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AZA Wins Sanctions Order Against Wells Fargo in Securities Fraud Lawsuit
July 11, 2016

NEW YORK – A federal judge in New York has sanctioned Wells Fargo Securities LLC for failing to comply with an order in March to produce documents and witnesses for depositions in the securities fraud suit brought by European bank LBBW Luxemburg S.A.

The sanctions order is the latest win achieved by lawyers with the Houston complex commercial litigation firm Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., or AZA. The ruling was issued July 7 by U.S. Magistrate Judge Kevin Nathaniel Fox of the Southern District of New York.

The judge ordered Wells Fargo Securities to produce certain trade tickets, profit and loss reports, and other documents involving GAII collateralized debt obligations by July 15, with daily fines accruing after that. The judge also ordered that two witnesses be made available for deposition by Aug. 5 and that the defendants pay LBBW’s attorneys’ fees associated with the depositions.

“We have tried for over a year to obtain these key documents, which are important to showing one of the avenues by which defendants in our case defrauded our client LBBW – by implementing an internal strategy to short securities and underlying collateral in the very collateralized debt obligation they were representing and selling to our client as a safe investment,” says AZA lawyer David Warden. Firm attorneys Joseph Ahmad, John Zavitsanos, Megan Bibb and Mark Holden also are assisting in the case.

The lawsuit stems from a 2006 deal in which Wells Fargo sold $40 million in securities that defendants knew were overvalued and riskier than represented. The securities were collateralized by subprime residential mortgages that quickly defaulted.

The lawsuit, seeking more than $40 million in damages, is LBBW Luxemburg S.A. v. Wells Fargo Securities LLC, et al., No. 12-CV-7311. It was filed in the U.S. District Court for the Southern District of New York in 2012.

Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., or AZA, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, intellectual property, and business dispute cases. AZA is recognized in Chambers USA 2016 among the best in Texas commercial law; U.S. News & World Report and The Best Lawyers in America as one of the country’s best commercial litigation firms in 2016; and Law360 as one of only 13 Texas Powerhouse law firms. National corporate counsel named AZA one of the country’s best in client service among law firms serving the Fortune 1000. Read more at https://www.azalaw.com.

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