In December 2015, I wrote here about the extreme difficulties that Australian plaintiffs' law firm Slater & Gordon -- the world’s first publicly-traded law firm -- was experiencing. Ominously, other rival plaintiffs' law firms were then reportedly "monitoring the chaos to decide whether there is a case for a shareholder class action against the company." I wondered: might the traditions of professional courtesy between lawyers save Slater & Gordon from actually being on the receiving end of a securities class action? 


Nope! Shortly after I wrote about Slater & Gordon in December 2015, the stock price plunged even further. On Feb 29, 2016, following the company's release of poor earnings, its shares dropped almost 60% in 2 days. The law firm's stock price, which stood at $7.85 AUD per share in April 2015, now sells for just $0.28 AUD per share (i.e., approx. $0.20 US). On October 12, 2016, shark bit shark when Australian law firm Maurice Blackburn announced that it had, in fact, filed a securities class action against Slater & Gordon. 

The lawsuit on behalf of "3000 aggrieved participants" alleges that the 95% decline in Slater & Gordon's stock price between April 2015 and February 2016 cost shareholders more than $2 billion. It claims that Slater & Gordon "made false and misleading statements, engaged in misleading and deceptive conduct, and/or breached its continuous disclosure obligations to shareholders which prevented shareholders from being able to make informed investment decisions based on complete, accurate, and timely information about the Quindell acquisition and the true state of the company’s overall financial position and performance." Maurice Blackburn's Andrew Watson stated that the case would be one of Australia's largest shareholder class actions given the "sheer scale of the alleged wrongdoing, its impact on the share price and the number of shareholders affected...."  

This week, the Australian press reported that "distressed loan specialist Anchorage Capital Group" had acquired a portion of Slater & Gordon's debt that had previously been held by Citigroup. According to the Sydney Morning Herald, this development has "sparked speculation that the way is being paved for a potential rescue of the company next year."