Harry S. Davis focuses his practice on complex commercial litigation and regulatory matters for financial services industry clients, including hedge funds, funds of funds and private equity funds, prime and clearing brokers, introducing brokers and interdealer brokers, and auditors and administrators. Harry has substantial experience in both securities regulatory matters and private litigation, including investigations by the Securities and Exchange Commission, U.S. Attorneys’ offices, the Department of Justice, the Commodities Futures Trading Commission, the Federal Trade Commission, state attorneys general, state securities regulators and self-regulatory organizations.
Harry has litigated numerous cases in federal and state courts throughout the United States, including his recent victory for an inter-dealer broker in an arbitration brought by one of its competitors for alleged misappropriation of trade secrets as well as in a 4-1/2 month jury trial in a raiding case, and his successful representation of a prime broker in a hotly contested and high-profile jury trial brought by the bankruptcy trustee of a failed hedge fund. Over the course of a career spanning more than 25 years, Harry has represented clients in investigations and litigations involving allegations of insider trading, market manipulation, market timing and late trading, misconduct involving PIPEs, short-swing profits, securities and common law fraud, advertising, breach of fiduciary duty, employee raiding and other employment issues, misappropriation of trade secrets and other business torts, and breach of contract, among other claims. To prevent minor issues from growing into bigger problems, he provides litigation and compliance counseling to many of the firm’s clients, and conducts internal investigations. In addition to being an expert litigator, Harry is also a prolific author and speaker. Among his many contributions, Harry is the editor of Insider Trading Law and Compliance Answer Book (published annually by the Practising Law Institute), a definitive treatise written in question and answer format and designed to help educate and protect clients from regulatory exposure. He is also the author of a chapter in Private Fund Dispute Resolution, which serves as a primer regarding U.S. and U.K. regulatory inquiries, investigations and examinations of private investment funds.
Trial counsel to interdealer broker Tullett Prebon plc in a four-month jury trial in New Jersey State Court (Hudson County) against rival BGC Partners Inc. for illegally hiring away 80 brokers and managers as part of a global raid on Tullett’s business in the Americas. Claims tried to the jury included violations of New Jersey’s racketeering statutes, unfair competition, misappropriation of trade secrets and confidential information, and tortious inference. Also represented Tullett Prebon’s U.S. subsidiaries in related FINRA arbitration (which included a 50+ day arbitration hearing). Jury trial settled in favor of Tullett Prebon for $100 million during jury deliberations, resulting in over $130 million in recovery by Tullett Prebon and its subsidiaries in these related cases.
Obtained an award in favor of interdealer broker Tullett Prebon in an AAA Arbitration alleging misappropriation of trade secrets. In doing so, successfully invalidated the contractual damages provision relied upon by rival BGC Partners in seeking approximately $2 billion in damages. Following trial, the arbitrator awarded BGC less than $1 million in damages in this “bet the company” case and found that BGC was not the prevailing party and, therefore, was not entitled to attorney’s fees despite the fact that Tullett had conceded liability. Successfully defended the arbitration award in response to a motion to vacate it in New York Supreme Court as well as on appeal to the Appellate Division, which found that the Arbitrator’s conclusion that the provision was unenforceable to be “inescapable” based upon the evidence Tullett had introduced in the arbitration hearing. BGC v. Tullett (AAA Arbitration, NY Supreme Court and Appellate Division, 1st Department). Also successfully obtained a dismissal of a parallel case brought in New York State Supreme Court based in part on the AAA decision.
Successfully represented Bear Stearns Securities Corp. in connection with a series of individual and class action lawsuits filed by shareholders and the bankruptcy trustee of Manhattan Investment Fund Ltd., a hedge fund that collapsed following disclosure that its manager concealed approximately $400 million in losses through the creation of false account statements. Defeated allegations that Bear Stearns, which had provided clearing services to the fund, aided and abetted the manager’s fraud, breached its fiduciary duty and violated fraudulent transfer laws, including winning a jury verdict for Bear Stearns. Manhattan Investment Fund, Ltd. Litigations (2nd Circuit Ct. App., S.D.N.Y., Bankr. S.D.N.Y. and N.Y. Sup. Ct.).
