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Morrison & Foerster Secures Groundbreaking Result for Farmland Partners Inc. in Short-and-Distort Case

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Morrison & Foerster achieved a landmark settlement for its client Farmland Partners Inc. (FPI), a publicly traded farmland REIT located in Denver, Colorado. 

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Morrison & Foerster achieved a landmark settlement for its client Farmland Partners Inc. (FPI), a publicly traded farmland REIT located in Denver, Colorado. The matter involved a short-and-distort case against Quinton Mathews, the previously anonymous author known as “Rota Fortunae,” of a defamatory article published on the financial website “Seeking Alpha” that drove down FPI's stock price by 39% in one day, allowing Mr. Mathews and his clients to profit from their short positions. As part of the settlement, Mathews <a href="https://seekingalpha.com/instablog/47800059-rota-fortunae/5605955-mathews-settlement-press-release" target="_blank">acknowledged publicly</a> that his July 2018 article was full of false statements, and Mathews made a payment that was multiples of the profits he made off the scheme. The case presented novel legal issues, including: unmasking an anonymous author in a defamation case; how to serve an anonymous party; how to remove to federal court without consent of unknown Doe defendants; the applicability of anti-SLAPP statutes in federal court; determining whether, and when, statutes of limitations run for anonymous parties, and resolving thorny questions of personal jurisdiction.The team representing FPI included Corporate Finance partner Justin Salon; Litigation partners Scott Llewellyn and Grant Esposito; and Securities Litigation partner Michael Birnbaum; with Litigation associates Shaelyn Dawson, Kyle Pietari, and Brenden Cline.Read FPI’s <a href="http://ir.farmlandpartners.com/News/news-details/2021/Rota-Fortunae-Author-of-July-2018-Attack-on-Farmland-Partners-Retracts-Short-and-Distort-Article-Admits-Articles-Falsity-and-Returns-Multiples-of-Trading-Profits-He-Gained-from-Attack/default.aspx" target="_blank">press release</a>.

Morrison & Foerster Secures Groundbreaking Result for Farmland Partners Inc. in Short-and-Distort Case

