Skip to Main Content

Richard A. Russo, Jr.

Partner

D   484.270.1445
F   610.667.7056

Richard A. Russo, Jr., a partner of the Firm, concentrates his practice in the area of securities litigation, and principally represents the interests of plaintiffs in class actions and complex commercial litigation.

Rick specializes in prosecuting complex securities fraud actions arising under the Securities Exchange Act of 1934 and the Securities Act of 1933, and has significant experience in all stages of pre-trial litigation, including drafting pleadings, litigating motions to dismiss and motions for summary judgment, conducting extensive document and deposition discovery, and appeals.

Rick has represented both institutional and individual investors in a number of notable securities class actions. These matters include In re Bank of America Securities Litigation, where shareholders’ $2.43 billion recovery represents one of the largest recoveries ever achieved in a securities class action and the largest recovery arising out of the 2008 subprime crisis; In re Citigroup Inc. Bond Litigation, where the class’s $730 million recovery was the second largest recovery ever for claims brought under Section 11 of the Securities Act of 1933; and In re Lehman Brothers, where shareholders recovered $616 million from Lehman’s officers, directors, underwriters and auditors following the company’s bankruptcy filing.

Rick is currently representing shareholders in high-profile securities fraud actions against General Electric, Precision Castparts Corp., Kraft Heinz Corp. and Luckin Coffee Co. Rick has also assisted in prosecuting whistleblower actions and patent infringement matters.

In 2016, Rick was selected as an inaugural member of Benchmark Litigation’s Under 40 Hot List, an award meant to honor the achievements of the nation’s most accomplished attorneys under the age of 40. Rick was again selected as a member of the 40 & Under Hot List in 2018, 2019, and 2020. Rick has also been selected by his peers as a Pennsylvania Super Lawyers Rising Star on five occasions.

Awards/Rankings

  • Benchmark Litigation Star, 2025
  • Benchmark Future Star, 2020 & 2021
  • Benchmark Litigation Under 40 Hot List, 2020
  • Benchmark Litigation Under 40 Hot List, 2016
  • Pennsylvania Super Lawyers Rising Star, 2012-2016

Experience

Current Cases

  • This securities fraud class action case arises out of alleged misrepresentations made by General Electric (“GE”) and its former Chief Financial Officer, Jeffrey S. Bornstein (together, “Defendants”), regarding the use of factoring to conceal cash flow problems that existed within GE Power between March 2, 2015, and January 24, 2018 (the “Class Period”).

    GE Power is the largest business in GE’s Industrials operating segment. The segment constructs and sells power plants, generators, and turbines, and also services such assets through long term service agreements (“LTSAs”). In the years leading up to the Class Period, as global demand for traditional power waned, so too did GE’s sales of gas turbines and its customer’s utilization of existing GE-serviced equipment.  These declines drove down GE Power’s earnings under its LTSAs associated with that equipment.  This was because GE could only collect cash from customers when certain utilization levels were achieved or upon some occurrence within the LTSA, such as significant service work.

    Plaintiffs allege that in an attempt to make up for these lost earnings, GE modified existing LTSAs to increase its profit margin and then utilized an accounting technique known as a “cumulative catch-up adjustment” to book immediate profits based on that higher margin.  In most instances, GE recorded those cumulative catch-up earnings on its income statement long before it could actually invoice customers and collect cash under those agreements. This contributed to a growing gap between GE’s recorded non-cash revenues (or “Contract Assets”) and its industrial cash flows from operating activities (“Industrial CFOA”).  

    In order to conceal this increasing disparity, Plaintiffs allege that GE increased its reliance on long-term receivables factoring (i.e., selling future receivables to GE Capital, GE’s financing arm, or third parties for immediate cash).  Through long-term factoring, GE pulled forward future cash flows, which it then reported as cash from operating activities (“CFOA”).  GE relied on long-term factoring to generate CFOA needed to reach publicly disclosed cash flow targets.  Thus, in stark contrast to the true state of affairs within GE Power—and in violation of Item 303 of Regulation S-K—GE’s Class Period financial statements did not disclose material facts regarding GE’s factoring practices, the true extent of the cash flow problems that GE was attempting to conceal through receivables factoring, or the risks associated with GE’s reliance on factoring. 

    Eventually, however, GE could no longer rely on this unsustainable practice to conceal its weak Industrial cash flows.  As the truth was gradually revealed to investors—in the form of, among other things, disclosures of poor Industrial cash flows and massive reductions in Industrial CFOA guidance—GE’s stock price plummeted, causing substantial harm to Plaintiffs and the Class.

