Cowen

Crossroads Systems provides storage networking equipment and business information assurance (BIA) systems used to manage and protect critical data. Its products include DBProtector (database security), FileMigrator Agent (migrating files from servers to network-attached storage), ReadVerify Appliance (monitoring tape media and the condition of disk drives), and ShareLoader (protecting data on desktop and laptop PCs and in remote offices). Crossroads Systems sells directly to manufacturers, such as EMC and Hewlett-Packard, and through distributors, including Bell Microproducts. The company was founded in 1996.

Cowen Group offers M&A advice, securities underwriting, equity offerings, private equity placements, and market-making, as well as securities sales and trading for institutional investors. Subsidiary Cowen and Company specializes in investment banking for small to midsized companies in the alternative energy, consumer health care, media, technology, and telecommunications industries. It also performs equities research in those sectors. Cowen Asset Management focuses on US-based small and mid-sized companies; its UK counterpart provides traditional asset management. Cowen Group plans to merge with private alternative asset manager Ramius to create an integrated financial services provider.

Case description: Alleged breach of fiduciary duty, fraud and negligent misrepresentation by the lead underwriters of Crossroads’ initial public offering (IPO).

Cypress was offered as expert witness on behalf of Cowen et al. as to (i) the reasonableness of their actions as lead underwriters, including the pricing and allocation of shares in the IPO; (ii) their purported fiduciary duties to Crossroads; and (iii) the propriety of outsized commissions paid to Cowen et al. by certain IPO investors.  The case settled.