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Justin is chair of the firm’s Capital Markets practice and co-chair of Morrison Foerster’s REIT practice.Justin represents both issuers and underwriters in a wide variety of corporate and securities matters, including initial public offerings, primary and secondary offerings, private placements, senior and subordinated debt financings, and liability management transactions. In addition, he serves as primary outside counsel to numerous public company clients with respect to corporate governance issues, compliance with the U.S. federal securities laws, and the requirements of the New York Stock Exchange (NYSE) and NASDAQ, as well as general corporate matters.Justin is recognized as a leading lawyer in Chambers USA 2022 for REITs. He is recommended by The Legal 500 US 2022 for REITs, Capital Markets: Debt Offerings, Capital Markets: Equity Offerings, and M&A / Corporate and Commercial: Private Equity Buyouts. He is also a member of the firm’s global Environmental, Social, and Governance (ESG) steering committee.<h4>Representative Experience</h4><h5>Equity</h5><ul><li dir="ltr">Represented Arm Holdings plc, the world’s leading semiconductor IP company, in its blockbuster $5.22 billion USD IPO on Nasdaq, the largest IPO of 2023.</li></ul><ul><li>Represented Armada Hoffler Properties, Inc. (NYSE: AHH) in connection with multiple follow-on offerings of common stock and preferred stock and represented the underwriters in connection with Armada Hoffler’s initial public offering.</li><li>Represented Inovalon Holdings, Inc. (NASDAQ: INOV) in its initial public offering.</li><li>Represented RLJ Lodging Trust (NYSE: RLJ) in connection with its initial public offering.</li><li>Represented the underwriters in connection with Plymouth Industrial REIT’s initial public offering, multiple follow-on offerings of common stock, and issuance of perpetual preferred stock.</li><li>Represented the underwriters in connection with Community Healthcare Trust’s (NYSE: CHCT) initial public offering and numerous follow-on equity offerings.</li><li>Represented Farmland Partners, Inc. (NYSE: FPI) in its initial public offering, subsequent public offerings of common stock, and offering of 6.00% Series B Participating Preferred Stock.</li><li>Represented issuers or underwriters in connection with SPAC IPOs for Anzu Special Acquisition Corp I, Endurance Acquisition Corp., Pegasus Digital Mobility Acquisition Corp., Revelstone Capital Acquisition Corp., Science Strategic Acquisition Corp. Alpha, and Sound Point Acquisition Corp. I.</li><li>Represented Education Realty Trust (NYSE:EDR) in connection with multiple public offerings of common stock resulting in proceeds in excess of $1 billion.</li><li>Represented UDR, Inc. in connection with multiple follow-on equity offerings.</li><li>Represented the underwriters in connection with multiple registered offerings of preferred stock and common stock by Sotherly Hotels (NASDAQ: SOHO).</li><li>Represented Trade Street Residential, Inc. in its backstopped rights offering and corresponding PIPE.</li><li>Represented the underwriters in connection with Independence Realty Trust’s (NYSE: IRT) offering of common stock and concurrent listing on the NYSE.</li></ul><h5>Debt and Liability Management</h5><ul><li>As designated underwriters’ counsel to Royal Dutch Shell Plc, represented the underwriters in connection with registered offerings of more than $30 billion of fixed and floating rate notes by Shell International Finance, the U.S. financing subsidiary of Royal Dutch Shell Plc.</li><li>Represented the underwriters in connection with the registered offering of $5 billion of notes by Novartis Capital Corporation, the U.S. financing subsidiary of Novartis AG.</li><li>Represented Education Realty Trust (NYSE:EDR) in connection with multiple public offerings of debt securities resulting in proceeds in excess of $1 billion.</li><li>Represented ON Semiconductor Corporation (NASDAQ: ON) in its $500 million Rule 144A offering of 1.625% convertible senior notes, $805 million Rule 144A offering of its 0% convertible senior notes due 2027, and privately negotiated repurchase and exchange transactions for outstanding senior notes.</li><li>Represented Vontier Corporation (NYSE: VNT) in its $1.6 billion 144A offering of senior notes and its $1.6 billion registered exchange offer.</li><li>Represented Veeco Instruments Inc. (NASDAQ: VECO) in its $300 million 144A offering of 2.70% convertible senior notes and its $125 million Rule 144A offering of 3.75% convertible senior notes.</li><li>Represented Whole Foods Market, Inc. in its $1 billion Rule 144A/Regulation S offering of 5.200% senior notes due 2025 and subsequent registered exchange offer.</li><li>Represented the Commonwealth of the Bahamas in connection with its $100 million 144A sovereign debt offering.</li><li>Represented AutoZone, Inc. (NYSE: AZO) in connection with $1.55 billion of registered offerings of senior notes.</li><li>Represented Smithfield Foods, Inc. in its $1 billion offering of senior notes and concurrent tender offer for over $750 million of outstanding senior notes.</li><li>Represented WellPoint, Inc. (NYSE: WLP) in its $1.75 billion offering of senior notes.</li><li>Represented Aventine Property Group in connection with its $100 million private offering of convertible senior notes.</li><li>Represented the underwriters in connection with multiple registered offerings of senior notes by Sotherly Hotels (NASDAQ: SOHO).</li><li>Represented the placement agent in connection with the $50 million private offering of senior secured notes by Newport Realty Trust, a private mortgage REIT.</li><li>Represented the placement agent in connection with the private placement of $100 million aggregate principal amount of 6.75% senior unsecured notes due 2023 issued by MCREIF SubREIT, LLC, a private REIT managed by M360 Advisors, and fully and unconditionally guaranteed by M360 CRE Income Fund LP.</li><li>Represented the placement agent in connection with the private placement of $36.5 million aggregate principal amount of 7.5% senior unsecured notes due 2025 issued by NextPoint Real Estate Finance Operating Partnership, L.P., the operating partnership subsidiary of NexPoint Real Estate Finance, Inc. (NYSE: NREF).</li><li>Represented the placement agent in connection with the private placement of $42.25 million aggregate principal amount of its 7.00% senior unsecured notes due 2026 issued by Pelorus Fund REIT, LLC.</li></ul><h5>M&A</h5><ul><li>Represented Education Realty Trust in its $4.6 billion all-cash sale to a newly formed perpetual life vehicle led by an affiliate of Greystar Real Estate Partners.</li><li>Represented UDR, Inc. (NYSE: UDR) in connection with Home Properties, Inc.’s $7.6 billion acquisition by Lone Star Funds, in which UDR acquired six communities for approximately $908 million.</li><li>Represented Greenlane Holdings, Inc. (NASDAQ: GNLN), in its merger of equals with KushCo Holdings, Inc.</li><li>Represented Pivotal Investment Corp. II in connection with its merger with XL Fleet Corp., a leader in vehicle electrification solutions for commercial and municipal fleets.</li><li>Represented Farmland Partners, Inc. in connection with its stock-for-stock acquisition of American Farmland Company (NYSE: AFCO), as well as more than $400 million of property acquisitions.</li><li>Represented Trade Street Residential, Inc. in its acquisition by Independence Realty Trust, Inc.</li><li>Represented the Special Committee of the board of directors of Bluerock Residential Growth REIT in connection with the proposed internalization of its external manager.</li></ul>