    In January 2021, the Court sustained Plaintiffs’ claims based on allegations that GE failed to disclose material facts relating its practice of and reliance on factoring, in violation of Item 303, and affirmatively misled investors about the purpose of GE’s factoring practices. In April 2022, following the completion of fact discovery, the Court granted Plaintiffs’ motion for class certification, certifying a Class of investors who purchased or otherwise acquired GE common stock between February 29, 2016 and January 23, 2018.  In that same order, the Court granted Plaintiffs’ motion for leave to amend their complaint to pursue claims based on an additional false statement made by Defendant Bornstein.  The Court had previously dismissed these claims but, upon reviewing Plaintiffs’ motion—based on evidence obtained through discovery—permitted the claim to proceed.

    On September 28, 2023, the Court entered an order denying Defendants’ motion for summary judgment, sending Plaintiffs’ claims to trial. In March 2024, the Court denied Defendants’ motion for reconsideration of its summary judgment decision. With trial set to begin in November 2024, in October, the parties agreed to resolve the matter for $362.5 million, pending the Court’s approval.

    Read Fifth Amended Consolidated Class Action Complaint Here

    Read Opinion and Order Granting and Denying in Part Motion to Dismiss Here

    Read Order Granting Motion for Class Certification and for Leave to Amend Here

    Click Here to Read the Class Notice

    Read Opinion and Order Here (9/28/23)

    Read Memorandum Opinion & Order Here (3/21/24) 

  • This securities fraud class action arises out of Defendants’ dissemination of materially false or misleading statements regarding the effect of new online gambling regulations in Germany on Paysafe’s revenues during the lead up to Paysafe’s De-SPAC merger agreement with SPAC Foley Trasimene Acquisition Corp. II (“FTAC”), and beyond.

    On May 16, 2024, Lead Plaintiffs filed a 72-page complaint (“Complaint”) on behalf of a putative class of investors who purchased Paysafe and/or FTAC common stock between December 7, 2020 and November 11, 2021 (the “Class Period”), alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

    Paysafe is a Bermuda-based company that operates a payment processing network for both individuals and businesses. Unlike some of their main competitors, Paysafe’s payment processing network is also available for use with online gambling. One of the world’s largest online payment processors, Paysafe boasts “1,000 operators” in regions outside of the U.S. and Canada, including the Company’s largest European market, Germany. Paysafe’s revenues in the region were particularly fueled by “high roller” users spending large, per month amounts on online gambling services.

    In March 2020, German lawmakers had finalized updates to the country’s online gambling laws that would take force in July 2021. Of crucial importance to Paysafe, German legislators limited gamblers’ spending to €1,000 per month across all gambling websites.

    On December 7, 2020, Paysafe and FTAC announced a merger agreement that would allow Paysafe to go public without undertaking a formal IPO process.  Rather than alert prospective investors to the fact the €1,000 per month limit would hurt the Company’s revenues in its all-important German market, the Defendants proclaimed the forthcoming regulations as a positive development, that showed that Germany was not seeking an outright prohibition on online gambling practices. Based on the Defendants’ misleading statements and omissions about Paysafe’s expected revenue as a result of Germany’s new regulations, FTAC’s shareholders voted in favor of the merger on March 25, 2021.  The Defendants continued to disseminate false and misleading statements about Paysafe’s revenues in the months after the merger was closed on March 30, 2021.

    As alleged in the Complaint, as a result of the new German regulations, on August 16, 2021, Paysafe reported to investors that it was lowering its revenue guidance for the third quarter, which began on July 1, 2021—the same day the new German regulations took effect. The new guidance lowered expected revenue for the third quarter between $14 and $29 million below market consensus. Still, the Defendants claimed this was due to “softness” in the European market, rather than the effect of the new German regulations. It was not until the Company announced the results for the third quarter on November 11, 2021 that the Defendants admitted to investors what it knew all along, which was that the new gambling regulations were going to have a materially negative impact on the Company’s revenues. In a twitter post that day, Defendant Dawood admitted that Paysafe had in fact been anticipating the negative effect that the amended German regulations would have on the Paysafe. In spite of this knowledge, throughout the Class Period, Defendants continued to make and disseminate false and misleading statements, downplaying and ignoring the effects of the new regulations, to ensure that the merger of the two companies was consummated and the stock of the Company remained inflated thereafter. Through the Complaint, Lead Plaintiffs seek to recover damages suffered by investors in FTAC and Paysafe during the Class Period.

