We have helped our clients avoid enforcement actions or criminal prosecution and, in cases where enforcement action was unavoidable, we have been able to minimize any penalty or associated relief. Those matters have involved a wide range of potential rule violations, including;
- Market manipulation
- Disruptive trading practices
- Mis-reporting off-exchange transactions
- False statements
- Improper sales practices
- Violation of customer segregated fund rules
- Uncommercial order entry for indicative opening prices
- Failures to supervise
- Inadequate anti-money laundering procedures
- FCPA violations
- Fraudulent brokering of mortgage-backed securities trades
- Purchase of improper mutual fund share classes for advisory clients
- Pump and dump schemes
- Improper allocation of private equity fund expenses
Often we are called upon to handle the internal investigation of these matters, before or during the Government’s inquiries. Many of these matters are accompanied by follow-on litigation, including class actions. We use our superior litigation judgment and strategic approach to achieve successful outcomes, working together with our nationally recognized class action counsel in putative class actions. We also handle high-stakes litigation between firms as well as suits by firms against customers.
Examples of successful outcomes by members of our Financial Markets & Products Group include:
- The U.S. Department of Justice informed our client that it intended to indict the client for market manipulation. We met several times with the prosecutors, both locally and in Washington D.C., and made detailed presentations to explain the client’s actions. After these presentations, the federal prosecutors decided not to bring criminal charges.
- We helped our client successfully navigate an enforcement action that was part of a sweep following the recent collapses of MF Global and Peregrine. The resolution set a new lowest penalty for the conduct at issue.
- Our client was investigated by the Chicago Mercantile Exchange for cancelling orders during the Indicative Opening Period. We helped our client convince CME that his trading activity was not improper.
- A broker-dealer client was investigated by the SEC for a complex trading pattern involving hedging long and shorter convertible bond positions with the underlying equity security. After reviewing the trading records, we met with SEC staff to explain how the trading method should not raise major legal or regulatory concerns. Shortly after the meeting, the SEC staff ended their investigation.
- Our FCM client was sued at FINRA by more than two dozen customers who had lost millions of dollars trading in 2008. We defeated their claims and recovered for our client $2 million on its counterclaims, which included attorneys’ fees.
- We obtained dismissal of a complaint in which a former employee of an FCM alleged that the FCM had discriminated against him for being a whistleblower.
- In recovering several hundred-thousand dollars from a former employee who sued our FCM client for a share of proceeds from his trades, we successfully settled the claim in favor of our client before issue was joined.
- We successfully defended both the Chief Executive Officer and the President of a billion-dollar public holding company in an internal investigation and SEC, DOJ and IRS investigations relating to FCPA and tax issues. Neither client was prosecuted.
- After the SEC’s Office of Compliance and Inspections (OCIE) issued a deficiency letter to our regional brokerage firm client, we helped our client resolve OCIE’s concern with no enforcement action by counseling our client on enhancing its anti-money laundering program and making OCIE comfortable that the enhancements were satisfactory and no enforcement referral was warranted.