Steven J. Toll

On February 10, 2015, Toll stood before Judges Henderson, Rogers and Pillard of the D.C. Circuit, Daniel S. Sommers beside him, for the Arkansas Public Employees’ Retirement System, lead plaintiff in a securities case the district court had dismissed the year before. The company was Harman International, the audio and electronics maker, and the product was the personal navigation device it sold in Europe. On April 26, 2007, the day Harman announced that KKR and an affiliate of Goldman Sachs had agreed to buy it, chief executive Sidney Harman told analysts that the European market for the devices had become “extremely competitive,” that the plan called for 618,000 units in the fiscal year, and that inventory would fall from $75 million at the end of March to about $15 million by June 30. About 300,000 units had been sold in the first nine months. Asked whether the target of more than 600,000 still held, he answered: “We do, and we said so.” The shares rose from $102.56 to $122.50.

A former sales engineer and a former accounting manager told a different story in the complaint: a design change early in 2007 had made the older generation of devices obsolete, five versions had been released between March 2006 and July 2007, about 100,000 obsolete units were sold at $110 below the $350 price, and sales missed the plan by more than 200,000 units, at least $85 million, in fiscal 2007. On August 29, 2007, the annual report signed by the individual defendants said that “[s]ales of aftermarket products, particularly PNDs, were very strong during fiscal 2007.” In September the buyers walked away from the acquisition, and on September 27 chief financial officer Kevin Brown told analysts the company would “continue the growth and expansion of that business primarily in Europe.” On January 14, 2008, Harman cut its earnings guidance, citing “a major shift in the market for Portable Navigation Devices,” and the stock fell 37.65 percent. A February 5 release took it down more than 15 percent the next day.

The Private Securities Litigation Reform Act shelters a forward-looking statement that is identified as such and “accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially.” The district court had held that Harman’s warnings qualified. Toll argued that a warning about what might happen is meaningless once the thing has already happened. On June 23, 2015, Judge Rogers, writing for the panel, agreed. Cautionary language must be “substantive and tailored to the specific future projections,” she wrote, and “cannot be ‘meaningful’ if it is ‘misleading in light of historical fact[s].’” There is “an important difference between warning that something ‘might’ occur and that something ‘actually had’ occurred.” By September 2007, “the risk of which [the Company] warned… had already transpired.” The court also refused to treat the annual report’s “very strong” sentence as puffery: it “is plausibly understood as a description of historical fact rather than unbridled corporate optimism.” The panel reversed the dismissal as to all three statements and sent the case back. Harman asked the Supreme Court to review the decision, and the Court declined on February 29, 2016. The company settled for $28.25 million in cash, and the district court gave final approval on September 28, 2017, ten years after the first complaint was filed.

Five Thousand Barrels a Day

The Deepwater Horizon exploded on April 20, 2010, at BP’s Macondo well in the Gulf of Mexico, killing eleven rig workers. The well was sealed on July 15. About five million barrels of oil escaped over eighty-seven days, roughly 60,000 barrels a day. What BP told the market during the first five weeks became a securities case in Houston, with the New York State Common Retirement Fund and the Ohio Public Employees Retirement System as lead plaintiffs and Toll, for Cohen Milstein, as co-lead counsel for New York.

On April 29, 2010, BP filed a report with the Securities and Exchange Commission saying the flow was “currently estimated at up to 5,000 bopd.” It filed a similar report the next day, and on May 4 another, citing an estimate that “some 5,000 barrels (210,000 US gallons) of oil per day” were escaping. Inside the company, the SEC later alleged, at least five calculations and estimates already showed a higher rate, and BP’s own data indicated flows as high as 146,000 barrels a day; nothing in its hands suggested that 5,000 was a ceiling or even a best estimate. Through May, BP executives defended the figure in public and called other estimates scaremongering. On August 2, 2010, the government’s Flow Rate Technical Group put the rate at 52,700 to 62,200 barrels a day. BP never corrected the filings. In November 2012 it agreed to pay the SEC a $525 million penalty, and Robert Khuzami, the Commission’s enforcement director, said that “a company can’t hide critical information simply because it fears the backlash.”

