DAVID M. LEVY

PARTNER

For almost 40 years, David Levy has developed and maintained a diversified corporate and commercial practice, focusing on litigation and all forms of dispute resolution, as well as general corporate, business and employment-related counseling. In addition to regularly representing public and private companies or their shareholders in a wide variety of transactional, corporate, and litigation matters, David frequently works with hedge fund and investment fund managers and investment advisors in defense of enforcement proceedings and regulatory examinations and audits.

Practices

About

David’s role as a problem-solver takes many forms, and he regularly sits in on board of directors’ meetings, works closely with clients on sensitive regulatory matters, internal investigations and, on several occasions, has been engaged to mediate complex commercial disputes, including his appointment by the New York Supreme Court as a Special Master to oversee the orderly liquidation of pledged collateral.

David’s extensive litigation and regulatory defense experience includes the following:

  • Complex commercial litigation, including unfair competition, restrictive covenants, trade secrets, real estate and construction, mergers and acquisitions, bankruptcy and insolvency, and an extensive variety of business torts and contract-based claims.
  • Corporate and Securities litigation and arbitration, shareholder and partner disputes, corporate and partnership dissolutions and breakups and securities fraud, representing private and institutional investors as well as institutional brokers/dealers and individual brokers.
  • Employment and labor counseling and dispute resolution involving post-employment restrictions, breach of contract, breach of fiduciary duties, and federal and state discrimination claims.
  • Real estate development and construction litigation, including ownership and title disputes, mechanics’ lien and mortgage foreclosures, and complex commercial lease disputes.
  • Administrative matters and regulatory defense, investigations and enforcement proceedings, regulatory audits and examinations before the Securities and Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC), Financial Industry Regulatory Authority (FINRA, formerly, National Association of Securities Dealers), Chicago Board Options Exchange (CBOE), National Futures Association (NFA), Federal Trade Commission, U.S. Department of Education, New York State Education Department, New York State Comptroller’s Office and New York State Department of Labor.

Experience

  • Representation of director of research in multiple federal and state class-action suits and FINRA and AAA arbitrations stemming from the demise of a $4 billion NYC-based hedge fund, which were ultimately settled and withdrawn against him without requiring his financial contribution or admission of liability.
  • Successful defense of action resulting in dismissal of all claims against hedge fund and co-founding principal in federal court action brought by former executive employee claiming more than $20 million in unpaid commissions and bonuses.
  • Representation of Options Trader in FINRA arbitration against major brokerage firm resulting in an award of substantial lost commissions in favor of the client and the complete offset of the unpaid balance of multimillion dollar signing advance asserted by the brokerage as a counterclaim.
  • Representation of a substantial family office in a FINRA arbitration against a major financial institution leading to an award of $7 million and a further recovery of $6.5 million against related parties.
  • Successful defense of federal court action against sole principal of foreign investment fund by substantial multi-national investor seeking to pierce the corporate veil in order to enforce a $2.2 million judgment previously obtained against the fund.
  • Successful defense of litigation brought by founding majority shareholder of $75 million NYC elevator company against the two junior “sweat equity” principals, resulting in the enforcement of the parties’ initial agreement which was scribbled on a napkin over a working lunch, and ultimately the clients’ acquisition of 100% equity in the company.
  • Successful representation of a commercial property owner in action to recover the $11.75 million purchase price for the sale of a three-parcel assemblage on the lower east side to a hotel developer. Based upon the Supreme Court’s favorable rulings, which were deemed to be law of the case, the defendant developer was stripped of its defenses and had no choice but to resolve the matter in favor of our client without further litigation, resulting a sale from which our client received payment in full of the unpaid purchase price.
  • Defense of engineering company and majority principal in litigation brought by founding minority shareholder resulting in the redemption of plaintiff’s shares for nominal consideration.
  • Successful defense of established film archive and production company in a series of actions in Florida, California, New Jersey and New York over a period of ten years brought by music and entertainment celebrity seeking the return of the intellectual property and copyright rights to his syndicated television variety show from the 70’s/80’s. After our filing of a declaratory judgment action in the Southern District of New York the dispute was finally resolved with the entry of a consent judgment adjudicating our clients’ ownership rights in the property without any payment of additional consideration.
  • Defense of claims of fraud and breach of contract brought against minority owner of private nursery/elementary school resulting in the successful redemption of her shares at a significant premium.
  • Successful representation of former owner of junior college against publically held purchaser of business in AAA arbitration resulting in the recovery of the unpaid $4.8 million balance of purchase price plus legal fees and costs.
  • Representation of a closely-held music publishing company in litigation against the world-wide industry leader resulting in a favorable multimillion dollar settlement of breach of contract action.
  • Successful defense of regulatory actions brought by the CBOE enforcement division and the National Futures Association against the principal of a defunct commodity pool operator.
  • Successful defense of FINRA investigations against registered representatives

Education

John Marshall Law School (J.D. with high distinction, 1981)

John Marshal Law Review, Executive Editor

SUNY at Albany (M.A., Comparative Criminal and Civil Jurisprudence, 1978)

