Lowenstein Securities Lawyer Group Exits to Launch New Firm

The chair of Lowenstein Sandler’s securities litigation practice and nine of his colleagues are leaving to form a separate firm, according to representatives for Lowenstein and two sources close to the new firm.

Lawrence Rolnick and a number of colleagues are leaving the firm in what is being called a friendly split. They include securities litigators Marc Kramer and Sheila Sadighi, who are jumping to the new firm, the sources said. Thomas Redburn has been named the new chair of Lowenstein’s practice, according to the firm.

“We have practiced together with Larry for close to 30 years and all look forward to continuing our warm, collaborative relationship with our colleagues who are forming this new venture,” Lowenstein Chairman Gary Wingens told Bloomberg Law. “We wish them great success.”

The sources associated with the new firm spoke on condition of anonymity because the departures had not been publicly announced and some clients have not been notified of the moves.

Lowenstein’s securities practice represents professional investors who have suffered losses from alleged securities fraud. The practice has represented Appaloosa Management, Franklin Mutual Advisers and H.R. Huff Management Co., as well as recovering claims arising from the Adelphia securities scandal.

The practice also represented Franklin Templeton Investments in an action against American International Group Inc. for securities fraud involving allegations that AIG inflated its earnings and paid illegal commissions in a scheme involving rigging bids. The matter was eventually settled.

The split, which is said to be friendly, stems from differences over the traditional billable hour model and the growing trend toward alternative fee setting arrangements, according to the sources. The new entity will be in effect as of Sept. 1.