Obtained dismissal for London-based interdealer broker Tullett Prebon plc in all LIBOR-related litigations. These high-profile cases had alleged rate rigging, market manipulation and antitrust violations regarding U.S. dollar LIBOR as well as Yen LIBOR and Euroyen TIBOR benchmark interest rates. In the U.S. dollar LIBOR cases, the Court refused to allow plaintiffs to amend their complaint to add Tullett as a defendant, finding any amendment would be futile because Tullett would not be subject to personal jurisdiction in the case. In the Yen LIBOR and Euroyen TIBOR cases, the Court dismissed one of the cases in its entirely for lack of Article III standing on grounds that the plaintiffs did not trade financial instruments sufficiently tied to these benchmark rates, and dismissed Tullett in a second related case for lack of personal jurisdiction while allowing the case to go forward against several other defendants.
Successfully defended hedge funds involved in activist campaign in connection with claims alleging violations of Investment Company Act anti-pyramiding provisions, market manipulation, proxy fraud, participation in an undisclosed group and violation of short-swing profit rules. meVC Draper Fisher Jurvetson Fund I, Inc. v. Millennium Partners, L.P. (S.D.N.Y.).
Successfully represented domestic and offshore hedge funds in connection with PIPEs investigations by the SEC, the New York State Attorney General and other state securities regulators involving claims of insider trading, market manipulation and other purported securities law violations.
Obtained dismissal of a lawsuit against hedge funds in a novel fraudulent transfer case brought by the bankruptcy trustee of JTS Corporation arising from investments in convertible preferred stock and the subsequent conversion of that stock into common shares. Decker v. Advantage Fund, Ltd., et al. (Bankr. N.D. Cal., N.D. Cal. and 9th Circuit Ct. App.).
Successfully represented institutional investors in the takeover of the board of directors of an offshore and master fund and in gaining control over a domestic fund after disclosure by the fund manager that he had acquired concentrated positions in various life sciences companies. On behalf of the funds, negotiated with those life sciences companies to resolve disputes under Sections 13 and 16 of the Securities Exchange Act of 1934, neutralizing a highly dilutive poison pill, and obtained dismissal of a securities fraud class action filed against the funds by short sellers of the life sciences companies. Also successfully represented the funds in connection with investigations by the SEC, the U.S. Attorney's Office, the FTC and the Cayman Islands Monetary Authority, resulting in no claims being brought against the funds even though civil and criminal charges were filed against the fund manager. Durus Life Sciences Funds Litigation.
Successfully represented a consortium of investors and a securities intermediary in securing dismissal of a complaint by an insurance company contesting a $6 million life insurance policy owned by the investors. Defeated the insurance company’s allegations that the insurance policy was void as a so-called stranger-originated life insurance policy because it amounted to an illegal wagering contract, and that the owners did not have an insurable interest in the life of the insured and that the trust that was created in connection with policy was void. In a decision that was significant not only for the investors involved but for the entire life settlements industry, the U.S. District Court for the District of Utah dismissed the complaint with prejudice and rejected the insurance company’s arguments seeking to avoid payment under the policy as “meritless.”
Achieved a favorable settlement for a hedge fund in connection with an investigation by the SEC and the New York State Office of the Attorney General relating to market timing and late trading, and successful representation of another hedge fund in connection with investigations being conducted by multiple offices of the SEC, the NYAG and the U.S. Attorney's Office relating to market timing with no claims being brought against that hedge fund or its investment adviser.
Successfully represented a substantial limited partner in LJM2 Co-Investment, LP in connection with removal of a general partner, including litigation confirming the removal, related SEC and Congressional investigations, and other litigation matters. In re Enron Corporation.
