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Q&A With Carlton Fields' Sam Salario

Sam SalarioLaw360, New York (May 06, 2013, 5:29 PM ET)  Sam J. Salario Jr. is a shareholder in Carlton Fields’ Tampa office specializing in securities litigation and class actions. His clients include financial institutions, broker-dealers, public companies, and public company directors and officers. Salario represents clients in class actions under the federal securities laws, class actions challenging public company mergers and acquisitions, shareholders’ derivative actions, and individual actions implicating the securities laws and the securities industry. He also handles criminal, regulatory and internal investigations. Salario’s practice also involves work on consumer class actions under both federal and state laws.

Q: What is the most challenging case you have worked on and what made it challenging?

A: At the beginning of the real estate market collapse, I began representing a bank holding company that had just announced a major problem in its loan portfolio. It was a complete surprise to management, to say nothing of the rest of the world. In a very short time, the client faced investigations from the DOJ, the SEC, and federal and state bank regulators, as well as lawsuits filed by stockholders and borrowers. The press was intense and negative.

The case was challenging because it was a crisis environment. Every day brought a new issue or problem about which judgments had to be made with little or no time to reflect. The various regulatory bodies had very different agendas, which were often in conflict. Maybe more significant, though, was that the people managing the crisis inside the client had gone from an environment of calm and normalcy one day to the complete opposite the next. I learned a lot about managing a legal response to a crisis, but the lessons about how humans respond to crisis were also very valuable.

Q: What aspects of your practice area are in need of reform and why?

A: Shareholder litigation over public company M&A transactions needs attention. Data published by Cornerstone Research showed that in 2011 shareholder class actions were filed on 91 percent of public-target M&A transactions valued at over $100 million and 95 percent of transactions worth more than $500 million. It is not conceivable to me that more than 90 percent of public M&A deals are the product of a breach of fiduciary duty by the seller’s board. My experience is that judges do not think this is true. Yet these claims are filed frequently, and many are settled out of concern that the shareholder might get an injunction halting the transaction.

Q: What is an important issue or case relevant to your practice area and why?

A: The interplay between securities and corporate litigation and a state-federal political system is interesting. For example, the Securities Uniform Standards Act of 1998 has generated a lot of litigation concerning the extent of federal preemption of class actions involving nationally traded securities. The Supreme Court recently granted certiorari in a case that will decide the extent to which that extends to other instruments like CDs — as to which state class action litigation would not generally be preempted — that are represented to be backed by public securities. Although corporate governance is classically the province of state law, Sarbanes-Oxley and Dodd-Frank, among other things, have sparked discussion about slow federalization in that area. The tension between the efficiency offered by a concentrated system of regulation and a political system of dual sovereigns will continue to generate important litigation over the role of state law in securities cases.

Q: Outside your own firm, name an attorney in your field who has impressed you and explain why.

A: Peter Vigeland and Fraser Hunter at WilmerHale in New York. Their knowledge of securities and corporate litigation and top-quality advocacy in court is really incredible. I have been lucky to get to learn from them both as a younger lawyer at Wilmer and on other matters over time.

Q: What is a mistake you made early in your career and what did you learn from it?

A: I was very risk-averse as a younger lawyer, and always concerned about leading colleagues or clients to an embarrassing or harmful result. That instinct is wrong because there are no sure answers to complex problems, and clients need the benefit of creative thinking. I have shed my concern about pursuing aggressive or atypical solutions to advance client interests, and make sure that I identify and mitigate risk as best I can.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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