Media Mentions
2011
“U.K. Officials, ‘Under Pressure’ from U.S., Struggle to Bolster Privacy Act Prosecutions – Panel”
Thomson Reuters Trust Law November 23, 2011
Gordon Greenberg called U.S. Justice Department and SEC prosecutions under the Foreign Corrupt Practices Act “a money-making enterprise.” Mr. Greenberg cited the more than $1 billion in FCPA fines and penalties that the agencies have taken in during the past year, which he ascribed to the “tremendous” resources they have dedicated to enforcement.
Gordon A. Greenberg, SEC Defense, White-Collar & Securities Defense
“Judge Rejects SEC Action Against State Street Execs”
Massachusetts Lawyers Weekly, November 10, 2011
Mark Pearlstein called a federal administrative law judge’s rejection of SEC charges against his client and another investment company executive “a very significant decision.” If the judge had sided with the SEC’s charges that the executives were individually responsible for misleading investors, he noted, “it would have almost literally required executives to retain their own personal disclosure counsel … [rather than] rely on the advice of well-informed, expert in-house counsel. Beyond being wildly impractical, it would have also led to some crazy policy.”
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“'St. Sean' of State Street Beats SEC”
Reuters, November 2, 2011
Mark Pearlstein said it was never considered that his client, a former investment firm executive, would enter a settlement with the SEC neither admitting nor denying wrongdoing in allegations of misleading investors. “If a person settles, they’re not in a position to take issue with allegations in the complaint,” Mr. Pearlstein explained.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“Judge Clears Ex-State Street Execs in Subprime Stock Case”
Boston Herald, October 31, 2011
Mark Pearlstein said he and his client, a former investment firm executive, were “deeply gratified” that a federal administrative law judge dismissed SEC claims that the client and a colleague had misled clients about their investment exposure to subprime mortgages.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“Two State Street Executives Cleared of SEC Charges of Misleading Investors”
National Law Journal, October 31, 2011
Mark Pearlstein expressed satisfaction over a federal administrative law judge’s rejection of SEC claims against his client and a colleague, former investment firm executives, saying it demonstrates that “enforcement cases are determined by the actual evidence of how individuals behaved.” Saying that “setting the public record straight” about the allegations “is so very important,” Mr. Pearlstein said the judge’s decision “tell[s] the world they didn’t do anything wrong and it’s a very, very gratifying feeling.”
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“SEC Case Against State Street Pair Thrown Out”
Financial Times, October 31, 2011
Mark Pearlstein called the SEC’s allegations that his client and another former investment firm executive misled investors about a fund’s exposure to subprime mortgages “a case that we genuinely believe never should have been brought.” An administrative law judge agreed, and rejected all the SEC’s claims.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“Judge Dismisses SEC Charges Against Two Former State Street Executives”
Washington Post, October 31, 2011
Mark Pearlstein asserted that “it is unconscionable that following a long and distinguished career in the investment industry,” his client – a former investment fund executive – was “forced to spend several years living under a cloud” of “baseless allegations” by the SEC that the client and another former executive had misled investors about the risks in a fund with subprime mortgage exposure. A federal administrative law judge dismissed the SEC charges.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“Judge Dismisses SEC Charges Against Two Former State Street Employees”
Boston Globe, October 31, 2011
Mark Pearlstein, after a federal administrative law judge dismissed charges brought by federal regulators against his client and another former executive of an investment firm over allegedly false and misleading documents about risky investments, said that his client acted honestly and should “never have had to live with the cloud that these charges placed on him.” The judge ruled that neither executive had ultimate authority for the documents.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“SEC Case Against Ex-State Street Execs Dismissed”
Reuters, October 31, 2011
Mark Pearlstein declared “complete exoneration” when a federal administrative law judge dismissed SEC claims that two former investment firm executives, including Mr. Pearlstein’s client, misled investors about the risks in a bond fund that held subprime mortgage investments.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“Ex-State Street Execs Cleared of SEC Fraud Claims”
Law360, October 31, 2011
Mark Pearlstein proclaimed “total victory” and “complete exoneration” for his client, a former investment firm executive, when a federal administrative law judge rejected SEC allegations that he and a colleague misled investors. The judge’s decision “demonstrates that all of [the client’s] actions were undertaken with integrity, and with an unwavering focus on the best interests of investors.” The article noted that Fredric Firestone, Laura McLane, K.C. Goyer, David Chen and Jason Crow were McDermott lawyers assisting in the case.
