On August 2, 2010, the Honorable Gustavo A. Gelpi of the United States District Court for the District of Puerto Rico dismissed as untimely claims under Sections 11 and 12(a)(2) of the Securities Act of 1933 against Shearman & Sterling's clients, UBS Financial Services Incorporated, Citigroup Global Markets, Inc. and Popular Securities Inc., in a litigation arising from alleged accounting violations in financial statements filed by Popular, Inc. (commonly known as Banco Popular). The case is Hoff v. Popular, Inc., No. 09-1428 (D.P.R. Aug. 2, 2010).

The firm's clients were the underwriters in a preferred stock offering by Popular in May 2008. Plaintiffs alleged that the company's financial statements for FY 2007 and certain quarters of 2008 were materially misstated because applicable GAAP rules required Popular to take a valuation allowance against certain deferred tax assets accumulating from the company's operating losses that was not taken.

Shearman & Sterling's motion to dismiss argued that the claims against UBS, Popular Securities and Citigroup were untimely because the one-year statute of limitations began to run in May 2008, when the offering documents were filed. The court agreed, dismissing both the Section 11 and Section 12(a)(2) claims.

The litigation team working on the motion to dismiss consisted of partner Herb Washer (New York-Litigation), associates Daniel Lewis (New York-Litigation) and Mallory Tosch (New York-Litigation), and New York-based legal assistants Jill Aberbach and Karen Prosky.