Javier Bleichmar

On July 3 and August 9, 2013, Teva Pharmaceutical Industries raised the prices of eighteen generic drugs, some by as much as 812 percent, and fifteen of the increases moved in step with a competitor’s. The investors who later sued put the profit from those two days at about $875 million. Twelve more drugs went up in April 2014, eight of them alongside competitors; twenty on July 1 and August 28, 2014; fourteen in January 2015; seven in July 2015; five, all previously raised, on April 6, 2016. Seventy-six increases on sixty drugs in under three years, forty-eight of them parallel to a rival’s, and more than $2.3 billion in profit that the company’s investors alleged came from the increases rather than from anything Teva had built or sold.

The company said otherwise. On October 30, 2014, chief executive Erez Vigodman credited “new launches this year” as significant contributors to the quarter. On December 11, 2014, Sigurdur Olafsson, who ran the global generics business, told an audience: “I have to disagree that they have experienced tremendous price increase.” Teva officials said that “there’s never a price increase on the base business as a whole” and that “Inflation never really happened in the generic business,” and in 2016, as the increases stopped, that “the pricing is stable” and “there’s no pressure on prices.” The stock went from about $48 in March 2014 to $72 on July 27, 2015, the day Teva announced a $40.5 billion purchase of Actavis; the company sold about $7.2 billion of shares and preferred stock that December and $20 billion of bonds in July 2016.

The Department of Justice served a subpoena on June 21, 2016, and the Connecticut attorney general on July 12. Teva disclosed both on August 4. On November 3, 2016, a Bloomberg report on the investigations took the stock down 9 percent. In December the Justice Department charged two executives of a competitor, Heritage, with fixing the price of glyburide, and the state attorneys general sued Teva and others over the same drug, of which, the investors alleged, Teva held three-quarters of the market. Vigodman was out in February 2017. On August 3, 2017, Teva wrote off $6.1 billion of its United States generics business; the rating agencies cut its debt to a notch above junk and the stock fell again. On May 10, 2019, forty-seven states, the District of Columbia and Puerto Rico filed a 524-page antitrust complaint against the generic industry, and in August 2020 the Antitrust Division charged Teva’s American subsidiary with a crime.

The Base Business as a Whole

Judge Stefan R. Underhill appointed the Ontario Teachers’ Pension Plan Board lead plaintiff on July 11, 2017, with Bleichmar Fonti & Auld as lead counsel. The defendants moved to dismiss. On September 25, 2019, Underhill held that “the complaint has adequately pled a price-fixing scheme,” that the company’s statements about its pricing were “misleading because they omitted information that was necessary to make the statement complete,” that “the defendants were under a regulatory duty to disclose in Item 5 the pricing trends,” and, to the argument that talk of stable pricing was mere optimism, that “Puffery, however, depends on the context of the statement.” The claims went forward against Teva, Vigodman, the chief financial officer, the chief accounting officer and Olafsson. The class ran from February 6, 2014 through May 10, 2019 and took in Teva’s American depositary shares, its preferred shares and its dollar notes.

Certification followed on March 9, 2021, over a Daubert challenge to the plaintiffs’ market-efficiency expert that the judge took in full and rejected. “In assessing market efficiency,” he wrote, “courts should not let the perfect become the enemy of the good,” and “the Plaintiffs are entitled to the Basic presumption, which the Defendants fail to rebut.” The Anchorage Police and Fire Retirement System joined Ontario Teachers’ as class representative. The Second Circuit declined to hear Teva’s appeal from the certification. Fact and expert discovery ran to completion; the firm’s lawyers logged more than 77,000 hours on the case. Hours before the deadline for summary judgment motions, Teva agreed to pay $420 million in cash, with nothing recovered yet in the criminal case or the antitrust actions over the same conduct. Underhill granted final approval on June 2, 2022, with no objection filed. It was, he said, “the most complex securities case I’ve ever had,” one that “required analysis of a very broad portfolio of drugs,” and “This was not a case that every law firm could handle, and I think it was done exceptionally well.”

Twelve Directors and 3.1 Million Options

The Police and Fire Retirement System of the City of Detroit sued Tesla’s directors in the Delaware Court of Chancery on the company’s behalf, alleging that from 2017 through 2020, as Tesla’s market value climbed, the board had paid itself far more than directors at comparable companies received, in breach of its fiduciary duties and at Tesla’s expense. The directors answered on September 17, 2020. Discovery brought twenty-three subpoenas to third parties, twenty-two depositions of fact witnesses and opening and rebuttal expert reports. On July 14, 2023, the parties agreed to settle.