David H. Chen, Jason Crow, Fredric D. Firestone, Kathryn C Goyer, Laura McLane, Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“SEC Loses Again: Agency Judge Clears State Street Execs”
Thomson Reuters News & Insight, October 31, 2011
Mark Pearlstein called SEC allegations that his former investment firm executive client misled investors “a case where the SEC should never have proceeded…. We felt all along that if we received a fair hearing we would prevail. Chief judge Murray gave us a very fair hearing.” The SEC's chief administrative law judge, Brenda Murray, rejected the SEC’s charges against Mr. Pearlstein’s client and a colleague at the same firm.
Mark W. Pearlstein, SEC Defense, White-Collar & Securities Defense
“Whistleblower Rules and Attorney-Client Privilege”
Compliance Week, March 1, 2011
Steven Scholes advised any company conducting its own investigation of whistleblower allegations made to the SEC, “Don’t expect a direct or implied request for a privilege waiver from the SEC enforcement staff. Generally, under the SEC’s current enforcement program, the SEC staff does not seek such waivers.” He added that in most such circumstances, “the SEC staff will (to conserve its own resources) defer its own investigation to an internal investigation being conducted by the company.” The SEC could conduct a parallel investigation, Mr. Scholes noted, but “the best way to avoid this situation is for a company to conduct a credible investigation.”
Steven S. Scholes, SEC Defense, Securities Litigation, Trial, White-Collar & Securities Defense
“Whistle-blower Debate Heats Up”
CFO.com, February 11, 2011
Fredric (Rick) Firestone warned that the Dodd-Frank Act’s provision for whistle-blowers to go directly to the SEC “will harm companies” and their existing compliance processes, because it “sets up strong incentives to bypass the very internal reporting that the Sarbanes-Oxley program was set up to promote and protect.” He also cautioned that the Act’s monetary incentives to whistleblowers “could exacerbate the effects of fraud in some cases. For example, someone might wait for a period of time before reporting a fraud in order to influence a larger recovery by the SEC.” Mr. Firestone added that in his experience most companies are grateful to receive information on possible fraud and take decisive action to root it out.
Fredric D. Firestone, SEC Defense, Securities, White-Collar & Securities Defense
“SEC Gets Into the Non-Prosecution Agreement Act”
Compliance Week, January 25, 2011
Steven Scholes, commenting on a clothing retailer’s decision to cooperate with the SEC’s investigation of a former executive in exchange for a non-prosecution agreement (NPA), said, “It’s a very savvy move by the SEC to adopt the use of NPAs … In exchange for agreeing not to prosecute, they are getting significant information out of the subjects of their investigations and will continue to do so.” He warned that companies seeking an NPA “are going to have to make educated guesses as to whether they’re going to get a non-prosecution agreement after they cooperate.” Mr. Scholes added regarding NPAs, “You will see more and more of these in the future.”
Steven S. Scholes, SEC Defense, White-Collar & Securities Defense
“CalPERS Probe Hints at SEC’s New To-Do List”
Law360, January 7, 2011
Steven Scholes contended that an SEC investigation of whether California adequately disclosed the health of its pension plans to state bond investors means that, “for the first time in history, the SEC is taking a close, close look at municipal bond offerings, and issuers are in grave danger.” He added that “we may be on the cusp” of the SEC going after state and local officials who manage pension plans and make faulty disclosure statements.
Steven S. Scholes, SEC Defense, Trial, White-Collar & Securities Defense
“Business Litigation: A Look into 2011”
Compliance Week, January 4, 2011
Steven Scholes singled out two types of business litigation for more activity in 2011. The first is lawsuits against banks by institutional investors, where he expects that a “tremendous amount of activity … is really just now starting to work its way through the system.” The second is insider trading claims against analysts and consultants who research proprietary company data and sell it to investors without permission. Noting that this would extend the reach of securities laws, Mr. Scholes anticipates “a very interesting series of investigations and lawsuits as to how this all plays out.”
Steven S. Scholes, SEC Defense, Securities Litigation, Trial, White-Collar & Securities Defense
“Securities Regulation to Watch in 2011”
Law360, January 1, 2011
Eugene Goldman observed that, although the Dodd-Frank financial regulation act greatly expands the roles of the SEC, CFTC and other financial regulators, Congress can still affect what the agencies do by cutting back on funding. “There’s a potential impact through the funding mechanism, if they [Congress] have a strong dislike for the results of SEC rulemaking,” he said.
Eugene I. Goldman, SEC Defense, Trial
“Securities Cases to Watch in 2011”
Law360, January 1, 2011
Eugene Goldman commented on the case of Erica P. John Fund v. Halliburton, a class action lawsuit regarding loss causation pending on certiorari before the U.S. Supreme Court. Noting that the Court must review the standards to be met in order to certify a class, Mr. Goldman observed that “of key interest is that the cases that have been granted cert focus on whether the litigation can proceed based on where things are at an early stage in litigation.”
