Alexis Yee-Garcia is an associate in Orrick's San Francisco office and a member of the White Collar, Investigations, Securities Litigation & Compliance Group.  Alexis's practice focuses on internal investigations, compliance issues, and securities class actions and regulatory enforcement actions.

Prior to joining Orrick, Alexis was a legal fellow at the California Department of Social Services.  Prior to law school, Alexis worked in university admissions and administration at Washington and Lee University, St. Lawrence University and Vanderbilt University.  While at Vanderbilt, she directed a number of community outreach organizations, including the nation's oldest and largest Alternative Spring Break program.

Recent engagements include the following:

  • Various internal investigations on behalf of a Fortune 50 company involving alleged inventory manipulation
  • Representation of a Fortune 500 company in an investigation by the Securities and Exchange Commission into compliance with Bank Secrecy Act reporting requirements
  • Representation of a public company in a securities class action alleging violations of Sections 11 and 12(a) of the Securities Act of 1933, including favorable settlement of all claims
  • Representation of the former General Counsel of a public company in an SEC enforcement action alleging backdating of stock options, including resolution on a non-fraud basis prior to trial
  • Pro bono representation of a class of immigrants detained in northern California, including successful settlement granting increased telephone access for legal representation for those individuals
  • Pro bono representation in support of greater liability for negligent firearms dealers

Posts by: Alexis Yee-Garcia

Supreme Court Weighs Insider Trading: Friends, Family, and Others

US Capitol Dome

On October 5, 2016, the Supreme Court heard oral arguments in US v. Salman, a closely-watched insider trading case in which the Ninth Circuit held that, where the insider had a close personal relationship with the tippee, a remote tippee could be liable for insider trading even in the absence of a pecuniary benefit to the tipper. In so holding, the Ninth Circuit declined to extend the Second Circuit’s 2014 decision in US v. Newman, which held that insider trading requires proof of “a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.”  Early analysis of the arguments in Salman suggests that the Court will, as some have previously predicted , “split the baby” by leaving Salman’s conviction in place while also adopting a rule that would not affect the result in US v. Newman.  Given the Court’s decision to grant certiorari in Salman rather than Newman, this result seems all the more likely.

Bassam Salman was convicted of insider trading after trading on information he received from Michael Kara, his brother in law, who in turn received that information from his brother, Maher Kara. Salman was aware that the information came from Maher, a Citigroup banker working on various health care deals and sharing information very openly with his brother.  Michael also traded on the information and, although he told Maher that he was not trading, Maher suspected otherwise.  Nevertheless, Maher never received any financial or other concrete benefit in the exchange, though there was evidence that he and his brother had a close relationship.

In Salman’s brief, he argued that his conviction was inconsistent with the Court’s seminal 1983 insider trading decision in SEC v. Dirks as interpreted by the Second Circuit in Newman: that insider trading requires proof of “at least a potential gain of a pecuniary or similarly valuable nature.”  That is, to the extent that Maher offered material, non-public information to his brother in violation of his confidentiality obligations to his employer, that activity did not violate insider trading laws because Maher did not receive anything concrete in exchange.

From the outset of oral argument, several justices were noticeably skeptical of Salman’s arguments. Justices Ruth Bader Ginsberg and Anthony Kennedy questioned whether Salman’s conviction was just analogous to standard accomplice liability.  Justice Kennedy observed that where the tippee does the trading and benefits thereby, as in Salman’s case, the tippee is really the recipient of the “gift” of the tip and by traditional analysis is an accomplice to the tipper’s wrongdoing.

In addition, several justices repeatedly went back to Dirks, in which the Court said that it might be possible to infer the required personal benefit “when an insider makes a gift of confidential information to a trading relative or friend.”  As Justice Kennedy observed, Dirks suggested that “there’s a benefit in making a gift,” even if there is no pecuniary exchange.  Justices Elena Kagan and Stephen Breyer both observed that Salman’s suggested approach would be a significant departure from most courts’ interpretations of the original Dirks holding.  Justice Kagan noted that Dirks seemed to indicate that “it’s not only about when there’s a quid pro quo from the tippee to the tipper, but when the tipper makes a gift to the tippee, and in particular a relative or friend.”  Justice Breyer noted outright that if the court embraced Salman’s approach, it was “really more likely to change the law that people have come to rely upon than it is to keep to it.”

The government, by contrast, had urged that there was no conflict among the reasoning upholding Salman’s conviction, SEC v. Dirks, or US v. Newman.  The government urged that Michael and Maher had the kind of “meaningfully close personal relationship” that was not present in Newman, a case that involved several levels of remote tippees, none of whom had particularly close friendships much less a family relationship as in Salman.  By this logic, the result in Salman was entirely consistent with both Dirks and Newman because the “personal relationship” was sufficiently different and satisfied the precedent established by Dirks.

When the government lawyer took the podium, the justices continued to pose challenging questions, but many justices signaled an apparent belief that the government’s position was more acceptable. Some justices did seem concerned that under the government’s proposed rule, non-relatives or non-friends might be swept into liability, but Deputy Solicitor General Michael Dreeben seemed ready to concede some ground on that front.  Toward the end of the argument, Justice Kagan asked whether the court could “separate out that strange, unusual, hardly-ever-prosecuted situation” of non-friends or non-relatives facing liability and Dreeben said he would be “fine with that.”  As described above, his response may open the door for the Court to uphold Salman’s conviction while leaving Newman unchanged.

