It doesn't sound like much of a lawsuit, but if neither the facts nor the law are on your side, a takedown fronting the business section of the New York Times is the next best thing:

Mary L. Schapiro, who appears this week at a confirmation hearing on her selection to head the Securities and Exchange Commission, has been accused in two lawsuits of making misleading statements to quickly complete a merger of regulatory organizations after which she received a 57 percent raise in her pay.

It is almost as if the plaintiffs wrote that lead, rather than Stephen Labaton, because it sounds pretty sinister, doesn't it?  The 55 page complaint, however, is underwhelming.  Basically, it turns on the idea that Schapiro negotiated too hard in completing the NYSE-NASD merger.  She said - accurately - that the IRS would not let the merger be facilitated by a big payout to every NASD member firm, because the NASD was a non-profit.  I'm sure her lawyers are couching this as her prediction.  The plaintiffs, aggrieved NASD member firms, wanted that big payout before they would agree to merge, and allege she violated her fiduciary obligations by making this accurate statement not as a prediction, but as a statement of fact (the IRS did indeed forbid a big payout, but did not issue its letter doing so until after the negotiations were completed).

Four observations:

• Deal negotiations, sophisticated parties, arm's-length, &c, I'm no contracts lawyer, but how often have courts stepped in to police these sorts of utterances?
• Let's say Schapiro lied.  The IRS hadn't yet banned deal-sweetening payouts to NASD firms when she said they did.  What's the remedy, given that the IRS did so in the end?  The plaintiffs are no worse of in this world, as far as I can tell, than they would be in the world in which they wish they were in.
• That 57% increase in pay noted so portentiously in the lead?  Has nothing, and I mean nothing, to do with the conduct of the negotiations on whether to merger NASD and NYSE.  It is what Schapiro is getting paid now v. what she got paid before the merger.  But if she was getting paid less or an identical amount, plaintiffs would have the exact same factual scenario, though maybe somehow this makes a breach of fiduciary obligations worse (don't see how, though, but maybe Ribstein has a view).
• But who cares?  The Washington lawyers who brought the case had an all but identical one dismissed earlier.  Luckily for them, Schapiro got nominated to head the SEC, so they refiled, thinking scandal - something every Washington lawyer has to think about now.  Unluckily for them, she and the other defendants didn't pay them some hush money immediately.  So they've played their hole card, and got the Times to jump in - which isn't good for Schapiro, but neither seems lucky or unlucky for the plaintiffs.  To me, it still doesn't look like a settlement, unless the story drags on, and the Senate concludes she still should get to head the SEC, but that she needs to make nice with the NASD dissidents out of simple fairness.  I think that's an unlikely scenario, and I suspect that the prospect of getting to discovery, which could also force a settlement, is unlikely too.

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