Under the agreement twelve directors, Elon Musk, Kimbal Musk, Larry Ellison and James Murdoch among them, returned cash, stock and more than 3.1 million unexercised stock options, valued together at more than $735 million by the parties’ agreed method, and certain of the directors permanently gave up their compensation for 2021, 2022 and 2023, option awards worth as much as $184 million. For five years Tesla must review its non-employee directors’ pay each year with an independent compensation consultant, disclose the review and its comparative data to stockholders, put the proposed pay to a vote of stockholders unaffiliated with the defendants and the other serving directors, and review its internal controls over director compensation. Chancellor Kathaleen McCormick approved the settlement on January 8, 2025. The parties valued it at more than $919 million; every dollar went to Tesla rather than to individual stockholders, because the claims were the corporation’s. Bleichmar Fonti & Auld was co-counsel for the Detroit fund with Akerman and a third firm.

Four Days With Jon Corzine

On October 25, 2011, MF Global reported a quarterly loss of $191.6 million, including a $119.4 million allowance against deferred tax assets, and disclosed the risk in the European sovereign debt it held through repurchase-to-maturity transactions. Its stock fell about 48 percent. The rating agencies cut the company to junk, the New York Stock Exchange halted trading on October 28, and on October 31 MF Global filed for bankruptcy. The investors who sued alleged that the company’s statements about its risk controls, its liquidity and its sovereign-debt exposure had been false, that its financial statements had departed from generally accepted accounting principles, and that roughly $1.6 billion had been taken from customers’ segregated accounts.

Bleichmar represented the Alberta Investment Management Corporation from November 2011; the court appointed it co-lead plaintiff with the Virginia Retirement System on January 20, 2012, and the lawyers for the two funds became co-lead counsel for the class. When Bleichmar, Joseph Fonti and Dominic Auld opened their own firm in August 2014, the court approved Alberta’s choice to keep them. The court denied the defendants’ six motions to dismiss in their entirety and certified the class on October 14, 2015. Counsel reviewed millions of pages and took more than fifty depositions, four days of them with Jon Corzine, the former senator and governor who had run the company. Five settlements followed: $74 million from Goldman Sachs and other underwriters and $932,828 from Commerz Markets, both approved June 26, 2015; $65 million from PricewaterhouseCoopers, the auditor, and $64.5 million from the officers and directors, Corzine among them, both approved November 25, 2015; and $29.825 million from Jefferies and the remaining underwriters of the final bond offering, approved July 15, 2016. The $234.3 million came to about 35 percent of the damages the plaintiffs had alleged. The fund has been fully distributed and the case closed.

Granite and Structured Alpha

The Police Retirement System of St. Louis sued Granite Construction in San Francisco, alleging that the company and its senior managers had understated the cost overruns and delays on several of its largest joint-venture construction projects and their effect on its financial statements. Judge William Alsup appointed the St. Louis system lead plaintiff on November 26, 2019, approved the firm as lead counsel on January 16, 2020, denied the motion to dismiss on May 20, 2020, and certified a class of purchasers between February 17, 2017 and October 24, 2019 in January 2021. Granite settled for $129 million, approved March 17, 2022, a recovery the parties estimated at 20 to 30 percent of the class’s damages. The settlement, Alsup said, “flowed from the hard work of class counsel, the discovery they took, the investigations they did”; class counsel had “investigated this case in great depth,” and their work had “plausibly led to a restatement.”

For the Metropolitan Transportation Authority, which since 2008 had put nearly $200 million into Allianz Global Investors’ Structured Alpha funds and lost more than 90 percent of it, Bleichmar filed suit in Manhattan in September 2020, alleging negligent and imprudent trading and a failure to run the risk-management procedures Allianz had committed to. The court denied the motion to dismiss on September 30, 2021. After fact discovery and mediation, the parties announced a confidential settlement on May 17, 2022.

Columbia, Andover and a Firm Opened in 2014

Bleichmar went to Phillips Academy Andover, took his bachelor’s degree at the University of Pennsylvania and his law degree at Columbia, where he was a Harlan Fiske Stone Scholar and managing editor of the Columbia Journal of Law and Social Problems. He is admitted in Connecticut and New York, before the Supreme Court, the Second, Third, Fourth, Eighth, Ninth and Tenth Circuits, and the Eastern and Southern Districts of New York. He is a native Spanish speaker and fluent in French. He co-founded Bleichmar Fonti & Auld in 2014 and leads its case-evaluation and securities-litigation teams in the United States; the firm, which takes its cases on contingency, had forty lawyers by 2023. “We litigate every case as if it will go to trial, and we are dedicated to taking our cases deep into the litigation,” he has said. “Once involved in litigation, we treat every case as a valuable asset that must be maximized.”

He belongs to the National Association of Public Pension Plan Attorneys and the National Conference on Public Employee Retirement Systems, is vice president of the Institute for Law and Economic Policy, and sits on the New York City Bar’s Judiciary Committee. His pending cases include the derivative action against Boeing’s directors for the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio and the Oklahoma Firefighters Pension and Retirement System, and securities cases against Citigroup, Exxon Mobil, CVS Health, the Toronto-Dominion Bank, Centene, UiPath, Fortinet, Hub Group, Helen of Troy and Badger Meter.