Eugene I. Goldman, SEC Defense, Trial
2010
“Q&A with McDermott’s Rick Firestone”
Law360, December 8, 2010
Fredric (Rick) Firestone, former Associate Director of the SEC’s Division of Enforcement, predicted that “as the Dodd-Frank Act is implemented over the next year, there will be a significant increase in cases involving new or more closely regulated entities and markets.” Mr. Firestone also anticipates “a significant increase in the size, scope and pace of the SEC’s inspection and examination program, and more referrals to the Division of Enforcement.” In this environment, he added, “regulatory turf battles and regulatory overkill are a real problem,” and he urged regulators “to communicate with one another and to be reasonable in dealing with each other and with private parties involved in investigations.”
Fredric D. Firestone, SEC Defense, White-Collar & Securities Defense
“Jersey Sure? The SEC Gets Tough on Public Fund Accounting”
Plansponsor, November 2010
Steven Scholes said the SEC’s securities fraud charge against the state of New Jersey for misleading municipal pension securities investors by masking pension underfunding was somewhat unusual because there is little SEC enforcement of municipal offerings. Mr. Scholes asserted that the SEC’s message has been heard, and that municipal issuers in the future will likely ensure that they have appropriate, reasonable, defensible assumptions for calculating their pension liabilities. He also pointed out, however, that any past problems with accounting for these liabilities (which are particularly acute because of the financial stress governmental entities currently face) could still subject municipalities to SEC investigation.
Steven S. Scholes, SEC Defense, White-Collar & Securities Defense
“White Collar Defense Boom Lures Public Servants Away”
Law360, September 28, 2010
Fredric (Rick) Firestone, a former Associate Director of the SEC’s Division of Enforcement, commented on the fact that many of the Division’s leaders are former federal prosecutors. “It’s probably unprecedented,” Mr. Firestone said of the leadership emphasis on Department of Justice alumni, which many see bringing more aggressive enforcement tactics to the SEC.
Fredric D. Firestone, Michael A. Ungar, SEC Defense, Securities Litigation, White-Collar & Securities Defense
Steven Scholes was quoted August 18 by Bloomberg News on the state of New Jersey’s settlement of claims by the Securities and Exchange Commission that the state misled municipal bond investors by failing to disclose that its two biggest pension plans were underfunded. Regarding the possibility of additional SEC action against other states, Mr. Scholes said that “the only thing we can conclude here is that there is certainly more to come. The market is mammoth. It has been growing over time and has never really been subject to any sort of significant, comprehensive SEC scrutiny in the past as it is undergoing today.” Mr. Scholes added, "The SEC may seek to use fraud cases to encourage public officials to improve the quality of the information they provide. The SEC can drive more robust disclosures through this type of enforcement which is sure to make the municipal bond market sit up and take notice."
Steven S. Scholes, SEC Defense, Trial
Fredric Firestone commented for Business Insurance (August 8) on the enhanced protections for whistle-blowers contained in the Dodd-Frank financial services reform law. Mr. Firestone cited “substantial additional safeguards for whistle-blowers in the form of specific, anti-retaliation protections,” which include awarding reinstatement, twice back pay owed and litigation costs/attorney’s fees to fired whistle-blowers who sue their employers over the dismissal.
Fredric D. Firestone, Corporate Responsibility and Governance, SEC Defense
Eugene Goldman was quoted by BNA Securities Regulation & Law Report (August 2) concerning what the SEC must do to implement the provisions of the Dodd-Frank financial reform act. The SEC is already seeking public input to harmonize the act’s fiduciary duty standards for brokers and investment advisers, and Mr. Goldman expects “robust comments from those who are concerned about a ‘one-size-fits-all’ universal fiduciary standard.” He also cited the agency’s efforts to invite pre-rulemaking comment on derivatives trading regulations, saying that “we are consulting clients about taking advantage of these opportunities” in the process. However, Mr. Goldman still sees potential problems in derivatives rulemaking because the regulatory jurisdictions of the SEC and the Commodities Futures Trading Commission “are not precise because of the similarities in products.”
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Trial
Fredric Firestone spoke with the Washington Business Journal on July 26 concerning plans by the Securities & Exchange Commission to add up to 800 more positions to implement its new duties under the recently passed Dodd-Frank financial reform act. Mr. Firestone, former associate director of the SEC’s enforcement division, predicted that most of those new staff positions will be in the Washington, DC area, and that they will involve people with market and product expertise as well as lawyers and accountants.
