Illinois Securities and Commodities Fraud Attorney Peter J. Berman


Litigation as a Government Attorney

While employed as a trial attorney for the CFTC's Division of Enforcement, Mr. Berman represented the Commission before the U.S. District Court for the Northern District of Illinois in an action against the Hunt family for alleged violations of the Commission's speculative position limits. The trial lasted three months and resulted in the entry of an injunction against the defendants. Mr. Berman was also responsible for prosecuting various companion claims against the Hunts in administrative proceedings before the Commission. A settlement was reached with the defendants that included substantial fines, a cease and desist order and other sanctions. Mr. Berman received a Special Achievement Award from the Commission for the work he did in connection with the trial before the District Court.

Securities Class Action Defense

Mr. Berman defended a bank and several of its officers and directors in a class action brought on behalf of customers who purchased a series of bonds that were sold to construct nursing homes. The bank had acted as paying agent and as trustee for several of the bond offerings. The class claimed that the bank intentionally violated our nation's securities laws. The bank was thinly capitalized and was in danger of becoming insolvent. There were other defendants in the case, including an insurance company with substantial resources. The bank and its officers were covered by a 5 million dollar directors' and officers' liability policy, but the insurance company claimed that the alleged wrongdoing fell within the policy's exclusion for dishonest acts. The class was seeking a judgment in excess of 13 million dollars.

Mr. Berman pursued a three-part strategy. He filed a motion for judgment on the pleadings alleging that the claims were inadequate as a matter of law. Based upon this motion and the unsettled state of the law, Mr. Berman convinced counsel for the class to reduce their settlement demand to 3.2 million dollars. At the same time, he was able to convince counsel for the insurance company that issued the directors' and officers' liability policy that if the case did not settle there would be a grave danger that a judgment could be entered against the bank and its officers and directors for an amount substantially in excess of the policy limits. Mr. Berman then made it clear that if the insurance company failed to fund the settlement, it would be exposed to a claim of bad faith where it might have to pay an amount that could exceed 13 million dollars. Ultimately, the insurance company agreed to pay 2.7 million dollars towards the settlement. Finally, Mr. Berman persuaded counsel for the defendant insurance company and other defendants to pay $300,000 toward the settlement. This only left $200,000 for the bank to contribute. The case settled and the bank remains a viable institution today.

Commodities Litigation

Mr. Berman represented an individual defendant in an action brought by a brokerage firm in the U.S. District Court for Southern District of New York. The brokerage firm claimed that his client was responsible for substantial losses that resulted from trading Treasury Bond ("T-Bond") futures contracts and options on T-Bond futures contracts. Mr. Berman's client had deposited substantial sums in his account along with stock certificates as collateral for trading to be done in his account. The brokerage firm threatened to liquidate his client's stock and use the funds and the cash deposited in the account to offset the trading losses that had been sustained. Mr. Berman filed a counterclaim on behalf of his client against the brokerage firm and its parent company for common law fraud, breach of fiduciary duty, violations of the Commodity Exchange Act, and the Racketeer Influenced and Corrupt Organizations Act. The alleged wrongdoing involved misrepresentations about the extent of the margin required and the nature of the risks that would be assumed from the trades that were recommended by the brokerage firm. After conducting extensive discovery, where additional evidence of the broker's fraud was uncovered, the case proceeded to trial. After selecting a jury, the case settled. The brokerage firm agreed to: (a) release Mr. Berman's client from all responsibility for the trading losses, (b) return his client's stock, and (c) pay his client an amount equal to threetimes the amount of the cash that had been deposited in his client's account.

Arbitration of Customer Disputes and Employment Matters in the Securities Industry

Mr. Berman has represented numerous parties successfully in cases that were arbitrated before the NASD, NFA, AAA, and various exchanges throughout the country. These cases include customer complaints, disputes between brokerage firms and employment disputes between brokerage firms and senior mangers who left their firms. The cases arbitrated before the AAA cover a wide array of business disputes outside the securities and commodities industries. In one case, Mr. Berman represented an Introducing Broker ("IB") before the NFA where 39 customers brought separate claims against the IB based on the same alleged acts. Mr. Berman persuaded teh NFA to consolidate the cases for the purpose of determining whether a one-year contractual period of limitations in the parties' Customer Agreement prevented the prosecution of the claims. He then persuaded the panel that was formed for this purpose that the one-year period of limitations was valid and that all 39 cases should be dismissed.

