White Collar Crime Defense, Investigations, and Corporate Compliance

The Group has extensive experience representing auditors, accounting firms, and their employees in a broad range of matters involving the SEC, DOJ, PCAOB, and state Attorneys General. We have counseled clients at every step of regulatory investigations, including through the SEC’s Wells process, in interviews and depositions in civil and criminal matters, and in preparing for and testifying at trials. We have also successfully represented firms and individuals in all aspects of civil cases arising out of government investigations and in audit malpractice lawsuits.

For example, we have represented

• Two audit partners of a Big Four accounting firm in an SEC investigation relating to the Chinese member firm’s audit of a Chinese company.
• An auditor client served with a Wells notice indicating that the SEC intended to pursue charges against him relating to allegations of improper valuations of illiquid assets. We persuaded the SEC not to bring an enforcement action against him.
• A senior manager of a Big Four accounting firm in a PCAOB investigation relating to audit documentation practices. The matter was resolved without any charges being filed against our client.
• A Big Four accounting firm in an SEC investigation of whether a large multinational company made material misrepresentations in its financial statements.
• A partner of a Big Four accounting firm in a DOJ criminal investigation of alleged tax shelters. After an investigation, the DOJ declined to bring charges against our client.
• A Big Four accounting firm in a four-year litigation alleging audit malpractice based on the firm’s failure to detect embezzlement by its client’s controller. The matter ended in a favorable settlement for our client. During the course of the litigation, we prevailed on two important legal issues in audit malpractice cases.
• A Big Four accounting firm in DOJ and SEC investigations into stock options backdating by the accounting firm’s clients.
• A Big Four accounting firm in an investigation conducted by the NY Attorney General, SEC, and DOJ into an allegedly fraudulent finite reinsurance transaction. We also represented the same client in additional investigations conducted by the SEC and DOJ into other firm clients’ finite reinsurance transactions.
• A Big Four accounting firm in DOJ and SEC investigations, as well as related investor lawsuits filed in Ohio Federal Court, arising out of the firm’s audits of National Century Financial Enterprises, an Ohio-based healthcare finance company that was involved in a $3 billion Ponzi scheme. No charges were filed against the firm.
• A manager at a Big Four accounting firm in DOJ and SEC investigations and in related civil lawsuits, arising out of the collapse of Adelphia Communications. After the SEC issued a Wells notice, the SEC declined to charge our client.
• A Big Four accounting firm in a DOJ False Claims Act investigation related to guaranteed student loans.
• Arthur Anderson in investigations conducted by the Connecticut Attorney General, in others conducted by the Connecticut State Board of Accountancy, and in related investor lawsuits arising out of its audits of Colonial Realty Co., a real estate investment company that was involved in a massive Ponzi scheme.
• Arthur Anderson, with co-counsel, in criminal and civil matters arising out of the collapse of Enron, including the federal criminal trial of the firm.

We are frequently called upon to represent broker-dealers, investment advisors, and individuals in connection with SEC, CFTC, FINRA, and DOJ investigations, including SEC and FINRA insider trading investigations. In other matters, we have represented

• A broker-dealer of securities and commodities in connection with investigations conducted by the CFTC. Following a Wells Notice alleging numerous violations of the CFTC’s rules and regulations, we submitted a response that convinced the CFTC to drop some of its charges.
• A large national brokerage firm in a pending SEC investigation into public disclosures and custody practices of a subsidiary investment advisor. We convinced the SEC, after a three-year investigation, to drop all charges against the investment advisory firm.
• A large national investment advisory firm in connection with SEC investigations into mutual fund disclosures. As a result, the SEC did not file any charges.
• An online broker-dealer in connection with a FINRA inquiry into private placement disclosures.
• A broker-dealer in connection with twin SEC and DOJ investigations into possible market manipulation.

We have extensive experience representing financial institutions in connection with high-profile matters. For example, we have represented

• A major global financial institution in connection with all matters related to the Madoff Ponzi scheme, including lawsuits brought by a number of Madoff feeder funds. We have assisted in responding to subpoenas served by government regulators, the Madoff Trustee, and various court-appointed receivers and have provided advice on complex issues related to the Securities Investor Protection Act, bankruptcy law, and securities law.
• A regional bank, in connection with the collapse of the Madoff Ponzi scheme, relating to orders by custodial account holders directing the bank to invest their money with Madoff. Our team defended multiple cases, including a putative class action, in state and federal court. In addition, we successfully settled a lawsuit filed by the Connecticut banking commissioner.
• An international bank and several of its officers in SEC and state Attorney General investigations, as well as a federal securities lawsuit brought by Freddie Mac and Fannie Mae, in connection with the sale of over $30 billion in RMBS.
• A major global financial institution in connection with a complex, ongoing DOJ and SEC investigation relating to the purchase and sale of RMBS. We conducted an internal investigation and continue to respond to government requests for documents and information.
• A significant debit card issuer, in investigations conducted by the Attorney Generals’ offices in Florida, Massachusetts, and New York focused on marketing practices that allegedly steered prospective card holders to programs charging high fees and alleged improper fees such as PIN fees, dormant account fees, and insufficient fund fees. We persuaded the government agencies not to pursue the matter.