Successfully represented a corporation and certain directors in litigation alleging breach of fiduciary duty arising from sale of the company. In re Morton’s Restaurant Group Shareholders Litigation (Del. Ch. Ct. and N.Y. Sup. Ct.).
Obtained dismissals of class action lawsuits in Indiana, Michigan, North Carolina and Tennessee alleging violations by Credit Suisse First Boston Mortgage Securities Corp. of various state-law consumer protection statutes relating to second mortgage loans made to homeowners by originating lenders and subsequently securitized by CSFB.
Represented generic pharmaceutical manufacturer in connection with FTC investigation and related federal and state court civil antitrust litigation relating to competitors’ settlement of patent infringement litigation. In re Cardizem CD Antitrust Litigation.
Has conducted internal investigations and handled regulatory investigations for numerous private investment funds relating to alleged insider trading, market manipulation and compliance with securities laws.
Regularly provides securities law counseling and advice to financial services industry clients, including hedge funds, private equity funds, underwriters and broker-dealers, in connection with insider-trading issues, including SEC and FINRA investigations; questions relating to market manipulation, ethical walls, short-swing profit rules and group issues; and other securities law and regulatory issues.
Has provided antitrust counseling and advice, including the preparation of competition studies for submission to the FTC, the Antitrust Division of the Department of Justice and the Federal Reserve Board, in connection with mergers & acquisitions in the following industries: banking, commercial finance, factoring, commercial equipment finance, commodities brokerage, rental cars, paper manufacturing, automobile manufacturing and financing, subprime lending, information technology, pharmaceuticals, glass container manufacturing, oil & gas equipment sales and leasing, and travel-related businesses.
Has provided antitrust and trade practices counseling and advice in connection with the review of various business practices, including product distribution, exclusive dealing and licensing agreements, intra-enterprise conduct, interlocking directors, joint ventures and strategic alliances, and Hart-Scott-Rodino issues.
“CFTC Crackdown on Insider Trading: What You Need to Know,” HFMweek, Nov. 16, 2018 (co-author)
“CFTC Insider Trading Enforcement Efforts Increase: Implications for Private Fund Managers,” SRZ Alert, Oct. 3, 2018 (co-author); republished in The Hedge Fund Journal, November 2018
“How the New York Court of Appeals’ Limitation on Martin Act Liability Affects Fund Managers,” The Hedge Fund Law Report, July 12, 2018
“Second Circuit, in Split Decision, Overrules Limitation on Insider Trading Liability Established in U.S. v. Newman,” SRZ Alert, Aug. 28, 2017 (co-author); republished in The Hedge Fund Journal, September 2017
Insider Trading Law and Compliance Answer Book, editor; “Overview of the Law of Insider Trading,” “Materiality” and “Breach of Duty: Misappropriation Theory,” author (Practising Law Institute), 2011-2018
“Regulatory Change: 2015 Diagnosis, 2016 Prognosis — Schulte Roth & Zabel’s Leading Securities Litigation Practice,” The Hedge Fund Journal, November 2015 (profile)
“Rule 105 Update: New Round of Enforcement Highlights SEC Approach on Short-Selling Violations,” SRZ Alert, Oct. 22, 2015 (co-author); republished in The Hedge Fund Journal, November 2015
“Provisional Remedies,” Commercial Litigation in New York State Courts (Thomson Reuters and the New York County Lawyers’ Association), 4th ed., 2015 [updated through 2018]