Fredric D. Firestone, Corporate Responsibility and Governance, SEC Defense
Fredric Firestone talked on a July 26 Bloomberg Law Podcast about the Dodd-Frank financial reform act and its implications for managers of hedge funds and private equity funds. Mr. Firestone stated that the act will “substantially alter the regulatory landscape” for advisors to these funds, making them subject to comprehensive regulation by the Securities & Exchange Commission. “SEC registration and regulation is probably more painful than a migraine, but less painful than quadruple bypass surgery,” Mr. Firestone declared. “It is a resource- and document-intensive proposition that will be both expensive and time-consuming for advisors.”
Fredric D. Firestone, Corporate Responsibility and Governance, SEC Defense
Fredric Firestone was interviewed by Boardmember.com on July 21 concerning the whistleblower provisions of the Dodd-Frank financial reform act. He noted the "significant effect on public companies" of the act's provision that a whistleblower providing information on securities law violations could receive 30% of any recovery exceeding $1 million. Because such recoveries can be hundreds of millions of dollars, "[A] corporate insider whistleblower would potentially have a very large payday at the end of the process. So the types of cases and the potential recoveries involved have actually expanded and increased..." Mr. Firestone added that because this provision gives "incentive for corporate insiders to run to the government in the first instance [of a problem] rather than perhaps going within the company itself," it is "more imperative than ever that companies design and implement effective compliance programs and policies."
Fredric D. Firestone, Corporate Responsibility and Governance, SEC Defense, Securities Litigation
Fredric Firestone commented for The Wall Street Journal (June 22) and The Wall Street Journal Asia (June 23) concerning a Securities & Exchange Commission civil lawsuit seeking to force the former CEO of CSK Auto Inc. to pay back stock options and bonuses paid for company financial performance that turned out to be based on fraud. The lawsuit marks the first time the SEC has sought such a recovery from an executive who was not personally found guilty of misconduct. “A lot of eyes should be on this case,” said Mr. Firestone, who formerly was SEC associate director of enforcement.
Fredric D. Firestone, SEC Defense
Steven Scholes was quoted by Dow Jones Newswires/The Wall Street Journal on June 2 regarding the Security and Exchange Commission’s civil charges against several current and former executives of Diebold Inc. related to alleged financial fraud. Mr. Scholes, who represents former company CFO Gregory Geswein, stated, “We are deeply disappointed that, almost five years after Mr. Geswein voluntarily left Diebold of his own initiative, the SEC has made these stale allegations.”
Steven S. Scholes, SEC Defense, White-Collar & Securities Defense
Steven Scholes is mentioned in a March 6 Wall Street Journal profile of Thomas Quinn, who according to the story has been involved in securities fraud for more than five decades. Mr. Scholes recalled that, when he was deposing Quinn while serving as a receiver for the SEC in a 1996 Quinn-related case, a plane flew by towing an advertising banner that read, “Leave Tommy Alone.” Mr. Scholes said he couldn’t help but laugh as Quinn read the message out loud.
Steven S. Scholes, SEC Defense, Securities Litigation, Trial
Fredric Firestone was featured in a February 3 US Fed News story that discussed his announced departure as an Associate Director of Securities and Exchange Commission’s Division of Enforcement to become a partner in McDermott. During his 12-plus years at the SEC Mr. Firestone oversaw investigations and enforcement actions in all major program areas, and the Director of the Division of Enforcement called him “a first-rate talent … [who] will be sorely missed.” Mr. Firestone called his tenure at the SEC “an honor and a privilege.”
Fredric D. Firestone, Michael A. Ungar, SEC Defense, Securities Litigation, White-Collar & Securities Defense
Fredric Firestone was mentioned in the Washington Post (January 21) and OnWallStreet.com (January 22) as a new partner in McDermott’s Washington, DC office, where he will head the Firm’s SEC defense practice. Mr. Firestone previously was an associate enforcement director at the Securities and Exchange Commission, where he helped investigate accounting scandals at Enron and WorldCom and oversaw the investigation into the collapse of the auction rate securities market.
Fredric D. Firestone, Michael A. Ungar, SEC Defense, Securities Litigation, White-Collar & Securities Defense
Fredric Firestone and Michael Ungar were featured in a January 20 Law360 story about their move from the Securities and Exchange Commission to McDermott’s controversies business unit and SEC defense practice. Mr. Firestone was previously associate director of the SEC enforcement division and Mr. Ungar was branch chief of the division. With more than 20 years of SEC enforcement experience between them, the two partners will advise financial industry and other clients on SEC, criminal and self-regulatory agency investigations and enforcement actions. “I welcome the opportunities and challenges that lie ahead in offering strategic counsel to McDermott’s clients, particularly given the broad range of industries and matters in which the firm is involved,” Mr. Firestone said.