We routinely advise hedge funds on compliance issues, and we have represented hedge funds in investigations conducted by the SEC, FINRA, and the U.S. Attorney’s Offices in New York and Connecticut, involving alleged insider trading, fund trading practices, false statements and material omissions, and alleged market manipulation. In several matters, we persuaded both the SEC and DOJ not to file charges. For example, we have represented

• A New York-based hedge fund investigated by the FBI and the U.S. Attorney’s Office for alleged insider trading. We persuaded federal authorities not to pursue the matter.
• A hedge fund and affiliates in a putative insider trading class action filed in federal court in Connecticut. We avoided the injunctive relief sought by the plaintiffs and filed motions that resulted in the dismissal of the case at the pleading stage.
• A hedge fund in connection with SEC and FINRA inquiries into fund trading practices. As a result, no charges were filed.
• A principal of a hedge fund charged criminally with securities fraud and wire fraud, and civilly with securities violations. After we conducted a lengthy internal investigation and aggressively litigated discovery issues and motions to dismiss, the government abandoned the securities fraud charges against our client.

When representing individual clients, through every stage of an investigation and/or prosecution, we devote the same level of professional service as we provide our corporate clients. We have represented numerous individuals, including the following:

• The former Chief Operating Officer (COO) and Chief Financial Officer (CFO) of an Uzbekistan-based telecommunications provider who were alleged to have violated the FCPA.
• A government official and state senator in a federal investigation into alleged violations of federal campaign finance laws.
• An individual in connection with a federal bank fraud investigation relating to the Troubled Asset Relief Program.
• An attorney being prosecuted by the U.S. Attorney’s Office for the District of Connecticut in connection with his role in a multimillion-dollar mortgage fraud scheme.
• A COO of a broker dealer investigated by the SEC and under FINRA in connection with high-speed trading. We successfully persuaded federal authorities not to pursue the matter.
• A bank executive in connection with a government antitrust investigation into allegations that individuals and firms colluded in municipal tax-lien auctions.
• A corporate executive alleged to have violated provisions of the Clean Water Act.
• Individual defendants in connection with criminal cases and IRS investigations concerning the alleged structuring of cash deposits to avoid the filing of Currency Transaction Reports.
• An individual in an investigation concerning the sale of antiques made of rhinoceros horns.
• An individual alleged to have violated the Espionage Act by improperly retaining classified documents while stationed in Iraq.
• The President and CEO of a nonprofit organization in connection with an investigation by the U.S. Attorney’s Office for the Eastern District of New York into our client’s relationship with a vendor and use of the nonprofit’s funds.
• A CVS executive who faced 23 felony counts related to an alleged scheme to bribe a Rhode Island state senator. The federal criminal case was prosecuted by the DOJ’s Public Integrity Division and the U.S. Attorney’s Office for the District of Rhode Island. After a month-long trial in federal court in Rhode Island, the jury acquitted our client on all counts.

Our team’s combined experience in conducting investigations both in the private sector and in government make it especially qualified to pursue internal investigations thoroughly and with the exercise of solid judgment. Clients have retained us to conduct these frequently sensitive investigations:

• An international nonprofit organization in connection with embezzlement by the organization’s former CFO. Conducted the internal investigation and interacted with the DOJ in bringing the matter to a successful close.
• A U.S. subsidiary of an FTSE 100 company in a four-year government investigation alleging that the subsidiary had supplied defective items to the U.S. military. Following the government’s seizure of records and electronic data pursuant to a search warrant, we conducted an internal investigation that involved interviewing over 100 individuals, reviewing thousands of e-mails and voluminous records, engaging scientific experts to contest the government’s theories, and assisting in a public relations effort designed to handle the adverse publicity associated with the government’s allegations. We convinced the U.S. Attorney’s Office not to pursue criminal charges against the company and its executives, persuaded the government not to suspend or debar the subsidiary from further government contracting, and reached a favorable civil settlement of the government’s false claims suit.
• A university, to conduct an internal investigation following the accidental death of a graduate student while working in a school facility. A report and findings were generated, and no litigation resulted.
• A special committee of a school’s board of directors, to conduct a comprehensive internal investigation of allegations that the director was sexually touching students, bullying students, and engaging in other inappropriate behavior. The investigation included interviews of more than 50 individuals; review of e-mails, documents, and social media; review and study of applicable standards in the US and abroad; and preparation of a report with findings and recommendations.
• A major bank, to conduct an internal investigation into the bank’s knowledge of the conduct of a borrower who was under federal investigation for bank fraud and tax evasion.
• A college, to conduct an investigation into the propriety of interactions of the college’s campus security force with a visiting faculty member in his home and to review and make recommendations on relevant security policies and protocols.
• A nonprofit community-based organization, to investigate allegations that one of its program directors engaged in inappropriate contact with minors enrolled in one of its summer programs.
• A hospital, to conduct an investigation into allegations of misconduct by a hospital nurse.
• A church, to conduct an internal investigation to determine the extent of the church’s losses following the discovery that one of its parishioners had engaged in a long-running Ponzi scheme, and to make a referral to the U.S. Attorney’s office.
• A Fortune 100 financial services company, to conduct an internal investigation of whistleblower allegations by a former employee who claimed that he was terminated because he raised concerns about a new product being developed by the company.
• A major defense contractor in response to a directive from the U.S. Department of State concerning the export of aircraft to an African country.
• A Fortune 500 company that was defrauded by company executives of over $2 million through a false invoicing scheme. We brought the matter to federal prosecutors, who then pursued it against the executives and two outside accomplices. The executives both received substantial prison sentences.