Richard M. Heimann

San Francisco

Litigation

During the past several years, Richard M. Heimann's caseload has held a number of derivative lawsuits from shareholders who want to expose wrongdoing in some of America's biggest companies.

"The clients we have been representing in those cases are major institutional investors, public pension funds for the most part. And they don't want to get involved if it's just for the money. They want to get involved so they can do some corporate good for the company," Heimann said. "These big pension funds rely on the honesty of corporations and their good faith in their operations. So that's of high importance to them and therefore of high importance to us."

He pointed to Boeing and its 737 Max airplane, which had design flaws that caused two fatal crashes with 346 deaths. It settled for $237.5 million and corporate reforms.

"The problem with Boeing is over a relatively short period of time, it went from being a highly engineered, conscious, safety conscious corporate structure and corporate culture to making money as the primary focus of the company," Heimann said.

Engineers and midlevel managers complained that board members had no expertise or interest in paying attention to safety flaws, Heimann discovered.

"We got reforms that involved a higher heightened reporting from mid to senior level management up to the board that were critically important to Boeing's business of safety and engineering," he said.

Another case was Broadcom for back options dating and Wells Fargo, accused of creating millions of uncontested deposit and credit card accounts for customers. In the latter, shareholders received a $240 million settlement in 2020.

But something even more explosive could be on the horizon. Heimann is in discovery of an Ohio securities fraud case against FirstEnergy Corp. and its dealings with former state House Speaker Larry Householder. The utility bankrolled the politician's election and then funded the bailout of a nuclear power plant, Heimann said.

Householder has been sentenced to 20 years for bribery and racketeering, but cases against the utility are just beginning. Heimann represents two major institutional investors, working alongside counsel for a class action case against the company and its officers.

"The amount of money that was in play here over about a two-year period was something in the range of $60 million paid to or for the benefit of this Ohio representative explicitly for the passage of legislation that saved the company over a billion dollars," Heimann said. "So it was a good investment from their standpoint if they could get away with it."

--Tori Richards