Disciplinary Matters Before Various Exchanges and other Self-Regulatory Bodies

Mr. Berman also represents clients before the SEC, CFTC, NASD, NFA, New York Stock Exchange, American Stock Exchange, Chicago Mercantile Exchange, and Chicago Board of Trade at disciplinary hearings.

Raiding Cases

Mr. Berman also represents individuals and firms in cases involving alleged violations of a non-compete agreements, non-solicitation agreements, and confidentiality agreements, or where a plaintiff has claimed that a defendant breached fiduciary duties or misappropriatedtrade secrets in connection with moving from one firm to another. These cases require immediate attention and substantial skill because of the fast-paced nature of the litigation and the customer relationships that weigh in the balance.

Chancery Actions and Mediation

Mr. Berman has represented various parties in chancery actions involving the dissolution of partnerships and closely held corporations and disputes between commercial landlords and their tenants. The partnership and corporate matters focused largely on accounting issues and the fiduciary duties partners and shareholders owe to one another when they have decided to terminate their business relationships.

Testimony as an Expert Witness

Mr. Berman has testified as an expert witness in a Canadian court on behalf of an investment company where there were disagreements about the scope of U.S. commodities laws. The case lasted for several years requiring frequent consultation with the investment company's counsel in Toronto, Canada. Mr. Berman also worked closely with the accountants who also testified as expert witnesses at trial. The investment company prevailed at trial.

Publications and Speaking Engagements

Mr. Berman has been asked to speak at seminars devoted to securities and commodities laws. Since Mr. Berman believes that substantial benefits can be obtained from the mediation of business disputes, he has written articles and spoken at various seminars on the subject. A list of those contributions to his profession is found below.

Areas of Practice:


Bar Admissions:

Illinois, 1974
U.S. District Court Northern District of Illinois, 1974
U.S. Court of Appeals 7th Circuit, 1975
U.S. Supreme Court, 1979

Education:

DePaul University College of Law, Chicago, Illinois, 1974
J.D.
Honors: Cum Laude
Law Review: DePaul University Law Review, Member, 1973 - 1974

University of Wisconsin, Madison, WI, 1968
B.A.
Major: Psychology

Published Works:

"How to Resolve Business Disputes Without Going Broke", Altschular, Melvoin & Glasser Ledger, Summer, 1994
"Solving Disputes Without Litigation", Shopping Centers Today, May, 1994
"The Attorney/Client Privilege & the IRS: Assessing the Currency Transaction Reporting Regulations", Illinois Bar Journal, Vol. 77, No. 10 530, June, 1989
"Resolving Business Disputes Through Mediation and Arbitration", The CPA Journal, November, 1994
Alternative Fee Agreements With Counsel", The CPA Journal, December, 1994
"Section 17 Registered Futures Associations" (co-author with Weiner), Journal of Futures Markets, Vol. 1, 1981 Supp., 1981
"Mediation and Arbitration", The American Institute of Certified Public Accountants, The Management of an Accounting Practice Handbook, Chapter 214, Section 7, May, 1997

Honors and Awards:

Certificate of Appreciation for Outstanding Service From Commodity Futures Trading Commission, 1978

Professional Associations and Memberships:

Chicago Bar Association, 1978 - Present
Member, Futures Regulation Committee
Chairman, Litigation Sub-Committee
Member, Securities Law Committee
Member, Professional Responsibility Committee

American Bar Association, Business Law Section, 1979 - Present
Member, Futures and Derivatives Law Committee
Member, Business Torts Subcommittee

Arbitrator for National Futures Association

Fraternities/Sororities:

Pi Lambda Phi, University of Wisconsin

Birth Information:

June 10, 1946, New York, New York, United States of America