University of Florida (B.A. with high honors, 1977)

Phi Beta Kappa

Bar Admissions

New York

Illinois (Inactive)

United States District Court for the Southern, Eastern and Northern Districts of New York

United States District Court for the Northern District of Illinois

United States Court of Appeals, 2nd Circuit

United States Court of Appeals, 7th Circuit

United States Tax Court

Publications

How Hedge Fund Managers May Address the Practical Implications of the NY Court of Appeal’s Attempt to Clarify the Common Interest Doctrine

The HedgeFund Law Report, September 2016

Dogged Due Diligence—Avoiding a Bad Foreign Partnership

Quoted Contributor, Global Trade Magazine, April/May 2016

Insights

Helping Clients Navigate COVID-19 (Updating)

August 18, 2020,

Kleinberg Kaplan is working closely with our clients to provide counsel and guidance during these unprecedented times. A selection of our recent thought leadership pieces related to the implications of COVID-19 includes: Corporate Considerations  The PPP Just Got Better (June 10, 2020): Chris Davis, Dov Kleiner, Uri Rosenwasser and Benjamin Goldman discuss the key highlights of the…

NY District Court Expands the Reach of the FFCRA

August 17, 2020

By Opinion and Order dated August 3, 2020 in the case of State of New York v. United States Department of Labor, Judge J. Paul Oetken, of the United States District Court for the Southern District of New York, invalidated four key components of the regulations issued by the Department of Labor (“DOL”) clarifying the…

Trademark Infringers Beware: Willful Infringement No Longer a Requirement for Damages

June 2, 2020

The U.S. Supreme Court recently settled a long-standing split among the federal appeals courts concerning whether a plaintiff alleging trademark infringement under the Lanham Act must first demonstrate the defendant acted willfully in order to recover a disgorgement of profits. Justice Gorsuch, writing for the Court, rejected Second Circuit authority and held that mens rea, or…

Private Investment Funds & Capital Commitments: Force Majeure as Investors’ Defense Du Jour?

April 8, 2020

Investment funds continue to grapple with COVID-19, responding to fluctuating financial markets and the ongoing economic, strategic and practical challenges facing them. During this tumultuous period, the funds’ limited partners, perhaps struggling with liquidity issues of their own, may be at risk of defaulting on capital calls triggered by the funds and their general partners. These defaults…

Is Your Business in Compliance with the SHIELD Act?

April 7, 2020

New York Governor Andrew Cuomo signed the Stop Hacks and Improve Electronic Data Act (the “SHIELD Act”), amending New York’s data breach laws (N.Y. Gen. Bus. Law § 899-aa) to address the growing cybersecurity risks faced by businesses, employees and consumers. The SHIELD Act now requires businesses and employers collecting private information of New York residents,…

The Force May Be With You: COVID-19 and Force Majeure Provisions

March 31, 2020

COVID-19 has caused major disruption to businesses, commerce and the financial markets. With the CDC and WHO projecting that the coronavirus is only in its early stages in the United States, businesses and individuals may feel the burden of the effects of COVID-19 for the foreseeable future. As the flow of goods and services continues…

COVID-19: Important Changes to Employment Laws

March 23, 2020

Federal and state laws have quickly evolved to offer relief to various groups of employees unable to work due to the 2019 novel coronavirus (COVID-19) pandemic. The following summary is intended to be a general guideline, as there are nuances which may affect each particular situation. New York State has recently passed emergency legislation to provide sick…

Kleinberg Kaplan Partner David Levy Quoted in Hedge Fund Law Report

August 29, 2019

Kleinberg Kaplan partner David Levy offers his insight on how the ruling in SEC v. Benjamin Alderson and Bradley Hamilton may impact attorney-client privilege in Hedge Fund Law Report’s “SDNY: In Absence of Attorney-Client Relationship, Communications With Consultants Who Happen to Be Attorneys Are Not Protected.” To read the full article, click here.

Supreme Court Finds the SEC’s In-House Enforcement Proceedings To Be Unconstitutional: An Easy Fix

June 27, 2018,

On June 21, 2018, the U.S. Supreme Court handed down its decision in Lucia v. Securities and Exchange Commission, finding that the SEC’s system of appointing administrative law judges (ALJs) by the SEC staff, rather than by the SEC commissioners themselves, is unconstitutional.   The case resolved a split between the U.S. Courts of Appeals for the…

In Somers, the Supreme Court Narrows the Law Governing Retaliation Against Whistleblowers – but the Ruling May Hurt Employers in the Long Run

February 23, 2018,

Overview: On February 21, 2018, the U.S. Supreme Court issued its ruling in Digital Realty Trust, Inc. v. Somers, resolving disagreement among the Second, Fifth and Ninth Circuit Courts of Appeals and the SEC concerning the scope of the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, applicable to…

Supreme Court Limits SEC’s Recovery on Disgorgement Claims

June 7, 2017,

On June 5, 2017, the U.S. Supreme Court rendered a decision of significant consequence to securities industry participants, holding that disgorgement claims under the federal securities laws are “penalties” under 28 U.S.C. § 2462, and therefore are subject to a 5-year statute of limitations. The Supreme Court’s unanimous decision in Kokesh v. Securities and Exchange…