“Competitor Lift-Outs: Protecting Your Firm in Pursuing and Avoiding Litigation for Employee Raiding,” Bloomberg BNA – Corporate Counsel Weekly, April 15, 2015 (co-author); republished in Bloomberg BNA – Daily Labor Report, April 17, 2015 and Bloomberg BNA – Daily Report for Executives, April 20, 2015
“Newman’s Aftermath: District Court Vacates Four Insider Trading Guilty Pleas; Government Seeks Rehearing in Second Circuit,” SRZ Alert, Jan. 27, 2015 (co-author); republished in The Hedge Fund Journal, February/March 2015
“Second Circuit Clarifies Insider Trading Liability of Tippees,” SRZ Alert, Dec. 15, 2014 (co-author)
“Navigating the Regulatory Landscape and Avoiding Common Missteps,” Private Fund Dispute Resolution (Private Equity International), November 2014 (co-author)
“District Court Adopts Subjective Good Faith Defense for Fraudulent Transfer Claims in SIPA Case,” Pratt’s Journal of Bankruptcy Law, July/August 2014 (co-author)
SRZ Insider Trading Developments Newsletter, Summer 2014 (contributor)
“District Court Adopts Subjective Good Faith Defense for Fraudulent Transfer Claims in SIPA Case,” SRZ Alert, May 21, 2014 (co-author)
“Do I Really Have to Pay the Penalty in My Contract?” Bloomberg BNA – Corporate Counsel Weekly, March 12, 2014 (co-author); republished in Bloomberg BNA – Alternative Investment Law Report, March 19, 2014
“Clearing Broker Liability and Responsibilities,” Broker Dealer Regulation, Chapter 24 (Practising Law Institute), 2nd ed., September 2013 [updated through 2017] (co-author)
“Keeping Current: SEC Update: Enforcement Program Taking Shape Under New Leadership,” Business Law Today, July 2013 (co-author)
“SEC Enforcement Division Increases the Pace of Rule 105 Investigations,” SRZ Alert, June 28, 2013 (co-author)
“SEC Update: Enforcement Program Taking Shape Under New Leadership,” SRZ Alert, June 24, 2013 (co-author)
“Insider Trading Developments — Summer 2012,” The Harvard Law School Forum on Corporate Governance and Financial Regulation, Oct. 8, 2012 (co-author)
SRZ Insider Trading Developments Newsletter, Summer 2012 (co-author)
“Hedge Funds in the Crosshairs: The Law of Insider Trading in an Active Enforcement Environment,” The Hedge Fund Law Report, Feb. 17, 2010
“Private Equity Groups Under Common Legal Control Constitute a Single Enterprise Under the Antitrust Laws,” NYU Journal of Law & Business, Winter 2007 (co-author)
“Buyer Beware: Consummating Non-HSR Reportable Transactions May Prove Costly in the End,” American Bar Association Antitrust Litigator, Winter 2007 (co-author)
“Crimes and Misdemeanors — How to Avoid Each When Investing in Hedge Funds,” Hedge Funds Review, 2006 (with Sahar Shirazi)
“Warding Off Uncle Sam,” Hedge Funds Review, July 2006 (with Matthew Trokenheim)
“Private Equity Groups Under Common Legal Control Constitute a Single Enterprise Under the Antitrust Laws,” NYU Journal of Law & Business, Fall 2006 (co-author)
“Uncle Sam is Watching You,” Hedge Funds Review, March 2006 (with Megan Elizabeth Zavieh)
“The Benefits and Potential Pitfalls of Cooperating with Regulatory Agencies and the Government: How to Navigate the Minefield,” The Journal of Investment Compliance, Winter 2004 (with Mary F. Alestra)
“SEC Brings First Enforcement Proceedings for Violations of Regulation FD (Fair Disclosure),” Banking & Financial Services Policy Report, May 2003
“Corporate Responsibility and Accounting Reform,” Banking & Financial Services Policy Report, November 2002 (with Megan Elizabeth Murray)
“Reviewing Amendments to Hart-Scott-Rodino,” New York Law Journal, March 8, 2001 (with Mary Morabito Rosewater)
“The Proposed Antitrust Guidelines For Competitor Collaborations,” New York Law Journal, Nov. 9, 1999 (with Todd S. Fishman)
