Sharan Nirmul

Nirmul, a partner in the firm's office in Radnor, Pennsylvania, holds a bachelor's degree from Cornell University and a law degree from the George Washington University Law School and studied international human rights law in a joint programme at New College, Oxford. He represents public pension funds and other investors in securities, consumer and fiduciary class actions, and he speaks at the firm's annual conferences for institutional investors in Amsterdam and Washington, D.C. In an arbitration before the American Arbitration Association he recovered $70 million for Transatlantic Re from its former parent, American International Group, over AIG's handling of a securities-lending program, and he led the suits alleging that Citibank, BNY Mellon and JP Morgan charged hidden foreign-exchange fees when they converted the dividends paid on American depositary receipts, which returned $100 million to the receipts' holders and brought reforms to the banks' currency practices for those receipts.

Long-Term Service Agreements

In factoring, a company sells the right to collect a receivable and takes cash before the debt falls due. In the fourth quarter of 2015 GE Power began factoring receivables under its long-term service agreements that would not come due for more than a year, selling them to the company's financial-services arm, GE Capital, for cash at once and at a cost. Bornstein said on the earnings call of January 20, 2017 that “factoring with GE Capital was a $1.6 billion change for the year.” The shareholders alleged that GE's statements concealed how heavily it relied on these intercompany sales to offset weakness in GE Power's cash flow from operations, and that the truth came out in three steps: first-quarter results on April 21, 2017, with a $1 billion shortfall in industrial operating cash flow; second-quarter results on July 21, which cut GE Power's cash-flow target for the year by $1 billion; and third-quarter results on October 20, which lowered the company's industrial cash-flow guidance for 2017.

The suit was filed on November 1, 2017. On May 30, 2018 the court appointed Sjunde AP-Fonden, the Swedish national pension fund known as AP7, lead plaintiff and approved its choice of Kessler Topaz as lead counsel; on January 29, 2021 Judge Furman sustained claims that GE had failed to disclose its factoring and had affirmatively misled investors about it; and on April 11, 2022 he certified a class of investors who had bought GE common stock from February 29, 2016 through January 23, 2018 and been damaged, with AP7 and the Cleveland Bakers and Teamsters Pension Fund as its representatives and Kessler Topaz as class counsel. By September 1, 2022, 3,785,032 postcard notices had gone out to investors, and the summary notice had run in The Wall Street Journal and over PR Newswire.

Flannery, Immelt, Green and Bornstein

Nirmul supervised the shareholders' case and took part in it from the investigation to the settlement. The investigation behind the complaints reached more than one hundred former GE employees and about 325 leads, and the pleadings rested on the first-hand accounts of ten of them. In discovery he and his colleagues analyzed more than 1.1 million pages produced by GE and third parties and produced about 80,000 pages of their own. They deposed fifteen fact witnesses, thirteen of them high-level GE employees, among them John Flannery, a former chief executive, on December 9, 2021; Robert Green, the former chief financial officer of GE Power, on December 17; Jeffrey Immelt, also a former chief executive, on January 6, 2022; and Bornstein on February 1, 2022. They also took or defended seven expert depositions and defended the depositions of both class representatives.

September 28, 2023

Judge Furman ruled that day on GE's motion for summary judgment and on the parties' motions to exclude one another's experts. He held that the shareholders' evidence “raises a permissible inference that GE's undisclosed factoring led to a massive gap in cash flow that materialized in 2017,” and that a reasonable jury could find the practice material to investors and understood by GE's management-level employees, and Bornstein's answer on the January 2017 call “knowingly misleading.” Bornstein's April 2017 emails were part of that evidence, with internal messages that tracked what the factoring cost and the drag it would place on later cash flow. The claims tied to the disclosures of April, July and October 2017 went forward toward trial, and the court allowed the testimony of the shareholders' economist, David Tabak, on the link between those disclosures and the declines in GE's share price, and of a second expert on GE's cash-flow measures and the economic importance of the factoring. Judge Furman closed by directing the parties to confer about settlement, writing that they “should try to settle this case without the need for a trial that would be expensive and risky for both sides.”

A Jury Questionnaire

The parties exchanged pretrial disclosures on November 17, 2023: the shareholders identified 536 proposed exhibits and GE 3,751, and testimony was designated from the depositions of twenty-one witnesses. On December 20 they filed a joint pretrial statement, with witness and exhibit lists, deposition designations, proposed jury charges, verdict forms and a jury questionnaire, together with their motions in limine. In February 2024 Nirmul's team held a two-day mock jury and focus-group exercise in New York City, and on March 21 Judge Furman granted the shareholders' motion to bifurcate the trial. After the Supreme Court held on April 12, 2024, in Macquarie Infrastructure Corp. v. Moab Partners, that pure omissions cannot support a claim under Rule 10b-5(b), GE argued that the decision left the entire case subject to dismissal; Judge Furman declined to narrow the claims before trial and allowed GE to press the argument by motion under Rule 50 during or after it. A final joint pretrial statement was filed on May 24, and the court decided the motions in limine on September 18. The team built demonstrative exhibits and deposition video excerpts, prepared examinations for more than fifteen fact and expert witnesses expected to testify live, readied its experts for direct and cross-examination and began preparing a second mock trial for October. Trial was set for November 11, 2024.

