Federal and state laws regarding the issuance and trading of securities and financial management currently govern many aspects of domestic and international business activity. The Sarbanes-Oxley Act has posed new challenges for U.S. corporations and their officers, exposing them to new and more robust enforcement tools. The bursting of the technology bubble in the early 1990s, the allegations of corporate corruption in the late 1990s, and the investigations of mutual fund timing, late trading, and options backdating, to name a few, have spawned active enforcement initiatives by the Securities and Exchange Commission (SEC) and state attorneys general, as well as numerous private class actions for recovery of damages. Now the subprime crisis is the cause of a new wave of securities litigation. In this complex environment, clients need litigation counsel knowledgeable about the securities laws and experienced in the kind of investigations, enforcement actions, and regulatory and private litigation brought under them.
A substantial part of the litigation we handle at Zuckerman Spaeder LLP involves claims under the securities laws. Our lawyers have handled SEC, Department of Justice, and state attorney general investigations; shareholder class actions for monetary damages; and government enforcement actions involving the issuance and trading of securities, financial reporting, the conduct and duties of investment advisors, and the operation of mutual and hedge funds. Our clients have included the CFOs, directors, officers, and heads of business units of publicly traded corporations; mutual fund portfolio managers; the broker in charge of one of the largest market-timing units on Wall Street; hedge fund operators; and shareholders defrauded in the purchase of securities. Our representations have involved criminal, SEC, and internal investigations; civil and criminal trials and arbitrations; and civil lawsuits, including stockholder class actions, proxy fights, and insider trading allegations.
Enforcement and investigative proceedings before the SEC can affect a wide range of activities by companies, individual officers and directors, and the professionals who advise them, including accountants and attorneys. The investigations we handle for these types of clients involve allegations of insider trading, questionable foreign payments, failure to perform professional obligations, violations of fiduciary duties imposed on investment advisors, financial misstatements and non-disclosures, and matters related to disclosure and other public communications. We are as familiar with the inner workings of the SEC as we are with the substantive issues under investigation by them. When necessary, we also deal with the parallel criminal or congressional process. The firm has appeared before the SEC on behalf of individual clients in many high-profile government investigations, including Enron, AOL/Time Warner, Freddie Mac, and the mutual fund industry investigation.
While the firm is able to vigorously contest government investigations, in many cases working closely with SEC staff to facilitate their understanding of a case will help the staff arrive at a decision that is in the best interests of our client.
When suspicious activity is brought to light by a government agency or by the company in question, internal investigations require discreet, comprehensive, and speedy representation that minimizes liability. Zuckerman Spaeder regularly undertakes such representation for private and public entities, addressing such issues as insider trading, questionable payments, money laundering, corporate governance, wrongdoing by employees or subsidiaries, and books and records violations. We also serve as counsel to special committees of boards of directors evaluating companies' conduct or operations, in addition to creating effective internal compliance programs.
Experience
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Represented a partner in a national accounting firm in an SEC proceeding to exclude him from practicing before the commission.
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Represented a former Enron executive in an SEC investigation and shareholder class action lawsuits filed against him and others as a consequence of the collapse and bankruptcy of the company.
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Defended a major law firm in a 10b-5 matter relating to an alleged failure to disclose in a registration statement and a related legal malpractice matter.
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Represented the head of one of the largest mutual-fund-timing units at a United States brokerage house in SEC charges arising out of allegations that the brokerage house clients illegally market timed more than 85 mutual fund families.
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Represented the portfolio manager of one of the largest growth funds in the United States in an SEC investigation and trial of charges arising out of allegations that investors were permitted to market time his mutual fund.
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Represented a portfolio manager in connection with an insider trading investigation by the SEC.
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Represented a hedge fund in a successful proxy fight for seats on the board of directors of a publicly traded corporation.
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Defended the former officer of a large commodities trading company in a criminal trial of charges that the purchaser of the company was defrauded.
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Appeared on behalf of a corporation and one of its employees in an SEC investigation of an alleged $500 million overstatement of income.
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Represented an investor in a class action against an issuer and its officers alleging fraudulent and misleading statements in connection with a merger.
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Conducted an internal investigation of allegations of accounting irregularities on behalf of a public company.
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Represented a hospital staffing company and its executives in class action and SEC enforcement action.