Justin R. Salon

Partner

Scott Llewellyn’s practice focuses on complex litigation in federal and state courts around the country, with an emphasis on patent and trade secret disputes. Over the past decade, he has worked on some of the most significant, high–profile IP cases involving technology for televisions, smartphones, and self–driving cars, relying on 40 years of experience with computer hardware and software. Scott also has significant experience with business divorce cases before courts and arbitrators, involving a mix of trade secret, patent, tort, and contract claims relating to technology development and implementation.Scott also has successfully tried general commercial arbitration and agency matters, briefed and argued various appeals in federal appellate court, and tried more than 20 cases for the Denver City Attorney’s office, most of them jury trials.Scott also has an active pro bono practice, having worked on a variety of criminal and immigration appeals, and having represented Colorado criminal defense and mental health organizations in high–profile suits against the state of Colorado for violations of the constitutional rights of defendants.At MoFo, Scott serves on the board of the Morrison & Foerster Foundation. In the broader legal community, he serves on the boards of the Colorado Lawyers Committee and Drop in the Bucket (a charity that builds wells and sanitation systems in sub–Saharan Africa).After law school, Scott clerked for the Honorable Clarence A. Brimmer, District of Wyoming, and the Honorable Diarmuid F. O’Scannlain, Ninth Circuit. He was also previously an adjunct professor at the Georgetown University Law Center.