Fredric D. Firestone, Michael A. Ungar, SEC Defense, Securities Litigation, White-Collar & Securities Defense
Steven Scholes was quoted by Law360 on January 19 concerning the almost $600 million in fines and settlements paid by companies in 2009 to settle the ten largest stock option backdating cases, a development that may indicate that major options backdating litigation is drawing to a close. “My sense is that the bulk of the settlements have been made public already,” Mr. Scholes said. “These things kind of go in waves, and I think most of these have moved through the system.”
Steven S. Scholes, SEC Defense, Trial
Steven Scholes spoke to Law360 (January 14) about the new powers of the Securities and Exchange Commission’s Enforcement Division attorneys. “I anticipate that it will be a sea change in the enforcement program and will lead to the Division of Enforcement bringing many more cases that otherwise it might not have,” Mr. Scholes said, referring specifically to changes that will enable the SEC to gain greater cooperation from informers and companies. He added about the new SEC cooperation procedure: “My anticipation is that people will take them up on it and it will expedite their investigations and help them bring cases.”
Steven S. Scholes, SEC Defense, Trial
Steven Scholes was among the lawyers included in the January 13 announcement by Law360 on the formation of its 2010 securities editorial advisory board. Members of the board are leading securities law professionals who will provide guidance to Law360 regarding important issues and developments in the field. Mr. Scholes heads the Firm’s SEC defense group and subprime and credit markets litigation group, leads the Trial Department in the Chicago office, and is a former lawyer in the SEC’s Enforcement Division.
Steven S. Scholes, SEC Defense, Securities, Trial
Steven Scholes was quoted in PlanAdviser.com (January 11) examining how financial regulators view investment adviser use of social networking. He said the SEC would view as advertising an adviser's use of electronic media for stock tips, noting that, with the Internet's speed, "it would be very easy to slip very unknowingly...into making communications that constitute advertising without realizing it." Mr. Scholes suggested that investment firms either tell employees "you cannot use social networking for anything having to do with the firm," or require preapproval of social networking use ("because these communications are so fast, pragmatically it's very difficult to implement a policy like that," he noted), or allow social networking use only with clients and not the general public. "All of these approaches carry regulatory approval, just in different degrees," Mr. Scholes said, and can be an "insurance policy" to show regulators that proper procedures were used.
Steven S. Scholes, SEC Defense, Trial
Eugene Goldman was quoted by the St. Onge & Associates blog on January 3 concerning the ramped up enforcement activity by the Securities & Exchange Commission. “Between the $1 billion budget (proposed for 2010) and the need to project that it’s tough, it’s reasonable to expect a pretty aggressive enforcement program” for the agency, Mr. Goldman said.
Eugene I. Goldman, SEC Defense, Trial
2009
Eugene Goldman was quoted on December 21 by CFO.com concerning the likelihood that recent accounting fraud charges by the SEC indicate more extensive future enforcement actions. “Between the [SEC’s proposed 2010] $1 billion budget and the need to project that [the SEC is] tough, it's reasonable to expect a pretty aggressive enforcement program,” Mr. Goldman stated.
Eugene I. Goldman, SEC Defense, Trial
Eugene Goldman commented for CFO.com on November 1 concerning an expected increase in the intensity of Securities and Exchange Commission securities law compliance efforts. “Between the $1 billion budget [proposed for 2010] and the need to project that it’s tough, it’s reasonable to expect a pretty aggressive enforcement program” from the SEC, Mr. Goldman said. He cited as an example how the SEC is using a federal judge’s order striking down a settlement with Bank of America over the Merrill Lynch acquisition to seek more information that might result in additional charges against the bank.
Eugene I. Goldman, SEC Defense, Trial
Eugene Goldman was quoted in a June 17 Law360 story on President Obama’s proposed overhaul of the nation's financial regulatory structure. Mr. Goldman believes that the Securities and Exchange Commission fared well in the proposal because the agency did not end up losing a great deal of power to the Fed or consolidating with the CFTC. “If you look back four months ago, when people predicted doom and gloom for the agency's future, we now see the president's proposal as a declaration of confidence in Chairman Schapiro's ability to get the SEC back on its feet,” Mr. Goldman said.