Judge Keith P. Ellison let the shareholders’ flow-rate claims proceed on February 13, 2012, finding scienter sufficiently pleaded against BP, Anthony Hayward, then its chief executive, and Douglas Suttles, its chief operating officer for exploration and production. Hayward had defined his own job to include a special focus on process safety. “Taking him at his own word,” the judge wrote, “the Court finds that Plaintiffs have sufficiently pleaded scienter with respect to Hayward.” BP had told the public it could recover nearly 500,000 barrels of oil a day; forty-nine days after the explosion it was recovering 15,000, and the gap was so wide, Ellison wrote, that the projected numbers “appeared to have been invented out of thin air.” On May 20, 2014, he certified a class of investors who had bought BP’s American depositary shares between April 26 and May 28, 2010, the weeks in which the company stood by the 5,000-barrel figure, finding that BP had “lowballed” the flow rate and that the share price “did not reflect the magnitude of the disaster facing the company.” The plaintiffs’ expert, Chad Coffman, had measured the fall in the shares after each of six disclosures that pulled the truth into view: the government’s fivefold increase of its estimate on April 29, satellite surveillance on May 3 showing a larger spill, the failed containment dome on May 10, the failed “junk shot” and “top kill” of June 1, the market’s doubt on June 9 that BP would pay its dividend, and the government’s pressure on June 14 for better cleanup plans.

BP appealed, and Toll and the investor team defended the certification. On September 8, 2015, Judge Patrick E. Higginbotham, for a Fifth Circuit panel with Judges Jolly and Davis, affirmed. The claim, as the court put it, was that “Defendants perpetuated the fiction that the spill was only approximately 5,000 barrels per day,” “even as internal BP estimates showed that the true number was much higher,” and BP’s attacks on Coffman’s model, including its argument that some of the six events reflected the spill itself rather than the misstatements about it, raised questions common to every member of the class that a jury could answer once. “We conclude that the district court did not abuse its discretion in certifying the Post-Spill class, and AFFIRM.” Both sides had moved for summary judgment in November 2014. With trial approaching, BP agreed in early June 2016 to pay $175 million. Judge Ellison gave preliminary approval on November 8, 2016, and final approval on February 13, 2017, telling the lawyers he wanted “to reiterate how fortunate I feel” to have worked with counsel on both sides, who had shown “the highest standards both of scholarship and of advocacy.”

In Compliance With Those Plans

On September 8, 2016, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau fined Wells Fargo $135 million over accounts opened in customers’ names without their knowledge, roughly 3.5 million of them. On February 2, 2018, the Federal Reserve entered a consent order that capped the bank’s assets until it repaired its governance and risk management, with plans due in sixty days and a third-party review by September 30. On April 20, 2018, the OCC and the CFPB entered their own orders and a penalty of more than $1 billion. The Fed rejected the bank’s first plans on April 3, 2018, and wrote on May 7 that they could not “be evaluated by [the Federal Reserve] staff for their adequacy.” The OCC rejected its plan on July 24 and the second version on November 21. On March 11, 2019, the Fed rejected the revised plans as “materially incomplete.”

The bank’s officers were speaking to investors through the same months. On May 30, 2018, chief financial officer John Shrewsberry told a Deutsche Bank conference that “our investors know everything that’s material that we know.” On June 13 he described the work as “the last mile.” On December 4, 2018, chief executive Timothy Sloan told a Goldman Sachs conference there was “really nothing new to report,” and told CNBC, “We’ve got plans in place.” On January 15, 2019, Sloan spoke of “complete agreement with the Fed”; on February 12 Shrewsberry said “we’re making great progress.” On March 12, 2019, the day after the Fed’s letter, Sloan testified before the House Financial Services Committee. He could not answer in detail, he said, without disclosing confidential supervisory information, and then: “We are in compliance with those plans.” The OCC said publicly that it did not agree with the testimony. The Federal Reserve called his statements “false.” After the hearing Sloan telephoned the Fed “to apologize for his mischaracterizations in statements during the hearing and to the media.” On March 28, 2019, Wells Fargo announced his resignation. On May 30, 2019, interim chief executive C. Allen Parker said the bank was “largely there” and had reached a “meeting of the minds” with the Fed, after the Fed had rejected the bank’s revised plans and warned that “[a] third failure to submit acceptable plans could cause the [Federal Reserve] to consider additional actions.”