New York’s Highest Court Affirms Enforceability of Agreements That Are “Subject To” Further Documentation

January 12, 2017,

On December 20, 2016, New York’s highest court rendered a decision confirming what participants in financial markets have long believed to be true: that absent an express manifestation of the parties’ intent not to be bound, an agreement to buy or sell a financial instrument that includes all material terms but is “subject to” additional…

The Value of Domestic Cooperation in Dealing with Foreign Corruption

June 16, 2016,

The Securities and Exchange Commission and the Department of Justice recently have sought to persuade companies to self-report violations of the Foreign Corrupt Practices Act. The SEC has announced non-prosecution agreements with two companies, Akamai Technologies and Nortek Inc., respecting bribes paid to Chinese officials by Chinese subsidiaries. Each U.S. company was required to disgorge…

Two Federal Judges in New York Reject Bids To Enjoin SEC Administrative Proceedings Against Securities Fraud Defendants

July 1, 2015,

On June 30, 2015, U.S. District Judge Ronnie Abrams handed down an important decision affecting the SEC’s controversial practice of bringing insider trading enforcement actions in the form of in-house administrative proceedings instead of as civil court actions. In a 23-page opinion, Judge Abrams refused to enjoin the SEC from continuing with an ongoing administrative…

Federal Court Chips Away at SEC’s Use of In-House Administrative Proceedings Against Insider Trading Defendants

June 11, 2015,

On June 8, 2015, U.S. District Judge Leigh Martin May handed down an important decision affecting the SEC’s practice of bringing insider trading enforcement actions in the form of in-house administrative proceedings instead of civil court actions. In a 45-page opinion, Judge May enjoined the SEC from continuing with an ongoing administrative proceeding on the…

SEC Issues Guidance Regarding Administrative Proceedings

May 11, 2015,

On Friday, May 8, 2015, the Securities and Exchange Commission issued guidance to its staff to assist in determining whether to bring enforcement actions in federal district court or as administrative proceedings before an Administrative Law Judge. The administrative proceedings have become highly controversial in recent years, as many defendants in the proceedings have complained…

Class Assertion of State Law Fraud Claims relating to Certain Securities Is Now Easier in New York, Connecticut and Vermont

May 5, 2015,

The U.S. Court of Appeals for the Second Circuit, in In re Kingate Management Limited Litigation, recently made it significantly easier for plaintiffs in the Second Circuit and New York, Connecticut and Vermont state courts to bring class actions alleging violations of state law in litigation involving certain types of securities. By allowing these claims…

Issuer Liability for Opinions in Registration Statements

March 27, 2015,

On March 24, 2015, the Supreme Court of the United States issued a decision setting standards for opinions in issuers’ registration statements. In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, the Court held that an issuer of securities must ensure that representations of opinion in registration statements are (1) sincerely held and…

SEC’s Co-Chief of Enforcement (Asset Management Unit) Describes Enforcement Priorities for the Year

March 3, 2015

The Co-Chief of the Securities and Exchange Commission’s Asset Management Unit (the “AMU”) recently provided a revealing and important glimpse into the SEC’s priorities in bringing enforcement actions in the investment fund community. Julie M. Riewe gave an overview of the AMU’s capabilities and accomplishments in the five years since it was formed, and provided…

First Department Extends Common Interest Privilege

December 9, 2014,

In a decision sure to affect the behavior of parties in transactional and other contexts, the New York Appellate Division for the First Department on December 4, 2014 eliminated the “pending or reasonably contemplated litigation” requirement from the common interest privilege. Thus, the presence of a third party at an otherwise privileged communication will not…

An arbitration by any other name…

April 30, 2014

When entering into a contract, parties need to know that they could be agreeing to arbitration without knowing it. A New York federal court recently held that the parties’ agreement to utilize a third-party appraisal procedure in the event of a dispute entitles the successful party to exercise important enforcement rights relating to arbitration, even…

Analyst Indicted for Stealing Hedge Fund Trading Data

April 1, 2014

The New York County District Attorney’s Office recently announced the indictment of a former analyst with a New York City hedge fund alleging that the analyst illegally accessed and duplicated proprietary and highly confidential information relating to the firm’s trading methods. The analyst is charged with multiple counts of Unlawful Use of Secret Scientific Material,…

Disclosure of Wells Notices Not Required by Section 10(b)

August 31, 2012

A recent decision of the United States District Court for the Southern District of New York has held that Section 10(b) of the Securities Exchange Act of 1934 does not require companies to disclose their receipt of a Wells Notice. The SEC provides the target of an investigation with a Wells Notice whenever the Enforcement…

Whistler Beware: Court of Appeals Puts Advisers’ Compliance Officer at Risk

April 30, 2012

In a controversial but important decision, the highest state court in New York has held that an employer can terminate the employment of its chief compliance officer for voicing objections to allegedly improper trading practices. Issued last week, the decision of the New York State Court of Appeals in Sullivan v. Harnisch, 2012 N.Y. Lexis…