Eugene I. Goldman, SEC Defense, Trial
Eugene Goldman was quoted in Securities Regulation and Law Report (July 10) concerning the securities enforcement implications of the Obama Administration's financial regulatory overhaul plan. "It was a very good day for the SEC when the administration announced its plan," Mr. Goldman said. "If you think back four or five months, there were predictions of doom and gloom for the SEC in light of Madoff and other issues, yet this package of proposals, which will expand the commission's powers in various respects, … appears to be a vote of confidence in Chairman Schapiro and her ability to get the commission back on its feet." With the proposed 2010 SEC budget topping $1 billion for the first time, "All the signals coming out of the administration are for a proactive SEC," and he singled out recommended legislation to allow the SEC to prohibit mandatory arbitration in favor of litigation for claims against broker-dealers.
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Trial
Eugene Goldman described for Law.com on April 28 the challenges of defending and advising overseas clients that are faced with white-collar crime investigation and prosecution by the U.S. Securities & Exchange Commission and Department of Justice. Mr. Goldman travels to offshore clients' companies to prepare them for an SEC investigatory visit, or even a conference call with the SEC. "The foreigner is not familiar with the aggressiveness of an SEC investigation," he explained. "You need to make sure there is no false comfort because they're in a foreign country."
Link to: Eugene , Washington, D.C., Trial,
Eugene I. Goldman, SEC Defense, Trial
Eugene Goldman was quoted in a March 26 Law360 story on the potential for stricter securities law enforcement by the Financial Services Authority (FSA), the United Kingdom's financial market regulatory body. He noted that the FSA web site increasingly carries press releases covering agency lawsuits over fraud and market abuses, adding that "It's starting to resemble the SEC web site."
Eugene I. Goldman, SEC Defense, Trial
2008
Jeffrey E. Stone was quoted in the December issue of Inside Counsel in an article regarding former McAfee general counsel, Kent Roberts', high-profile options backdating trial. The jury found that Roberts' actions did not meet the threshold for criminal intent. "This was under the white spotlight - an issue that drew intense investigative pressure. In a case like this, where apparently the evidence suggested that there was no intent to commit a crime, the jury ferreted that out. They really focused on the facts of this specific case," said Mr. Stone.
Jeffrey E. Stone, SEC Defense, Trial, White-Collar & Securities Defense
Steven S. Scholes was quoted on November 11 by Law360 in an article regarding the greater level of regulation expected under Obama's Securities Exchange Commission (SEC). Mr. Scholes noted that the current enforcement staff has suffered from low morale under Christopher Cox's leadership and from signals sent by the Bush administration. He added that while the number of cases pursued by the SEC has increased, the cases tend to be small and focused on individuals rather than companies. "A new chairman, for example, who has a more aggressive bent toward enforcement can certainly cause the current staff to be much more aggressive and robust," he noted. "I think that it is very easy to understand the case that additional regulation is needed given what we've been through this year to date," Mr. Scholes added.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was quoted in the June 11 issue of Fortune Magazine in an article regarding the Commonwealth of Massachusetts' claim that Phil Goldstein, a hedge fund manager, violated rules prohibiting the marketing of hedge funds to average investors. In response, Goldstein and his firm filed suit in March 2007 against the secretary of the Commonwealth, claiming that the secretary had violated Goldstein's right to free speech. Mr. Scholes noted that if Goldstein wins his case, changes will likely be made in how hedge funds raise capital. "You would see more advertising in every imaginable form, especially by smaller, less established, and possibly riskier firms that need more capital. It would benefit them much more than the big houses," he said.
Steven S. Scholes, SEC Defense, Trial
Jeffrey E. Stone was quoted in the January 2008 issue of CFO Magazine in an article regarding the Securities and Exchange Commission's backdating case against Carl W. Jasper, ex-CFO of Maxim Integrated Products. Mr. Stone stated that Jasper has a good chance of defending himself against accusations of backdating options if the case proceeds to trial. Because the accounting rule that pertains to backdated options, APB 25, is so complex, "the government has the difficult burden of establishing that any individual, CFO or otherwise, had the requisite understanding of those accounting rules at the time the events happened," Mr. Stone said.
Jeffrey E. Stone, SEC Defense, Trial
2007
Eugene I. Goldman was quoted in an October 19 article published by Registered Rep Magazine regarding whether it is better to fight than to make a deal with the Financial Industry Regulatory Authority (FINRA). A recent analysis indicates that litigating against the FINRA enforcement division would achieve better results in comparison to the relief sought by FINRA staff. Mr. Goldman did a study in 1998 and 2000 that showed enforcers at the SEC often lose cases heard by their own administrative law judges. The recent FINRA analysis shows hearing panels often reduced suspension periods and reduced requested bars to suspensions. "One of the most important things to a broker and the employer is whether they have to 'take a vacation,' as we call it," said Mr. Goldman. "It does appear that this is an area where it may be worth fighting. But the key missing ingredient is what the settlement posture was before it went to hearing."