“Antitrust Issues in the Electronic Age: Practical Considerations for Firms That Do Business on the Web,” Banking & Financial Services Policy Report, November and December 2000 (with William F. Sullivan)
“Antitrust Issues Facing B2B Ventures on the Web,” New York Law Journal, July 13, 2000
“The Proposed Antitrust Guidelines For Competitor Collaborations: Sound Guidance Or Sea Of Doubt?,” American Bar Association Antitrust Litigator, April 2000 (with Todd S. Fishman)
Quoted on securities and antitrust law issues by: The Wall Street Journal, Associated Press, Reuters, Dow Jones News Service, CBS Market Watch, NBC Nightly News, British Broadcasting Corporation World Television Service, Canadian Broadcasting Corporation Radio Canada, WABC Radio and WOR Radio
“Enforcement,” SRZ 27th Annual Private Investment Funds Seminar, New York, January 2018
“Trading Compliance,” SRZ 26th Annual Private Investment Funds Seminar, New York, January 2017
“Navigating Risks in the New Enforcement Environment,” SRZ 25th Annual Private Investment Funds Seminar, January 2016
“Insider Trading Law and Compliance: How Best to Protect Your Firm,” FEA Hedge Fund Meeting, October 2015
KPMG General Counsel Peer Exchange, October 2015
“CCOs on the Hot Seat: Limiting Liability for Compliance Officers,” FRA Investment Advisor Compliance Summit, July 2015
SRZ U.S. and U.K. Insider Trading Breakfast Briefings, March 2015
“Securities Enforcement and Related Civil Litigation,” SRZ 23rd Annual Private Investment Funds Seminar, January 2014
“Regulatory Examinations and Enforcement,” SRZ 22nd Annual Private Investment Funds Seminar, January 2013
“What Changes are Being Made to Prevent Insider Trading,” IIR GAIM Ops Cayman, Cayman Islands, April 2012
“Insider Trading Liability: Protecting Your Firm,” Institutional Investor Alpha Hedge 18th Annual Global Hedge Fund Summit, April 2012
“Insider Trading: Latest Insights,” SRZ 21st Annual Private Investment Funds Seminar, January 2012
“Current Trends in M&A, PIPEs and Co-Investment Transactions,” SRZ 21st Annual Private Investment Funds Seminar, January 2012
“Current Issues in Trading Fixed Income Securities,” SRZ Investment Management Hot Topics, October 2011
“How to Comply with Rule 105: A Workshop for Hedge Fund Managers,” SRZ Investment Management Hot Topics, May 2011
“Regulatory Panel: Hot Button Regulatory Enforcement and Compliance Issues for the Hedge Fund Industry,” IIR GAIM Ops Cayman, Cayman Islands, May 2011
“Crisis Management: Handling Government Investigations,” SRZ 20th Annual Private Investment Funds Seminar, New York, January 2011
“Hedge Funds: Tracking the Progress of Reform,” The Financial Times Global Financial Forum, New York, December 2010
“An In-Depth Look at Recent Trading Revisions and Compliance,” FRA Hedge Fund Compliance Summit, New York, November 2010
“Alternative Asset Managers in the Regulation Spotlight,” Houlihan Lokey Alternative Investing Summit, New York, May 2010
Moderator, “Regulatory Update,” Institutional Investor’s Alpha Hedge 16th Annual Global Hedge Fund Summit, Bermuda, May 2010
“Update from the SEC – Shifting the Conversation from 'Should We Be Regulated?' to 'How Will We Be Regulated?',” GAIM Ops Cayman, Grand Cayman, March 2010
“Key Insights into the New SEC Enforcement Program,” FRA Investment Advisor Compliance, New York, February 2010
“Regulatory Enforcement,” SRZ 19th Annual Private Investment Funds Seminar, New York, January 2010
“Avoiding an Investor Lawsuit,” FRA's Accounting, Auditing & Risk-Control Standards for Hedge Funds, New York, December 2009
“Insider Trading Law and the New SEC Enforcement Environment,” Deutsche Bank's Global Prime Finance Client Dinner, New York, November 2009
“Preparing for SEC Examinations of Private Fund Advisers,” SRZ Investment Management Hot Topics, New York, November 2009
