BOSTON (October 31, 2011) — International law firm McDermott Will & Emery LLP today announced that the former Chief Investment Officer of State Street Global Advisers has been cleared of all charges brought against him by the U.S. Securities and Exchange Commission (SEC) following a three week trial in Boston, Massachusetts before the honorable Chief Administrative Law Judge Brenda Murray.
The SEC had charged John (Sean) P. Flannery, a professional who has enjoyed a sterling reputation during a 27-year career in the investment business, in connection with several investor letters concerning the underperformance of State Street bond funds exposed to subprime securities sent by State Street to investors during July and August 2007. The SEC had also sought to bar him from the industry.
In a 59-page decision released late on October 28th, Chief Judge Murray rejected every allegation brought by the SEC regarding the role Mr. Flannery played in the publication of the two letters. She specifically found that Sean Flannery testified with "candor and conviction,” and that "those who worked with him believe him to be unusually honest, capable and ethical." Chief Judge Murray found that none of the investor letters in question were false or misleading in any respect, that Flannery's edits to the letters were intended to make them more accurate, that there were no violations of State Street's Compliance policies, and that he involved State Street's lawyers and other senior executives in the letter review process in order to ensure that the letters were accurate.
"While we are deeply gratified by the outcome of this trial, this is a case that we believe should never have brought against our client,” said Mark W. Pearlstein, lead trial attorney and partner in the Boston office of McDermott, Will & Emery. “Chief Judge Murray's thoughtful decision represents complete vindication for Sean Flannery, and demonstrates that all of his actions were undertaken with integrity, and with an unwavering focus on the best interests of investors. It is unconscionable that following a long and distinguished career in the investment industry, Mr. Flannery was forced to spend several years living under a cloud while fighting these baseless allegations."
In addition to Mr. Pearlstein, the McDermott team included Frederic (Rick) Firestone, Laura McLane, K.C. Goyer, David H. Chen and Jason Crow.
The full decision can be viewed on the SEC website by clicking here.
McDermott’s SEC Enforcement Defense Group is composed of lawyers across the country, including former senior members of the SEC Division of Enforcement, all of whom have substantial experience covering the full spectrum of securities enforcement activity. Our lawyers have extensive experience with the Chairman, Commissioners, Senior Enforcement Officers and General Counsel. We have represented the largest financial services firms, broker dealers, investment advisors, hedge funds, public companies, accounting firms, underwriters, audit committees and officers, directors and senior management in investigations and enforcement proceedings brought by the SEC, the Financial Industry Regulatory Authority (FINRA), the Public Company Accounting Oversight Board (PCAOB), stock exchanges, and other self-regulatory organizations, as well as various state securities enforcement agencies.
About McDermott Will & Emery
McDermott Will & Emery is a premier international law firm with a diversified business practice. Numbering more than 1,000 lawyers, we have offices in Boston, Brussels, Chicago, Düsseldorf, Houston, London, Los Angeles, Miami, Milan, Munich, New York, Orange County, Paris, Rome, Silicon Valley and Washington, D.C. Extending our reach to Asia, we have a strategic alliance with MWE China Law Offices in Shanghai.