Scott F. Llewellyn

Grant J. Esposito is co-chair of the firm’s Commercial Litigation and Trial Group. A trial lawyer, Grant has extensive experience in complex commercial and class action litigation, including antitrust, life sciences, mass torts, product liability, securities, and transactional disputes.<h4>Litigation Approach</h4>Grant works with clients to identify pragmatic and cost-effective solutions to their challenging legal problems, crafting case strategies aligned with their business objectives and needs. He sees the big picture and focuses on the key issues at stake, enabling him to position clients for successful outcomes whether during motion practice, a settlement, or at trial. A client noted that Grant “understands from the beginning your strengths and weaknesses and is not afraid to tell you.”His legal acumen has been recognized by clients and leading publications in the field. He was named Litigator of the Week by The American Lawyer, IP MVP by Law360, and a Trailblazer in Intellectual Property Law by the National Law Journal. Grant has also been recognized in Chambers USA (New York – General Commercial Litigation), The Legal 500 US (Product Liability, Mass Tort and Class Action - Defense: Toxic Tort, Consumer Products, Pharmaceuticals, and Medical Devices; Dispute Resolution: Financial Services Litigation;), and Best Lawyers in America (New York – Product Liability Defendants).<h4>More About Grant</h4>Grant has served in several firm management roles, including as a member of the firm’s Compensation Committee, Executive Committee, and chair of the Global Litigation Department.<h4>Notable Matters</h4><ul><li>Bethpage Toxic Tort Litigation (Eastern District of New York). Trial counsel in a class action and individual cases alleging environmental contamination and toxic torts in excess of $1 billion. Advising client on related regulatory issues.</li><li>Brokop v. Farmland Partners Inc. (District of Colorado). Trial counsel for Farmland Partners—a real estate investment trust (REIT) traded on the New York Stock Exchange—and its CEO and CFO in securities class action.  Prevailed on summary judgment.</li><li>Farmland Partners Inc. v. Rota Fortunae (District of Colorado). Successfully prosecuted defamation claims against a short seller that launched a “short and distort” attack against our client. Favorable settlement included the author of a defamatory article recanting his false and misleading statements and paying multiples of his ill-gotten gains.</li><li>Venture Group Enterprises v. Vonage Business Inc. (Southern District of New York). Defending claims arising out of termination of agency agreement and prosecuting counterclaims.</li><li>State of New York v. Northrop Grumman (Eastern District of New York). Successfully resolved disputes over groundwater remedial plan and related claims brought by local water districts arising from legacy military production activities.</li><li>Visa v. Pennsylvania (Commonwealth Court of Pa). Prevailed on appeal of multi-million dollar tax assessment wrongfully denied as untimely by securing nunc pro tunc relief on the eve of trial.</li><li>Patterson et al v. Cabaletta Bio et al (Eastern District Pa). Defending client in putative securities class action.</li><li>Envision Healthcare Corp. et al v. United Healthcare Insurance Co. et al (Circuit Court Florida). Trial counsel to recover inadequate payments to healthcare providers.</li><li>Landmark Settlement for Adoptive and Foster Family Coalition of New York.  After more than ten years of litigation, we succeeded in significantly increasing the financial support provided to New York foster parents and creating structural changes to bring New York’s foster care rate system in compliance with federal law.   </li><li>State of New York, et al. v. Deutsche Telekom AG, et al. (Southern District of New York). Successfully defended Sprint and SoftBank in trial brought by multiple State Attorneys General seeking to block the T-Mobile-Sprint merger as anti-competitive.</li><li>Mosher v. DaVita Healthcare Partners (New York Commercial Division). Represented client in an escrow dispute and related matters arising from $4.2 billion acquisition. Settled on favorable terms.</li><li>Amgen Inc., et al. v. Sandoz Inc., et al. (Northern District of California). Designed a statutory construction strategy that defined the “patent dance” contained in the Biologics Price Competition and Innovation Act, which was affirmed by the U.S. Supreme Court.</li><li>United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund et al. v. Novartis Pharmaceuticals Corp., et al. (District of Massachusetts). Secured dismissal of a putative antitrust class action challenging patent settlement.</li><li>United States of America et al. v. Novartis AG, et al. (District of Massachusetts). Secured dismissal of a False Claims Act lawsuit alleging off-label marketing and a kickback scheme.</li><li>In re OxyContin Litigation (Southern District of New York). Trial counsel for Sandoz; prevailed on all patents.</li><li>In re Fletcher International Ltd. Secured dismissals in New York, Boston, and Louisiana for an auditor in an alleged Ponzi scheme seeking hundreds of millions in damages.</li><li>Frontier Insurance Group, Inc. v. Ernst & Young LLP (Southern District of New York). Won a unanimous jury defense verdict in an actuarial malpractice case seeking in excess of $200 million.</li><li>In re Sino-Forest Securities Litigation (Southern District of New York). Represented a Canadian auditor in securities fraud proceedings.  Settled on favorable terms.</li><li>Confidential Matters. Led arbitrations and other non-public proceedings involving regulatory investigations, merger litigation, breach of contract, professional services, and payor-provider disputes.</li></ul>

