial, alternatives to pre-trial detention, practical problems faced by lawyers representing defendants in custody, and conditions of confinement for detainees.

In recent public comments, Deputy Attorney General Lisa Monaco has highlighted AI's emerging threat and declared it a top enforcement priority. The DOJ plans to target crimes “made significantly more dangerous” by AI misuse, with Monaco stating that federal prosecutors will pursue harsher sentences for defendants in such cases, akin to those seen in firearms-related offenses. As Christian Everdell and Marvin Lowenthal write in an article published in the New York Law Journal, this shift is expected to lead to a wave of indictments for AI-powered crimes, with prosecutors aiming for stringent penalties. However, uncertainties remain regarding the adequacy of existing statutes and Sentencing Guidelines enhancements for achieving the desired sentencing increases.

International law firm Cohen & Gresser announced today that Allon Lifshitz, former Deputy Chief of the EDNY Criminal Division, will join the firm as a partner in its New York office. Allon brings over 20 years of experience to the firm, where his practice will focus on white-collar criminal and antitrust cases, as well as government investigations, internal investigations, and complex civil litigation.

Prior to joining Cohen & Gresser, Allon was a federal prosecutor for 14 years in the U.S. Attorney’s Office for the Eastern District of New York. As Deputy Chief, he oversaw more than 100 AUSAs across the Criminal Division’s nine sections. Previously, he served as Chief of the Organized Crime & Gangs Section. As an Assistant U.S. Attorney, Allon prosecuted cases involving a variety of crimes, including foreign bribery, health care fraud, racketeering, securities fraud, money laundering, wire fraud, national security offenses, and public corruption offenses.

“I couldn’t be more excited to join Cohen & Gresser. I have admired the firm for a long time and have been consistently impressed with its growth and success,” said Allon. “The white-collar practice is outstanding, and I look forward to leveraging my experience investigating cross-border white-collar crime, negotiating corporate resolutions, and taking complex cases to trial. I also look forward to applying my experience to the firm’s excellent work in antitrust and civil litigation.”

“Allon is a skilled litigator with proven results. His extensive experience as a federal prosecutor adds new depth and capabilities to the firm’s white-collar, antitrust, and litigation and arbitration practices,” said Lawrence T. Gresser, co-founder and global managing partner of Cohen & Gresser. “On behalf of everyone at the firm, I’m delighted to welcome Allon to the team.”

Before joining the U.S. Attorney’s Office, Allon served as a law clerk to the Honorable Nicholas G. Garaufis, U.S. District Judge for the Eastern District of New York, and as a litigation associate at Paul, Weiss, Rifkind, Wharton & Garrison. Allon earned his law degree from Harvard Law School.

Allon is a member of the Federal Bar Council’s Federal Criminal Practice Committee and the American Bar Association’s Antitrust Law and Criminal Justice Sections. He currently serves as Chair of the Constitution & Rules Committee of the United States Tennis Association. He was previously a Lecturer in Law at Columbia Law School.

Read New York Law Journal's coverage here.

Cohen & Gresser is pleased to announce that Shannon Daugherty, Pauline Koch, Marvin Lowenthal, and Pierre Wolman have been promoted to counsel.

"Congratulations to these talented lawyers on their well-deserved promotions," said Lawrence T. Gresser, the firm’s managing partner. “Shannon, Pauline, Marvin, and Pierre each demonstrate extraordinary commitment to client service and embody our firm's core values of excellence, integrity, and respect. We recognize their outstanding accomplishments and positive impact, and look forward to their continued success at Cohen & Gresser.”

Shannon Daugherty – Counsel, New York

Shannon Daugherty practices complex commercial litigation and criminal and regulatory defense. Shannon advises clients across a broad array of industries on a wide range of disputes, including contract, civil RICO, bankruptcy, and tax matters. She also maintains an active pro bono practice. She has been recognized by Super Lawyers as a Rising Star for business litigation.

Pauline Koch – Counsel, Paris

Pauline Koch practices corporate transactions, compliance, and mergers and acquisitions. Pauline holds a Master’s degree (JD equivalent) in English and North American Business Law, as well as a Master’s degree in International Law from the University of Paris I Panthéon Sorbonne. She received her Bachelor of Laws from the University of Strasbourg and her LL.M. from UCLA School of Law. Pauline is admitted to practice in France and California.

Marvin Lowenthal – Counsel, New York

Marvin Lowenthal practices white collar defense, general commercial and securities litigation, and privacy and cybersecurity. He is a Certified Information Privacy Professional (CIPP) in the United States. Super Lawyers has recognized Marvin as a Rising Star each year since 2018.

Pierre Wolman – Counsel, Paris

Pierre Wolman’s practice encompasses advice and litigation on corporate and M&A transactions both for publicly listed and private companies as well as on a wide range of regulatory and compliance issues. He holds a Masters II Degree in business law and taxation from the University Paris II Panthéon – Assas and a Master in Financial Regulation and Risk Management from Sciences Po Paris. He also holds a Bachelor of Civil Law from University College Dublin, Ireland. Pierre is admitted to practice in France.

For the fifth consecutive year, international law firm Cohen & Gresser has been ranked in Global Investigations Review’s GIR 100 as one of the top law firms for cross-border investigations.

The GIR 100, a guide to the world’s best firms for investigations, recognized C&G for its work on behalf of high-profile individuals and companies and its strong network of prominent lawyers in key jurisdictions around the globe. The annual guide is based on submissions from law firms and extensive independent research, and honors the top 100 firms worldwide that handle sophisticated government-led, internal, and cross-border investigations.

C&G’s White Collar Defense and Regulation practice spans its New York, Washington, D.C., Paris, and London offices. The practice’s highly experienced Internal Investigations team works closely with global clients, including corporations, boards of directors, special committees, and audit committees, in connection with investigations of all sizes. The team’s work has ranged from discrete investigations in response to an anonymous employee complaint to wide-ranging investigations conducted against the backdrop of ongoing litigation and/or regulatory and criminal investigations.