Eugene I. Goldman, SEC Defense, Trial
Steven S. Scholes completed a Q&A on October 8 published by Securities Law360 regarding his work in white-collar and securities law.
Steven S. Scholes, SEC Defense, Trial
Edward P. Leibensperger was quoted in an August 24 article published by the Boston Business Journal regarding new regulations and expensive lawsuits that have forced corporate directors to assert their independence over managers. Mr. Leibensperger commented on the tension between management and corporate directors in the post-Sarbanes era. "I think the publicity of first the Enron debacle and then Sarbanes-Oxle strengthened a principle that was always there: Outside directors have to be independent," Mr. Leibensperger said.
, SEC Defense, Trial
Steven S. Scholes was quoted in an August 1 article published by CFO Magazine regarding the effect of the Sarbanes-Oxley Act on the relationship between the Securities and Exchange Commission (SEC) and other key players. Mr. Scholes notes that the relationship with the Financial Accounting Standards Board (FASB) is particularly complicated due to a history of being at odds with each other. "It is eminently clear that the SEC is insisting on a seat at the table during the process through which FASB members are nominated. What is not as clear is how the SEC will use that seat," Mr. Scholes said.
Steven S. Scholes, SEC Defense, Trial
2006
Steven S. Scholes was quoted in the August edition of the Chicago Lawyer in an article regarding the decline of securities class action suits. Mr. Scholes commented on how the decline may be based on the fact that most of the major cases have settled and as a result of the Sarbanes-Oxley Act as well as a series of high profile scandals, companies have been deterred from engaging in fraudulent behavior. "Some of the larger, more well-publicized cases we've been reading about may be working their way through the system and returning us to a more normal state of affairs," Mr. Scholes said.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was quoted in a May 2 article published by Securities Law360 regarding McDermott's close link between the firm and federal regulators. Mr. Scholes, a former attorney to the SEC's Division of Enforcement, discusses how these relationships often help their clients avoid a trial altogether. "We value very highly the credibility that we have with government lawyers. Much of our practice is against the government or regulatory agencies and we greatly guard the reputation we've developed with them over the years," Mr. Scholes said.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was mentioned in the March edition of The American Lawyer in an article regarding former stock trader Daniel Calugar's agreement to pay the Securities and Exchange Commission $153 million in a mutual funds settlement.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was mentioned in the February edition of Chicago Magazine in recognition of being named among the top five percent of securities litigation attorneys by Illinois Super Lawyers 2006 . This recognition is based on peer nominations and independent research.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was mentioned in a January 11 article published by The New York Times regarding former stock trader Daniel Calugar's agreement to settle the Securities and Exchange Commission's accusations that he improperly traded mutual funds after market hours.
Steven S. Scholes, SEC Defense, Trial
2005
Eugene Goldman was quoted in the January 9 issue of the Los Angeles Times on whether the SEC is lessening its zeal for tough enforcement. Over the past two years, SEC has hired more than 1,100 staff members. "They're adding attorneys. They're adding accountants. They're adding investigators," commented Gene. "Their settlement demands make us litigate for clients more than ever before. I don't see how that can mean less enforcement."
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Securities Litigation, Trial
2004
Eugene Goldman was quoted by The Wall Street Journal Online on October 15 in regard to the U.S. Securities and Exchange Commission increasing their technology budget. Mr. Goldman commented on the SEC's move to convert paper documents into searchable electronic files. "They are moving as much as they can away from paper," he commented. Mr. Goldman, who left the SEC enforcement division in 1983, recalls investigators would dig through boxes of documents, tagging relevant items and creating an index of contents. "It took a lot longer back then," he recalled.
Eugene I. Goldman, SEC Defense, Securities Litigation, Trial
Eugene Goldman was quoted by Reuters on March 30 in regard to the possibility that the New York Stock Exchange will be sanctioned by the U.S. Securities and Exchange Commission for failing to properly supervise its floor traders. The article reported that some commission members are considering fining the NYSE or altogether removing the exchange's ability to regulate itself, even though the NYSE has implemented structural changes under John Reed. "All of the changes would certainly have impact on deterring the Commission from launching a nuclear bomb on the exchange in the regulatory context. But if they feel there was a serious breakdown, the SEC will probably proceed with disciplinary measures," commented Mr. Goldman.