On March 4, 2020, the committee’s Democratic staff released a 113-page report after a year’s investigation. Regulators, it found, “knew about serious, enterprise-wide deficiencies at Wells Fargo for years without taking public enforcement action”; the board “failed to ensure management could competently address the company’s risk management deficiencies”; internal emails showed a “lack of urgency” about the consent orders; Sloan had given inaccurate and misleading information to Congress; and “the potential for widespread consumer harm still remains at Wells Fargo.” Chairwoman Maxine Waters called the bank “a reckless megabank with an ineffective board and management that has exhibited an egregious pattern of consumer abuses.” Board chair Elizabeth Duke and James Quigley, chairman of Wells Fargo Bank, resigned on Sunday, March 8, days before they were to testify. The stock fell. The class period in the case that followed ran from February 2, 2018 through March 12, 2020, and the complaint put investors’ losses at more than $54 billion in market value.

The Employees’ Retirement System of Rhode Island, through the state’s general treasurer, the Public Employees’ Retirement System of Mississippi, the Louisiana Sheriffs’ Pension & Relief Fund and Handelsbanken Fonder were appointed lead plaintiffs on August 29, 2020, with Cohen Milstein and Bernstein Litowitz Berger & Grossmann as co-lead counsel. The case proceeded without a financial restatement or a parallel SEC or Justice Department enforcement action, so the investor team built it on the bank’s own words set against the regulators’ letters. On September 30, 2021, Judge Gregory H. Woods held that the statements by Shrewsberry, Sloan, Parker and Duke could go forward. Parker’s “I think” did not make his claims opinion; as the Supreme Court had said in Omnicare, “some sentences that begin with opinion words like ‘I believe’ contain embedded statements of fact,” and the omitted fact was the Fed’s rejection. Sloan’s “We are in compliance with those plans” was actionable because a reasonable investor could read it as an answer to Chairwoman Waters’s question about compliance.

Discovery produced more than 3.9 million pages from the defendants, third parties and the funds. Through a mediation conducted by Layn Phillips of Phillips ADR, the parties reached a settlement dated May 8, 2023: $1 billion in cash for everyone who bought Wells Fargo common stock during the class period. Toll signed it for Cohen Milstein with Laura H. Posner, Julie G. Reiser, S. Douglas Bunch and Molly J. Bowen. “We are proud to represent two state retirement systems in their effort to hold Wells Fargo accountable for its misconduct,” he said, and the settlement would help compensate hundreds of thousands of investors, state employees, nurses, teachers, police officers and firefighters among them, whose retirement savings had been hurt. Judge Woods granted preliminary approval on May 16, 2023; after the case was reassigned, Judge Jennifer L. Rochon granted final approval on September 8, 2023. The claims administrator paid the first distribution on October 22, 2024, a second on July 23, 2025, and a third in September 2026.

Thirty-Eight Thousand Loans

After 2008 the practice turned to the mortgage pools that had been sold to pension funds as investment-grade paper; Toll’s share of it ran through the Countrywide, RALI, Harborview and NovaStar cases, each led by public pension or retirement funds. The New Jersey Carpenters Health Fund, with the New Jersey Carpenters Vacation Fund and the Boilermaker Blacksmith National Pension Trust, sued Residential Capital, its subsidiary Residential Accredited Loans, and ten underwriters over fifty-nine offerings of mortgage pass-through certificates issued between March 28, 2006 and October 9, 2007, $37.66 billion in all, alleging that the loans behind them had been written without regard to the stated underwriting guidelines and that Residential Capital and the underwriters had not done adequate due diligence on the originators. On March 31, 2010, Judge Harold Baer let the due-diligence and underwriting claims proceed. Over nearly seven years the case produced more than four million pages of documents, analysis of more than 38,000 mortgage loans, and depositions of fifteen fact witnesses and sixteen experts. The $335 million recovery combined $100 million from the ResCap bankruptcy with $235 million from the underwriters, and Judge Katherine P. Failla gave final approval on July 31, 2015. “Plaintiffs’ counsel took on an enormous amount of risk and stuck with it for nearly seven years,” she said.