A Double-Blind Proposal

The parties had mediated before Layn R. Phillips, a former United States District Judge, on August 11, 2022 and November 2, 2023, and they returned to him on August 23, 2024 as the trial preparation went on. Judge Phillips made a double-blind proposal on October 8 to resolve the case for $362,500,000, and both sides accepted it on October 10, with nearly all the pretrial work complete and the trial a month away. The stipulation of settlement followed on November 22, and Judge Furman granted preliminary approval on January 14, 2025. On April 24, 2025 he approved the settlement and a plan of allocation that uses the dates of each purchase and sale to measure the artificial inflation and tie recognized losses to the disclosures, with eligible investors sharing pro rata through the claims process, and entered final judgment.

R1T and R1S

Rivian Automotive went public on November 10, 2021 at $78 a share, having taken more than 55,000 preorders for its R1T and R1S electric vehicles. AP7 was appointed lead plaintiff in the Central District of California on July 1, 2022, and the investors alleged that the cost of the materials in the R1 far exceeded its sales price, that senior executives had conceded internally that prices would have to rise, and that the company waited until after the offering to raise them. On March 1, 2022 Rivian raised the prices to about $79,500 for the R1T and $84,500 for the R1S, applying the increases to nearly all existing preorders, and two days later withdrew them for orders placed before March 1; after the company's disclosures of March 10 its shares closed on March 14 at $35.83, down from $67.56 on February 28. Judge Josephine L. Staton denied the motions to dismiss the amended complaint in full on July 3, 2023 and certified the classes on July 17, 2024.

Nirmul's team obtained nearly 900,000 documents, more than 3.5 million pages, from Rivian and third parties; took or defended thirty-one fact and seventeen expert depositions, among them those of Rivian's former chief operating officer and former chief financial officer in November and December 2023; exchanged fifteen opening and rebuttal expert reports; and carried the case through seven motions to exclude expert testimony, a fully briefed motion for summary judgment and the start of trial preparation. In September 2025, after nearly a year of negotiations, the parties accepted Judge Phillips's recommendation to settle for $250 million in cash. On May 20, 2026 Judge Staton approved the settlement and a plan of allocation under which class members who establish recognized losses share the net fund pro rata, and on May 29 she entered judgment.

Standing Instructions

Custodial clients of the Bank of New York Mellon that bought or sold foreign securities could leave the currency conversions to the bank's standing-instruction service, which exchanged currency automatically as each trade required. In early 2011 claims that a whistleblower had filed on behalf of public pension funds in Virginia, California, Massachusetts and New York were unsealed, and the Southeastern Pennsylvania Transportation Authority, one of the bank's custodial clients, put its own conversions through a statistical analysis and found its rates clustered near the worst of each day's interbank trading range; in March 2011 it filed a nationwide class action in the Eastern District of Pennsylvania. The customers' cases were gathered into a multidistrict litigation before Judge Lewis A. Kaplan in Manhattan, in which Nirmul served as lead counsel; over four years it ran to 128 depositions and millions of pages of documents, in collaboration with the Justice Department and the New York attorney general. In February 2015, after mediation before Judge Phillips, the customer class settled for $335 million.

On March 19, 2015 Preet Bharara, the United States Attorney in Manhattan, and Eric T. Schneiderman, the New York attorney general, announced settlements totaling $714 million: the $335 million for the class actions, $167.5 million to the United States, $167.5 million to New York, $14 million for the Department of Labor's claims and $30 million for the Securities and Exchange Commission's investigation. New York directed $155 million of its recovery to the bank's customers and the Labor Department its entire $14 million to the customers that were ERISA plans, and when Judge Kaplan approved the class settlement on September 24, 2015, the 1,218 domestic custodial clients who had used standing instructions from 1999 through 2012 received a gross recovery of $504 million. Under a partial settlement with the United States in January 2012 the bank had already agreed to disclose how standing-instruction trades were priced, to make pricing data available and to stop describing the service as free or as providing best execution; in 2015 it agreed to end its employment of certain executives with responsibilities for the product and to give clients more pricing information about its new standing-instruction services. In its settlements with the United States and New York State the bank admitted and accepted responsibility for conduct alleged in the fraud suits. It had priced its standing-instruction clients' currency purchases at or near the high end of the day's reported interbank range and their sales at or near the low end, recording the spread as “sales margin,” and, “contrary to representations to clients that it provided ‘best rates’ and ‘best execution,’ the Bank actually gave clients the worst reported interbank rates of the trading day.”