Grant J. Esposito

Michael Birnbaum is co-head of Morrison Foerster’s New York Litigation Department and a partner in the Securities Litigation, Enforcement, and White Collar Defense Group. Michael leverages his experience as former senior trial counsel at the U.S. Securities and Exchange Commission (SEC) to provide unique insights to U.S. and global financial institutions, including commercial and investment banks, audit and accounting firms, investment advisers, broker-dealers, and securities issuers facing internal and government investigations, regulatory enforcement proceedings, and private civil litigation.Specifically, Michael focuses on counseling clients on issues under state and federal securities laws. He has also represented clients in undergoing compliance reviews required by securities regulators, navigating complex regulatory landscapes, investigations, and litigations involving cryptocurrency investments and related platforms, and litigating contested bankruptcy proceedings in federal courts.A seasoned trial attorney, Michael has obtained significant results—including at trial—in matters in involving investment funds and other financial institutions concerning allegations of fraudulent securities offerings and registration violations, as well as supervisory failures related to the sale of securities. He has also achieved landmark settlements in advance of trial, including on behalf of Farmland Partners, Inc. in connection with their being the target of a short-and-distort attack arising from a defamatory article that drove down the company’s stock price by 39% in one day. As a result, Michael was recognized in The American Lawyer Litigation Daily’s “Litigators of the Week” feature, which highlights lawyers for breakthrough achievements in the nation’s most complex, highest-profile cases. He has also been recommended by leading legal rankings publications, including by The Legal 500 US in the “Securities Litigation: Defense” category.Michael is a thought leader in the securities litigation and securities enforcement space, regularly speaking on panels and publishing articles relating to trending topics in these areas. Most recently, Michael was appointed to the editorial board of Wall Street Lawyer.Before Morrison Foerster, Michael served in the SEC for 11 years, most recently as senior trial counsel, which informs his extensive experience overseeing securities litigation before federal and administrative courts. Throughout his tenure at the SEC, Michael worked closely with SEC investigative units, including the Asset Management Unit, the Market Abuse Unit, and the Complex Financial Instruments Unit, as well as with attorneys at various U.S. Attorney’s Offices, the Manhattan District Attorney’s Office, and foreign securities regulators on securities-related investigations and prosecutions.<h4>Selective Significant Representations</h4>Farmland Partners, Inc.<ul><li>Achieved a landmark settlement for Farmland Partners Inc. (FPI), a publicly traded farmland REIT, in a “short-and-distort” case that was prompted by a defamatory article that drove down FPI’s stock price by 39% in one day. The previously anonymous author, who wrote under the alias “Rota Fortunae,” and his clients utilized the scheme to profit from their short positions. As part of the settlement, the author acknowledged publicly that his article was full of false statements, and made a payment that was multiples of the profits he made off the scheme. Meanwhile, FPI prevailed on its defense of a class action accusing the company and principals of securities fraud.</li></ul>A Major Pharmaceutical Company<ul><li>Successfully convinced SEC not to pursue an action against pharmaceutical company following investigation into the company’s FDA-related disclosures.</li></ul>A Multinational Electronics Company<ul><li>Representation in an SEC FCPA investigation involving conduct in Latin America related to a business relationship with a company that was subsequently involved in a government corruption scandal.</li></ul>Investors in Cryptocurrency<ul><li>Advise clients regarding litigation and regulatory investigations in connection with initial coin offerings and related transactions.</li></ul>Special Purpose Acquisition Companies (SPACs)<ul><li>Represent SPACs, sponsors, and other investors in SEC investigations regarding various SPACs’ initial public offerings and de-SPAC transactions, and counsel clients engaging in such transactions regarding regulatory and litigation risks.</li></ul>Leading Crowdfunding Entity<ul><li>Representation in providing compliance advice and counsel in connection with FINRA inquiries arising from alleged unregistered securities offerings and disclosure issues.</li></ul>An International Broker-Dealer<ul><li>Representation in responding to FINRA and SEC inquiries related to the treatment of domestic and international client accounts.</li></ul>

Michael D. Birnbaum

Shaelyn Dawson is an attorney in the litigation department, with a focus on intellectual property. Shaelyn represents clients in technical and high-stakes litigation, focusing primarily on patent, copyright, and trade secret cases in the electronics, semiconductor, and pharmaceutical industries. She has experience in all phases of litigation. She has coordinated large-scale fact and expert discovery, taken and defended dozens of fact and expert depositions, drafted and argued motions in multiparty litigation in federal courts across the country, and been a key member of six trial teams, where she questioned fact and expert witnesses.In addition to her intellectual property work, Shaelyn also maintains an active pro bono practice, and has been awarded the Wiley W. Manuel Certificate for Pro Bono Legal Services by the State Bar of California for the last two years. She has worked on several Section 1983 civil rights trials.Shaelyn received her J.D. from Fordham University School of Law in 2012 where she had a merit scholarship. While at Fordham, she served as the Senior Articles Editor for the Fordham International Law Journal. She received her LL.M. (Intellectual Property) from New York University School of Law in 2013.Prior to joining Morrison and Foerster, Shaelyn served in a two-year term as a clerk to the Honorable Evan Wallach of the U.S. Court of Appeals for the Federal Circuit.Shaelyn is admitted to practice law in California and before the Federal Circuit.

Shaelyn Dawson

Litigation

Securities Litigation