Key Takeaways
- • Akin Gump secured a complete jury exoneration for Armistice Capital and two of its executives on April 28, 2026, in securities class action litigation involving alleged pump-and-dump trading in Vaxart stock totaling over $250 million during the COVID-19 pandemic.
- • The California federal jury deliberated for less than four hours over two days before issuing its verdict, signaling a decisive rejection of plaintiff claims that defendants issued false press releases regarding vaccine research to manipulate stock prices.
- • The American Lawyer's Litigation Daily named the Akin team runner-up in its Litigator of the Week series, recognizing the significance of the defense victory in a three-week trial in the U.S. District Court for the Northern District of California.
- • The defense team consisted of eight Akin attorneys across multiple practice areas, led by white collar defense & government investigations co-head Chuck Connolly, alongside funds litigation partners Kate Shapiro and Douglas Rappaport.
Summary
An Akin Gump team achieved a complete jury exoneration for hedge fund Armistice Capital and two of its executives in a securities class action lawsuit that accused them of orchestrating a pump-and-dump scheme involving Vaxart Inc. stock. On April 28, 2026, after a three-week trial in the U.S. District Court for the Northern District of California, a federal jury returned a verdict in favor of all defendants on claims of securities fraud and insider trading. The American Lawyer's Litigation Daily subsequently recognized the team as a runner-up in its Litigator of the Week series.
The underlying litigation centered on allegations that Armistice and the individual defendants engaged in coordinated trading activity involving more than $250 million of Vaxart stock during the COVID-19 pandemic. Plaintiffs contended that defendants artificially inflated the company's stock price by disseminating false press releases regarding the company's vaccine research capabilities, then capitalized on the inflated valuations through strategic stock sales. The rapid jury deliberation—less than four hours spread across two days—suggests the defense successfully undermined the credibility or evidentiary foundation of these claims.
The Akin team assembled for the defense included senior leadership and specialized expertise across multiple practice areas. Chuck Connolly, co-head of the firm's white collar defense & government investigations practice, led the defense alongside funds litigation partners Kate Shapiro and Douglas Rappaport. The broader team included environmental partner Stacey Mitchell, counsel Josh Rubin and David Giller, and associates Lillian Rand and Harris Stephens. This composition indicates a sophisticated defense strategy drawing on white collar criminal defense methodologies and securities litigation expertise to dismantle plaintiff allegations in a complex class action context.
The verdict represents a significant outcome for institutional investors and hedge funds facing securities class action exposure, particularly in cases involving COVID-era trading activity and allegations of coordinated market manipulation. The decisiveness of the jury's rejection of claims after a substantial trial period suggests strong factual or legal defenses proved dispositive with the jury.
The underlying litigation centered on allegations that Armistice and the individual defendants engaged in coordinated trading activity involving more than $250 million of Vaxart stock during the COVID-19 pandemic. Plaintiffs contended that defendants artificially inflated the company's stock price by disseminating false press releases regarding the company's vaccine research capabilities, then capitalized on the inflated valuations through strategic stock sales. The rapid jury deliberation—less than four hours spread across two days—suggests the defense successfully undermined the credibility or evidentiary foundation of these claims.
The Akin team assembled for the defense included senior leadership and specialized expertise across multiple practice areas. Chuck Connolly, co-head of the firm's white collar defense & government investigations practice, led the defense alongside funds litigation partners Kate Shapiro and Douglas Rappaport. The broader team included environmental partner Stacey Mitchell, counsel Josh Rubin and David Giller, and associates Lillian Rand and Harris Stephens. This composition indicates a sophisticated defense strategy drawing on white collar criminal defense methodologies and securities litigation expertise to dismantle plaintiff allegations in a complex class action context.
The verdict represents a significant outcome for institutional investors and hedge funds facing securities class action exposure, particularly in cases involving COVID-era trading activity and allegations of coordinated market manipulation. The decisiveness of the jury's rejection of claims after a substantial trial period suggests strong factual or legal defenses proved dispositive with the jury.
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