“Liabilities and Responsibilities of Service Providers” and “Regulation and Transparency,” Campbells Cayman Fund Focus, Grand Cayman, October 2009
“SEC Regulatory Update,” MFA General Counsel Forum, New York, September 2009
Hedge Fund Regulatory Compliance Update Webinar, June 2009
Moderator, “Emerging Conditions of the Marketplace: A Regulator's Roundtable Discussion” and “Investment and Operational Due Diligence Considerations,” FRA's Hedge Fund Tax, Accounting and Administration Master Class, May 2009
Moderator, “The Future of Hedge Fund Regulation: Government Regulation, The President's Working Group and the UK Hedge Fund Working Group,” GAIM Ops Cayman 2009, Grand Cayman, April 2009
“Current SEC Investigations and Enforcement Actions,” SRZ 18th Annual Private Investment Funds Seminar, New York, January 2009
“Managing Fund Liquidity, “ SRZ Greenwich Private Investment Funds Seminar, September 2008
Moderator, “Regulatory Investigations: What You Should Know But Were Afraid To Ask, Part 2,” CCO University Webinar, July 2008
Moderator, “Discussion with Global Regulators” GAIM Cayman 2008, The Ritz-Carlton, Grand Cayman, April 2008
“Regulatory Issues in PIPEs,” FRA 7th Annual Industry Summit on PIPEs, New York, January 2008
“An Exclusive Look at the Profitable Investor Takeover and Workout of Durus Life Sciences,” Absolute Return Magazine Symposium, December 2007
Moderator, “Hedge Fund Implosions: Mitigating the Aftermath and Maximizing the Opportunities Afforded by these Incidents,” 2nd Annual MARHedge Cayman Islands Hedge Fund Best Practices Conference, Grand Cayman, November 2007
Moderator, “SEC Enforcement Actions,” 14th Annual MARHedge Global Hedge Fund Summit, Bermuda, October 2007
Moderator, “Brokers, Counterparties and Derivatives: Managing the Risks,” SRZ Investment Management Hot Topics Seminar, New York, September 2007
“Introduction to Hedge Funds,” Florida Office of Financial Regulation – North American Securities Administrators Association Annual Broker Dealer Training Session, Orlando, FL, June 2007
“SEC Investigations and Filings,” FRA Navigating PIPEs: Laws and Regulations, New York, May 2007
Moderator, “Spotlight on Regulators,” GAIM Cayman, Grand Cayman, May 2007
Moderator, “Life Cycle of Hypothetical Hedge Fund,” Campbell’s Cayman Fund Focus Conference, Grand Cayman, February 2007
“Enforcement and Litigation Update: What Are the Regulators Up To and Impact on Civil Litigation,” AIMA luncheon, Grand Cayman, February 2007
“Legal and Regulatory Update: Current Climate Assessment,” FRA Sixth Annual Industry Summit on PIPEs, New York, January 2007
Moderator, “Enforcement Actions: What Most Concerns the SEC” and “The Role of Independent Directors,” MARHedge, Grand Cayman, November 2006
“Why European Fund Managers Should Worry about U.S. Regulations, Investigations and Enforcement Proceedings,” Hedge Funds Review, European Hedge Fund Investment Forum, Hertfordshire, UK, October 2006
“A Look Across the Pond: Uncle Sam's Recent Enforcement Actions and Civil Litigation Update Concerning Hedge Funds,” SRZ Fifth Annual Hedge Fund Seminar, London, October 2006
- American Bar Association
- New York State Bar Association
- New York County Lawyer’s Association
- Trade Regulation Committee
- Chairman, 2003-04
- Co-Chairman, 2002-03
- Vice Chairman, 2001-02
- New York City Bar Association
- Securities Industry and Financial Markets Association
- Compliance and Legal Division
- Federal Bar Council
- Federalist Society
- The Legal 500 US
- New York State Bar Association Empire State Counsel Honoree
- New York Super Lawyers
- Associate, Cravath Swaine & Moore, 1989-1995
- Judicial Clerk, Hon. Joseph L. Tauro (D. Mass.), 1988-1989