The Harborview certificates, fourteen offerings by affiliates of the Royal Bank of Scotland, were pursued by pension and health funds; the court approved a $275 million cash settlement on November 4, 2014, and Judge Loretta A. Preska told the lawyers it was a “job well done.” In Countrywide, Cohen Milstein represented the Iowa Public Employees’ Retirement System and other funds as class counsel, and Toll was co-lead counsel when the case settled in mediation for $500 million, approved December 5, 2013. The Bear Stearns mortgage pass-through case, in which the firm was again co-lead counsel, settled for $505 million in cash, approved May 27, 2015. Each pool had its own loans, its own offering documents, its own expert record and its own plan of allocation.

Lucent, Parmalat and a Demand That Rose $5 Million a Day

In the Lucent Technologies securities case, Cohen Milstein represented the Parnassus Fund, a co-lead plaintiff; the settlement, $500 million in cash, stock and warrants, received final approval on December 15, 2003. In Parmalat, the firm was co-lead counsel for European institutional investors, the settlements totaled more than $90 million, and the court said plaintiffs’ counsel “did a wonderful job.” A securities case against Globalstar was hard to settle because of a dispute among its insurers over their layers of coverage, so it went to trial after summary judgment. “Each day our demand would go up by $5 million until the jury rendered its verdict,” Toll has said. The case settled near the end of the trial. Outside the securities docket he was co-lead counsel in the Lumber Liquidators class action over laminate flooring made in China, which settled for $36 million, approved October 9, 2018.

From the Federal Home Loan Bank Board to Managing Partner

Toll graduated from the Wharton School of the University of Pennsylvania in 1972, cum laude, and from Georgetown University Law Center in 1975, and went to the Federal Home Loan Bank Board, a federal banking regulator, first in enforcement and then in litigation. He then wrote to about a hundred Washington law firms. Cohen Milstein answered, and he joined in 1979, “almost by happenstance,” he has said. He became managing partner in 1997 and held the job through the end of 2023, twenty-six years in which the firm grew from about twenty lawyers to more than one hundred and in which securities work became about a third of a practice that added antitrust, employee-benefit, consumer and civil-rights cases. He describes the firm’s way of litigating as aggressive but professional, with no deception, and says that the trust built with opposing counsel is what makes a mediation work when the two sides still disagree about the merits. He is admitted in the District of Columbia and Virginia and co-chairs the firm’s Securities Litigation & Investor Protection practice.

The appellate reversals continued after Harman. As sole lead counsel for the Seafarers Pension Plan in the Boeing derivative litigation, he won a two-to-one reversal of the dismissal in the Seventh Circuit; the case settled on December 14, 2022, with a companion Delaware class action settling on January 13, 2023, for more than $107 million in value, more than $100 million of it in governance reforms and $6.25 million in cash from the directors’ insurers. In Pluralsight, where he was sole lead counsel, the Tenth Circuit reversed a dismissal and the case settled for $20 million, approved February 4, 2025. As co-lead counsel in the EQT securities case he reached a $167.5 million all-cash settlement, approved November 4, 2025, and as sole lead counsel against Deloitte in South Carolina a $34 million settlement, approved March 2, 2026. He is sole lead counsel in the securities cases against Perrigo, Compass Diversified Holdings and Orthofix Medical, co-lead counsel in the Gartner and FMC cases and in the Live Nation derivative action, and lead counsel in the case against The Trade Desk. On October 27, 2025, he and Sommers, who had sat with him at the Harman argument, spoke to Albany Law School students about how securities class actions are built.

In 1987 his daughter died of leukemia. He set up an endowment in her name at Children’s Hospital National Medical Center for leukemia patients and their families, and programs that bring music and laughter onto the wards during a child’s stay. His wife, Lolly, died of cancer in March 2012 after fifteen months of illness, and that year the family founded Lolly’s Locks, which buys high-quality wigs for cancer patients who cannot afford them. By the middle of 2014 it had helped just under a hundred women in thirty-one states.