Edward F. Donohue, III

Practice Focus
Edward Donohue is a business litigator who primarily represents insurance and financial services companies as well as professionals. He also represents broker-dealers, underwriters and futures commission merchants in investor litigation, employment disputes, life and health policyholder disputes and regulatory matters.

Mr. Donohue has extensive experience in handling financial institution bond and commercial crime claims, with particular emphasis in the investigation of bank customer and insider fraud.

He represents banks and thrifts in a wide variety of matters, including deposit losses, foreclosures, bankruptcy, employment disputes, lender liability litigation and crime losses.

Mr. Donohue has represented a variety of professionals, principally lawyers and investment professional, in malpractice and disciplinary litigation. In that capacity he has appeared before a number of administrative agencies, including the Securities and Exchange Commission and the California Department of Corporations. He also handles disciplinary proceedings before self-regulatory bodies such as the Financial Industry Regulatory Authority, National Futures Association, Board of Certified Planners and the State Bar of California.

In addition, Mr. Donohue represents the California Bankers Association and has for many years provided representation in connection with the various insurance programs established by CBA for member banks.
Representative Cases
Mr. Donohue’s cases representing significant results include:
  • Far East National Bank v. United Commercial Bank, “Jury Verdicts Weekly,” January 16, 2003. Lawsuit regarding legal liability of successive lenders on import-export credit lines secured by fictitious receivables evidenced by counterfeit air waybills. Jury returned $9 million verdict for client-successor bank. Liability was based on evidence that initial lender misrepresented collateral had been released collateral “free of payment” and substitute collateral had been accepted when in fact underlying inventory and accounts were fictitious.
  • Spear v. Wells Fargo Bank, 130 F.3d 857 (9th Cir. 1997). First high court decision recognizing that financial institutions could assert in pari materia defense against successor bankruptcy trustees and receivers of corporations plagued by insider fraud. The U.S. Court of Appeals, Ninth Circuit, held that the bank had no legal obligation under Section 3419 of the Commercial Code to investigate embezzlement of corporate receivable checks by dishonest insiders.
  • Burnstein v. Self, 110 F.3d 67 (9th Cir. 1997). U.S. Court of Appeals, Ninth Circuit, ruled that, absent direct fiduciary relationship between defrauded investors and corporate securities counsel, issuer's attorney had no responsibility under state and federal securities laws to "blow the whistle" on fraudulent sale of fractionalized second mortgages.
  • Robertson v. Peters, 5 F.3d 417 (9th Cir. 1993). Landmark decision successfully challenging bankruptcy trustee's "strong arm" powers under Section 544 of the Bankruptcy Code. U.S. Court of Appeals, Ninth Circuit, overruled as discriminatory and contrary to public policy standing 92-year- old precedent that a female spouse is deemed to dwell in family residence "at the pleasure" of her husband so as to negate constructive notice of wife's interest.
  • Wanetick v. Mel's of Modesto, Inc., 811 F. Supp. 1402 (N.D. Cal. 1992). Federal securities fraud claim against corporate securities attorney/director. First decision to recognize that insiders and professionals in private company, signatories to public registration statement, were not presumptive "control persons" under state and federal securities laws.
  • Hudson v. Capital Management International, Inc., 565 F. Supp. 615 (N.D. Cal. 1983). Class action securities fraud case brought against public auditors under Section 10(b) of the Securities Exchange Act of 1934. Seminal decision recognizing that securities laws require “transactional nexus” between errors in professional’s actual work product included in disclosure documents and inaccurate public disclosures made to investors.
Professional Background
Mr. Donohue joined Hinshaw & Culbertson LLP in July 2009. Previously he was a partner at Carlson, Calladine & Peterson LLP for four years. From 1984 to 2004, Mr. Donohue was a partner at Long & Levitt LLP. He began his legal career in 1981 as an associate at Foreman & Dyess.

Mr. Donohue is a member of the Bar Association of San Francisco, San Francisco Bank Attorneys Association and the Irish American Bar Association.

In 2012, Mr. Donohue was named to the Super Lawyers list in the area of Securities Litigation by Northern California Super Lawyers magazine. In addition, he holds the AV® Peer Review Rating from Martindale-Hubbell, its highest rating for ethics and legal ability.
Publications and Presentations
Mr. Donohue has published extensively on the professional liability risks of accountants, attorneys and financial planners. He is a co-author of “The Lawyer’s Desk Guide to Preventing Legal Malpractice,” which was published in 1999 by the American Bar Association’s Standing Committee on Professional Liability.

He frequently speaks to organizations and clients on a number of topics. His publications and presentations include:
  • "INSURANCE COVERAGE - How a Bank Failure Affects Insurance Coverage," Claims and Litigation Management Alliance Annual Conference, April 2013.
  • “Caught in the Cross Fire: Liability Traps for Bank Counsel,” San Francisco Bank Attorneys Association Luncheon, November 2012.
  • “Bad Judgments or Bad Times? – Litigation and Enforcement Actions After a Bank Failure,” San Francisco Bank Attorneys Association Luncheon, August 2012.
  • Detective or Advisor – The Attorney-Client Privilege in Coverage Evaluations,” paper, The Fidelity Law Journal, Volume XI, October 2005 and presented, Fidelity Law Association Meeting, (Philadelphia, Pennsylvania), November 2007.
  • “Informed Consent in Attorney-Client Relations,” paper and presentation, National Legal Malpractice Conference, (Washington, D.C.), April 2007.
  • An Historical Overview of the Federal Bank Crime Laws,” and “Financial Institution Attorneys as Gatekeepers,” papers and presentations, California Bankers Association Bank Counsel Meeting, (Dana Point, California), March 2007.
  • “Customer Margin and Deficit Balance Disputes," author, The View, January 2002.
  • “Complying with Expedited Funds Availability," author, Kentucky Banker Magazine, December 2001.
  • “Bank Liability Insurance update – Contemporary Issues for Bank Attorneys,” presentation, San Francisco Bank Attorneys Association, (San Francisco, California), February 2001.
Community Service Activities
Mr. Donohue is active in coaching youth soccer and CYO basketball
Personal
Mr. Donohue was born in Staten Island, New York.