    Defendants are scheduled to respond to the Complaint on or before July 15, 2024.

  • CASE CAPTION  Charles Larry Crews, Jr., et al. v. Rivian Automotive Inc., et al.
    COURT United States District Court for the Central District of California Western Division
    CASE NUMBER 2:22-cv-0524
    JUDGE Honorable Josephine L. Staton
    PLAINTIFFS Sjunde AP-Fonden, James Stephen Muhl
    DEFENDANTS Rivian Automotive, Inc. (“Rivian” or the “Company”), Robert J. Scaringe, Claire McDonough, Jeffrey R. Baker, Karen Boone, Sanford Schwartz, Rose Marcario, Peter Krawiec, Jay Flatley, Pamela Thomas-Graham, Morgan Stanley & Co. LLC, Goldman Sachs & Co., LLC, J.P. Morgan Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Allen & Company LLC, BofA Securities, Inc., Mizuho Securities USA LLC, Wells Fargo Securities, LLC, Nomura Securities International, Inc., Piper Sandler & Co., RBC Capital Markets, LLC, Robert W. Baird & Co. Inc., Wedbush Securities Inc., Academy Securities, Inc., Blaylock Van, LLC, Cabrera Capital Markets LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Samuel A. Ramirez & Co., Inc., Siebert Williams Shank & Co., LLC, and Tigress Financial Partners LLC.
    CLASS PERIOD November 10, 2021 through March 10, 2022, inclusive

    This securities fraud class action case arises out of Defendants’ representations and omissions made in connection with Rivian’s highly-anticipated initial public offering (“IPO”) on November 10, 2021. Specifically, the Company’s IPO offering documents failed to disclose material facts and risks to investors arising from the true cost of manufacturing the Company’s electric vehicles, the R1T and R1S, and the planned price increase that was necessary to ensure the Company’s long-term profitability. During the Class Period, Plaintiffs allege that certain defendants continued to mislead the market concerning the need for and timing of a price increase for the R1 vehicles. The truth concerning the state of affairs within the Company was gradually revealed to the public, first on March 1, 2022 through a significant price increase—and subsequent retraction on March 3, 2022—for existing and future preorders. And then on March 10, 2022, the full extent Rivian’s long-term financial prospects was disclosed in connection with its Fiscal Year 2022 guidance. As alleged, following these revelations, Rivian’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.

    On July 22, 2022, Plaintiffs filed a Consolidated Class Action Complaint on behalf of a putative class of investors alleging that Rivian, and its CEO Robert J. Scaringe (“Scaringe”), CFO Claire McDonough (“McDonough”), and CAO Jeffrey R. Baker (“Baker”) violated Sections 10(b) and 20(a) of the Securities Exchange Act. Plaintiffs also allege violations of Section 11, Section 12(a)(2), and Section 15 of the Securities Act against Rivian, Scaringe, McDonough, Baker, Rivian Director Karen Boone, Rivian Director Sanford Schwartz, Rivian Director Rose Marcario, Rivian Director Peter Krawiec, Rivian Director Jay Flatley, Rivian Director Pamela Thomas-Graham, and the Rivian IPO Underwriters. In August 2022, Defendants filed motions to dismiss, which the Court granted with leave to amend in February 2023. On March 16, 2023, Defendants filed motions to dismiss the amended complaint. In July 2023, the Court denied Defendants’ motions to dismiss the amended complaint in its entirety. Thereafter, on December 1, 2023, Plaintiffs moved for class certification. Following the parties’ briefing on the motion, on July 17, 2024 the Court granted Plaintiffs’ motion for class certification. The case remains in fact discovery.

    Read Notice of Pendency of Class Action Here

    Read Consolidated Class Action Complaint Here

    Read Amended Consolidated Class Action Complaint Here

  • This securities fraud class action arises out of representations and omissions made by former executives of Signature Bank (“SBNY” or the “Bank”) and the Bank’s auditor, KPMG, about the Bank’s emergent risk profile and deficient management of those risks that ultimately caused the Bank to collapse in March 2023. The Bank’s collapse marked the third largest bank failure in U.S. history, and erased billions in shareholder value.  

