SEC and FINRA Investigations and Litigation

Rogers & Hardin attorneys have significant experience representing firms and individuals in numerous investigations conducted by the SEC, DOJ, FINRA, other securities industry self-regulatory organizations, and state securities regulators. We represent clients at each stage of the investigatory process: responding to informal inquiries and document requests, preparing for and providing on-the-record testimony, preparation and submission of the "Wells" response, and trying any resulting litigation.

We have represented many executives and board members in connection with government investigations, including chief executive officers, chief financial officers, chief operating officers, and chief accounting officers of NYSE, NASDAQ, and other listed companies spanning a variety of industries. We have a special depth of experience in the financial services sector, obtained through decades of representing broker-dealers, investment advisers, and their supervisors and registered representatives, as well as other regulated and non-regulated entities.

We believe the best approach to guiding clients through regulatory investigations begins with a thorough understanding of the legal and regulatory environment, and is solidified with a mastery of the facts of each particular case. This approach enables us to give sound advice to our clients facing regulatory scrutiny. Our credibility and experience in this area has also enabled us to persuade regulators in many cases not to institute threatened enforcement actions.

Our deep experience results from our having represented clients in regulatory investigations in a wide array of subject matters, including:

• Failure to supervise
• Insider trading
• Accounting and financial reporting fraud, including:
• Revenue recognition
• Reserve accounting
• Allowance for loan losses
• Related party transactions
• MD&A disclosure
• Fiduciary obligations
• Pension consulting
• Research and investment banking conflicts of interest
• Market manipulation
• PIPE transactions
• Sales practices
• Market timing / late trading

We work very hard to assist our clients in avoiding litigation, and we have frequently succeeded in doing so. And when our clients have determined to settle a matter, we have negotiated fair resolutions on their behalf. When all else fails, however, we have the litigation and trial experience and resources to defend enforcement actions on behalf of our clients, and we have obtained favorable results for our clients. Our extensive litigation and trial experience is also critical to evaluating strategy during the Wells and settlement process, when carefully weighing the risks of going to trial is critical to a successful result for our clients.

We have deep and successful experience in representing officers and employees of public companies in connection with governmental and audit committee investigations. Representative examples of this public company experience include:

• Successfully defended a chief executive officer in an SEC action filed in federal district court alleging false public disclosures. After a bench trial, the Court dismissed all charges.
• Successfully defended an executive officer of an NYSE company in an SEC insider trading investigation related to earnings announcements. After receiving a Wells notice, we persuaded the SEC not to pursue charges against our client.
• Successfully defended the president of a NASDAQ company in an audit committee and joint DOJ / SEC investigation into credit reporting and alleged earnings smoothing. We persuaded the investigators not to file an action.
• Successfully defended an executive of a NASDAQ company in an audit committee and SEC investigation into vendor allowances and revenue recognition. We persuaded the investigators not to file an action.
• Successfully defended a chief accounting officer of an NYSE company in an audit committee and joint DOJ / SEC investigation into vendor rebates and allegations of fraud. We persuaded the investigators not to file an action.
• Successfully defended a chief financial office of an NYSE company in an audit committee and SEC investigation into stock options backdating. We persuaded the investigators not to file an action.
• Successfully defended numerous directors, executives, traders, and other individuals in SEC insider trading investigations. In each case we persuaded the investigators not to file an action.

We have particularly broad and deep experience in representing officers and employees of financial services companies in connection with governmental and audit committee investigations. Representative examples of this financial services industry experience include:

• Successfully defended a manager of a national broker-dealer/investment adviser in connection with an SEC investigation into conflicts of interest arising out of pension consulting services. After receiving a Wells notice, we persuaded the SEC not to pursue charges against our client.
• Successfully defended four managers of a national broker-dealer in a joint SEC/NYSE investigation into hedge fund market timing practices. After receiving a Wells notice, we persuaded the SEC not to pursue charges against our client.
• Successfully defended a manager of a national broker-dealer in an SEC investigation into allegations of mutual fund switching. We persuaded the investigators not to file an action.
• Successfully defended a manager of a national broker-dealer before the NASD District Business Conduct Committee. After a full evidentiary hearing, we persuaded the panel to dismiss all claims.
• Successfully defended a manager of national broker-dealer in an SEC investigation into allegations of parking and interpositioning. After pre-Wells conferences, we persuaded the SEC not to pursue charges against our client.
• Successfully defended a regional manager of a national broker-dealer in an SEC investigation into multi-class issues in the sale of mutual funds. After pre-Wells conferences, we persuaded the SEC not to pursue charges against our client.
• Successfully defended a manager of a national broker-dealer in an SEC investigation into a Ponzi scheme conducted by a broker. After Wells notice, we persuaded the SEC not to pursue charges against our client.
• Successfully defended a broker-dealer in an extensive NASD investigation into disclosure and sales practices related to Section 529 plans. We persuaded the investigators not to pursue charges against our client.
• Successfully defended a regional broker-dealer in an SEC investigation involving allegations of market manipulation. We persuaded the SEC not to pursue charges against our client.
• Successfully defended several registered representatives in an NASD inquiry into broad-ranging issues including mutual fund share classes, churning, suitability, and sales contests. After Wells notices, we persuaded the investigators not to pursue charges against our client.
• Successfully defended a national broker-dealer and its managers in an action filed by a state securities commission alleging fraud in connection with unregistered securities and penny stocks. We obtained a favorable outcome through litigation in court and in an administrative proceeding.