Eversheds Sutherland Attorneys Secure $93 Million Victory for Commonwealth Financial Network

Partner Olga Greenberg, Senior Counsel Tom Byrne, and Associate Rebekah Whittington O’Brien successfully secured a $93M reversal issued by the United States First Circuit Court of Appeals, remanding an SEC enforcement action against Commonwealth.

The United States First Circuit Court of Appeals has vacated the grant of summary judgment and disgorgement in favor of the SEC, reversing a $93 million dollar award. The court remanded the case for further proceedings, holding that whether the alleged omissions in disclosures were material constituted a jury issue. The court explained that there were material issues of fact as to the importance of price, Commonwealth’s influence over funds, and the significance of the allegedly deficient disclosures themselves.

Additionally, the court vacated the disgorgement award, citing “concerning, fundamental legal errors” made by the district court regarding whether the SEC proved a causal relationship between Commonwealth’s profits and alleged violations.

Ms. Greenberg commented on the victory: "This decision is a significant achievement for Commonwealth and the securities industry. It highlights the importance of the materiality standard and the necessary proof of causation and damages in cases involving conflicts of interest and disclosures. We are pleased to have reached this outcome for our client and the industry."

Mr. Byrne added: "We are gratified to represent Commonwealth in this successful effort to set aside the $93.5 million judgment awarded to the SEC. In its comprehensive opinion, the First Circuit agreed with our client’s position that summary judgment was improperly entered and that there was no evidence presented that would warrant the award obtained by the SEC."

About the Commonwealth Financial Network

Commonwealth is a privately held Registered Investment Adviser–independent broker/dealer. More details here.

About Eversheds Sutherland Litigation Practice Group

One of the world’s largest Disputes practices, Eversheds Sutherland has successfully steered clients through some of the most complex and high-value lawsuits, investigations and arbitrations, and utilizes that experience to help clients reach successful outcomes.

The firm has dedicated experience across different business sectors - and deep industry knowledge. Eversheds Sutherland represents clients in disputes across a wide range of sectors, but particularly in financial services and insurance, energy, TMT, consumer and retail, infrastructure, and construction and manufacturing.