    As is alleged in the Complaint, SBNY had long been a conservative New York City-centric operation serving real estate companies and law firms. Leading up to and during the Class Period, however, the individual Defendants pursued a rapid growth strategy focused on serving cryptocurrency clients. In 2021, the first year of the Class Period, SBNY’s total deposits increased $41 billion (a 67% increase); cryptocurrency deposits increased $20 billion (constituting over 25% of total deposits); and the stock price hit record highs. Defendants assured investors that the Bank’s growth was achieved in responsible fashion—telling them that the Bank had tools to ensure the stability of new deposits, was focused on mitigating risks relating to its growing concentration in digital asset deposits, and was performing required stress testing. 

    Unknown to investors throughout this time, however, Defendants lacked even the most basic methods to analyze the Bank’s rapidly shifting risk profile. Contrary to their representations, Defendants did not have adequate methods to analyze the stability of deposits and did not abide by risk or concentration limits. To the contrary, deposits had become highly concentrated in relatively few depositor accounts, including large cryptocurrency deposits—an issue that should have been flagged in the Bank’s financial statements. The Bank’s stress testing and plans to fund operations in case of contingency were also severely deficient. The Bank’s regulators communicated these issues directly to Defendants leading up to and throughout the Class Period—recognizing on multiple occasions that Defendants had failed to remedy them. 

    Investors began to learn the truth of Defendants’ misrepresentations and omissions of material fact as widespread turmoil hit the cryptocurrency market in 2022, resulting in deposit run-off and calling into question SBNY’s assessment and response to the cryptocurrency deposit risks. During this time period, Defendants again assured investors that the Bank had appropriate risk management strategies and even modeled for scenarios where cryptocurrency deposits were all withdrawn. Investors only learned the true state of SBNY’s business on March 12, 2023, when the Bank was shuttered and taken over by regulators.

    In December, Plaintiff filed a 166-page complaint on behalf of a putative class of investors alleging that Defendants violated Section 10(b) of the Securities Exchange Act of 1934. Briefing on Defendants’ motions to dismiss is completed and pending before the Court.

Landmark Results

  • This securities fraud class action arises out of Defendants’ misrepresentations and omissions concerning the financial status of the Chinese coffee company Luckin Coffee, Inc.  During the class period, Luckin promoted a sales model wherein it would operate at a loss for several years for the purpose of gaining market share by opening thousands of app-based quick -serve coffee kiosks throughout China.  Between 2017 and 2018, Luckin claimed its number of stores increased from just nine to 2,073 stores.  It also claimed that its total net revenues grew from $35,302 to $118.7 million in that same period.

    On May 17, 2019 Luckin, through an initial public offering (IPO) offered 33 million ADSs to investors at a price of $17.00 per ADS, and reaped over $650 million in gross proceeds. On January 10, 2020 Luckin conducted an SPO of 13.8 million ADSs pried at $42.00 each, netting another $643 million for the company. Unbeknownst to investors, however, Luckin’s reported sales, profits, and other key operating metrics were vastly inflated by fraudulent receipt numbering schemes, fake related party transactions, and fraudulent inflation of reported costs, among other methods of obfuscating the truth. Following a market analyst’s report wherein the sustainability of Luckin’s business model and the accuracy of its reported earnings were challenged, after conducting an internal investigation, Luckin ultimately admitted to the fraud.

    Plaintiffs filed a 256 page complaint alleging violations of Section 10(b) of the Securities Exchange Act against the Exchange Act Defendants, violations of Section 20(a) of the Exchange Act against the Executive Defendants, violations against Section 11 of the Securities Act against all Defendants, violations of Section 15 of the Securities Act against the Executive Defendants and the Director Defendants, and violations of Section 12(a)(2) of the Securities Act against the Underwriter Defendants.  As alleged, following a series of admissions from Luckin and Defendant Lu admitting the existence and scope of the fraud, Luckin’s share price dropped from $26.20 to $1.38 per share, before ultimately being delisted.

    Luckin is currently undergoing liquidation proceedings in the Cayman Islands, where it is incorporated. Luckin also filed for Chapter 15 bankruptcy in the Southern District of New York.  The Underwriter Defendants and Thomas Meier, an outside director filed motions to dismiss the Complaint which are pending.   None of the Executive Defendants or any other Director Defendants have appeared in this Action and all are residents of the PRC.  They were served pursuant to the Hague Convention.  

    On October 26, 2021, Lead Plaintiffs reached a $175 million settlement with Luckin to resolve all claims against all Defendants.