Glickenhaus & Co. v. Household Int’l, Inc.
On May 21, 2015, Bancroft obtained a new trial for its clients in Glickenhaus Institutional Group v. Household International, Inc., 787 F.3d 408 (7th Cir. 2015), a case involving one of the largest securities class action verdicts ever recorded. This appeal arose out of a case in which investors sued Household International Group (now known as HSBC Finance Corporation) alleging that the company and its executives made misleading statements about the company’s lending practices, financial accounting, and loan quality. After more than a decade of litigation, the district court entered a final judgment ordering payment of $2.46 billion—the largest judgment following a securities class action trial at the time. On appeal, the Seventh Circuit held that plaintiffs failed to offer adequate proof of loss causation. The Seventh Circuit also held that the district court instructed the jury on what it means to “make” a false statement in violation of Rule 10b-5 in a manner irreconcilable with Supreme Court precedent. The combination of loss causation deficiencies and Janus prejudice led the Seventh Circuit to conclude that the defendants were entitled to a new trial on these issues. Paul D. Clement argued the case and D. Zachary Hudson assisted with the briefing.