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Securities, Securities Litigation, Trial
2003
Eugene Goldman was quoted in two recently released Reuters wire stories regarding John Reed’s (NYSE's interim chief) proposed array of reforms. On November 12, Mr. Goldman commented that SEC Chairman William Donaldsan’s support of the new reform plan would probably blunt the impetus toward a full-fledged regulatory split at the NYSE. "I don’t think (the SEC will) do anything to disrupt the Reed reforms. As they continue to look at the issue, they are going to be looking at the NASD regulation model." On November 13, Mr. Goldman was quoted in a story regarding John Reed’s plan to install board members of the NYSE who are independent from the financial service industry. Mr. Goldman commented that the SEC will "keep a watchful eye over the issue of severing the regulatory business of the exchange. The creation of an independent board will be viewed by the SEC as a first step, but probably not the last step."
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Securities
Eugene Goldman was quoted in the November 8 issue of Financial Times regarding the NYSE’s continued governance reforms. Mr. Goldman commented that cases where regulation has been separated from an exchange's trading business have been well received by the SEC. The best example is the split between the NASD and the Nasdaq stock market.
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Securities
Eugene Goldman was quoted in the November/December 2003 issue of Corporate Board Member magazine in the article, "The SEC vs. Eliot Spitzer: Whose Turf Is This?" Mr. Goldman commented that it is possible that a compromise could be reached regarding proposed legislation that as part of a broader securities act would reduce the states’ ability to supersede the SEC's brokerage regulations with their own, so there are not 50 different sets of rules. "I think there needs to be a mechanism that would require the state to consult with the SEC before it attempts to impose these kinds of business conditions. If the SEC has no problem, fine. If it does, the state would have to defer to the SEC."
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Securities
Eugene Goldman appeared on CNBC's Squawk Box program on April 11. Mr. Goldman was interviewed on the SEC's plan to in examine whether unregistered hedge funds should be regulated, and SEC fraud actions against hedge funds.
Eugene I. Goldman, SEC Defense, Securities
2002
Eugene Goldman was quoted in the July 29 issue of The Wall Street Journal regarding the corporate oversight bill recently passed by Congress, which increases the role of the SEC. Mr. Goldman commented on the boost of the SEC resources, which, "will result in more cases being brought [and] that will contribute to the ability of class-action lawyers to piggyback on the SEC's efforts." He concludes by saying that as a result there could be heightened exposure for accounting firms.
Eugene I. Goldman, Corporate Responsibility and Governance, SEC Defense, Securities
1998
Steven S. Scholes was quoted in an April 19 article published by The Chicago Tribune regarding Monetta Financial Services' president, Robert Bacarella, being accused of securities fraud by the SEC. Mr. Scholes commented on the unprecedented case, which is the first case that involves personal trading by fund directors. "I think [SEC officials] are chilling people [who serve as fund directors] right now. The problem is it's patently unfair," he said.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was quoted in a March 3 article published by The Wall Street Journal regarding the SEC case against Monetta Financial Services for passing along new stocks to the personal brokerage accounts of three of its funds' directors. Mr. Scholes commented on this unprecedented case, stating that "we believe the case addresses industry-wide issues that the commission should address by rule."
Steven S. Scholes, SEC Defense, Trial
1997
Steven S. Scholes was quoted in a November 14 article published by The Daily Business Review regarding Randall J. Fons' appointment as the new director of the Southeast regional office of the Securities and Exchange Commission. Mr. Scholes has had several cases against Mr. Fons. "He knows the securities laws inside and out and is appropriately aggressive...He pursues cases very hard, and yet at the same time he is willing to listen to reason and mitigation factors and is easy to get an audience with," Mr. Scholes said.
Steven S. Scholes, SEC Defense, Trial
Steven S.Scholes was quoted in an October 13 article published by Best Week regarding Delaware Insurance Commissioner Donna Lee H. Williams filing suit against National Heritage Life Insurance Co. in order to recoup policyholders' losses. Mr. Scholes stated that his client, Ms. Williams, "filed a 17-count suit against 59 defendants in the $400 million collapse of National Heritage Life."
Steven S. Scholes, SEC Defense, Trial
1995
Steven S. Scholes was mentioned in a December 1 article published by Mealey's Litigation Report regarding a federal magistrate judge's decision that a receiver be appointed to supervise the loan servicing process of National Heritage Life Insurance Co.
Steven S. Scholes, SEC Defense, Trial
Steven S. Scholes was quoted in the December edition of the Securities Regulation & Law Report regarding the involvement of charitable organizations in a Ponzi scheme resulting in failing to win the U.S. Supreme Court review. Mr. Scholes has been appointed as receiver. "The far reaching effects of the decision below are exaggerated and unfounded, however even if this court were to give credence to those claimed effects, Petitioners' desired protection from the decision below must come from the Illinois legislature, not from this Court," Mr. Scholes said.
