Media Mentions
2008
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
Matthew J. Jacobs was quoted on June 10 in The National Law Journal regarding the role of general counsel in the U.S. government's investigations of companies and executives involved in stock options backdating. Mr. Jacobs noted that the issue of privilege is particularly complicated in backdating investigations. A controversial 2006 proposal would have created selective waiver in Federal Rules of Evidence 502, allowing companies to partially waive privilege to cooperate with government investigators but not share the information with anyone else. The proposal failed because the government could insist on disclosure from companies protected by partial waivers. "The privilege issues coming out of backdating are significant and they are troublesome. You want companies to be able to investigate allegations of wrongdoing and want them to report to the board and discuss with auditors without waiving privilege."
Matthew J. Jacobs, SEC Defense, Trial
James Sanders was quoted in the May 30 issue of the Los Angeles Daily Journal in the article, "SEC Names Insiders as Directors." The article discusses the recent selection of two lawyers within the Securities Exchange Commission to head the agency's regional offices in California. "I think it's good for the agency to promote from within," commented Mr. Sanders, who formerly headed the SEC in Los Angeles. "I think it makes a difference morale-wise."
James L. Sanders, SEC Defense, Securities Litigation
Andrew D. Kaizer was quoted in the May 22 issue of HedgeWorld Daily News in an article regarding the regulatory risks for hedge funds that trade the debt of troubled companies. To protect against litigation, a "big boy letter," in which a buyer agrees not to sue a seller for holding back private information, can be used by hedge funds that sit on failing companies’ creditor committees and that may be privy to inside information. Mr. Kaizer warns, however, that these letters draw the attention of the SEC as the parties of the letter admit to trading on non-public information. "You can’t use private contracts to get around federal securities laws. The SEC can still bring an action," he said.
Andrew D. Kaizer, SEC Defense, Trial
Andrew D. Kaizer was quoted in the May 21 issue of HedgeWorld Daily News in an article regarding the listing of special purpose acquisition companies (SPACs) in exchanges governed by different rules. Mr. Kaizer noted that some traders purchase warrants when volatility increases at the end of an SPAC’s life cycle. The purchase of warrants just a few months before the announcement of an acquisition target, however, can attract the attention of U.S. regulators and result in allegations of insider trading. Mr. Kaizer noted that some traders may prefer to do business in London where regulators take a principles-based approach and insider trading is less likely to result in criminal prosecution.
Andrew D. Kaizer, 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.
Edward P. Leibensperger, SEC Defense, Trial
Matthew J. Jacobs was quoted in an August 11 article published by The San Jose Mercury News regarding the impact of the jury decision to convict Greg Rayes of security fraud in the first criminal case associated with stock-option backdating. As a former U.S. attorney for the Northern District, Mr. Jacobs commented that there are still many cases in which the Justice department hasn't made a decision about whether or not to pursue criminal charges. "Certainly, everyone involved in these cases has taken note of the jury's verdict, and the government will probably be emboldened to bring more criminal cases," Mr. Jacobs said.
Matthew J. Jacobs, SEC Defense, Trial, White-Collar Criminal Defense
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
Andrew D. Kaizer was quoted in the June issue of Corporate Secretary in an article regarding the protection of company employees who bring inappropriate or illegal action to light. Mr. Kaizer commented on the comfort level that most companies have with using hotlines to protect the employee. "They have an interest in finding out themselves whatever issues exist, correcting them and as appropriate, self-reporting them” he said. “First, companies want to get it right, for its own sake. Second, they can point to the whistleblower hotline structure, if the DoJ or SEC come calling. It doesn't have to be perfect, but it must be a real genuine effort," Mr. Kaizer concluded.
Andrew D. Kaizer, SEC Defense, Securities Litigation, Trial, White-Collar Criminal Defense
James Sanders was mentioned in a June 1 article published by The National Law Journal regarding a judge's reversal of a jury verdict for Gateway executives. Mr. Sanders represented the former controller of Gateway in a new trial after a jury had found him guilty in March. The case brought about by the Securities and Exchange Commission was overturned due to a failure to present substantial evidence to make their claim.
James L. Sanders, SEC Defense, Trial, White-Collar Criminal Defense
Andrew D. Kaizer was quoted in a May 30 article published by Compliance Week regarding the Security and Exchange Commission’s current problems targeting insider trading. Mr. Kaizer explains that in order for the SEC to be effective, it needs to keep up with the changing times. "There are derivative ways to trade that don't appear obvious. This makes it a more daunting task for regulators," Mr. Kaizer stated.
Andrew D. Kaizer, SEC Defense, Trial
Matthew J. Jacobs was quoted in the May 23 edition of the Daily Journal in an article regarding the choice of the federal government to pursue options backdating charges against Gregory Reyes, former CEO of Brocade Communications Systems, Inc., and not against current Apple Inc. CEO Steve Jobs. Mr. Jacobs commented on the possibility that the SEC may or may not have enough evidence to fully prosecute Steve Jobs. "These things are always going to turn on the nuances," he said.
Matthew J. Jacobs, SEC Defense, Trial, White-Collar Criminal Defense
Andrew Kaizer was quoted in a May 22 Compliance Week article on SEC enforcement actions against those who aid and abet securities fraud. The article notes that it is more difficult to hold these secondary players liable in civil suits. Citing a 1994 Supreme Court ruling, Mr. Kaizer said, “After Central Bank, there is no provision for a private litigant to pursue someone for aiding and abetting.”
Andrew D. Kaizer, SEC Defense, Securities Litigation, 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, 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, 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, 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, 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, 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, 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.