SDNY Prosecutors Score First Post-Newman Insider Trading Conviction


On August 17, 2016, jurors in a New York federal court convicted Sean Stewart on criminal charges of conspiracy, securities fraud, and tender offer fraud after more than five days of deliberation.  Stewart, a former investment banker for JPMorgan and Perella Weinberg Partners, was charged with leaking confidential information about health care mergers to his father, Robert Stewart, on at least five occasions over the course of four years.  The case provides a victory to Preet Bharara, the United States Attorney for the Southern District of New York, after a series of setbacks in the form of unfavorable decisions in the aftermath of the Second Circuit’s decision in U.S. v. Newman, the repercussions of which have been covered extensively on this blog (see here, here).  As the first conviction post-Newman, U.S. v. Stewart provides some insight into the kinds of facts that might support an insider trading charge in the Second Circuit going forward and is thus worthy of analysis.


Even Whistleblowers Must Pay the Piper


In a heavily redacted decision issued on April 5, 2016, the SEC approved the claim of one whistleblower and denied the claim of another for providing information related to an unidentified enforcement action.  The SEC awarded $275,000 to the primary claimant (Claimant 1) but offset that amount by the monetary obligations due related to a separate Final Judgment.  Although the April 5 order was heavily redacted, the publicly available information confirms that the $275,000 award was based on a percentage of the monetary sanctions from both the SEC case and a related criminal action.  This is the first time an SEC order has required a tipster to spend whistleblower proceeds to settle a court-ordered debt.


Storm Warning for Safe Harbor


On February 29, 2016, the Supreme Court denied certification in Harman International Industries Inc. et al. v. Arkansas Public Employees Retirement System et al., thereby leaving unanswered a number of questions related to the Safe Harbor provision of the Private Securities Litigation Reform Act (PSLRA).  The petitioners, defendant Harman International Industries Inc. (“Harman” or “the Company”) and related individual defendants, argued that the D.C. Circuit Court of Appeals erred when it reversed the district court’s decision granting Harman’s motion to dismiss.  In declining to hear the case, the Supreme Court failed to resolve a circuit split concerning the relevance of state of mind to the efficacy of cautionary language.


New Year, New Priorities for the SEC’s Office of Compliance Inspections and Examinations


On January 11, 2016, the SEC announced its Office of Compliance Inspections and Examinations (OCIE) priorities for the year .   The announcement included several new areas of focus, including liquidity controls, public pension advisers, exchange-traded funds (ETFs), product promotion, and variable annuities.   Hedge fund and mutual fund managers, private equity firms, and broker-dealers – in particular those that deal with retirement investments – would be wise to take note of these new areas of interest.  As in past years, enforcement actions in these areas are likely to follow.


Merrill Lynch v. Manning: SCOTUS to Decide Scope of Federal Jurisdiction in Certain Securities Cases


On December 1, 2015, the Supreme Court heard argument in Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning.  In that case, the Court will resolve the split in the Circuits as to whether Section 27 of the Securities Exchange Act of 1934 (“the ’34 Act”) provides federal jurisdiction over claims that are asserted under state law but are based on violations of regulations adopted under the ’34 Act.


The End of Disclosure Only Settlements in M&A Cases? Not So Fast.

Stock Ticker

Disclosure-only settlements have been popular in the past – last year, about 80% of settlements in M&A-related lawsuits were for disclosures only, according to Cornerstone Research – but lately they have come under scrutiny.  The Delaware Court of Chancery has issued opinions refusing disclosure-only settlement agreements before, noting that at times in these cases “there is simply little to commend the process of weighing the merits of a ‘settlement’ of litigation where the only continuing interest is that of the plaintiffs’ counsel in recovering a fee.”  The incentives of attorneys on both sides can be such that “the potential claims belonging to the class [are not] adequately or diligently investigated or pursued.”


Friend of the Court and Friend of the Little Guy? State Securities Regulators Tell D.C. Circuit in Amicus Brief that SEC’s Regulation A+ Is Too Expansive in Defining “Qualified Purchasers”

Wall Street

On September 2, 2015, the North American Securities Administrators Association (NASAA) filed an amicus brief siding with Montana and Massachusetts in a bid to overturn the SEC’s new capital-raising rule, titled Regulation A but commonly referred to as Regulation A+.  The NASAA, a non-profit association of state, provincial, and territorial securities regulators in the United States, Canada, and Mexico, includes securities regulators from all 50 states and the District of Columbia.  The organization’s purpose is to “protect investors from fraud and abuse in connection with the offer and sale of securities.”


Don’t touch that remote (tippee)? Salman reflects Ninth Circuit’s view on Newman


In United States v. Salman, the Ninth Circuit recently held that a remote tippee could be liable for insider trading in the absence of any “personal benefit” to the insider/tipper where the insider had a close personal relationship with the tippee. This opinion is significant in that it appears at first glance to conflict with the Second Circuit’s decision last year in United States v. Newman, in which the court overturned the conviction of two remote tippees on the grounds that the government failed to establish first, that the insider who disclosed confidential information in that case did so in exchange for a personal benefit, and second, that the remote tippees were aware that the information had come from insiders. READ MORE

Pay Ratio Rule Continues Down Slow Road After Public Senatorial Scolding

Coins and Hourglass

On Friday June 5, 2015, the SEC made incremental progress toward finalizing the “pay ratio” rule required by the 2010 Dodd-Frank Act by publishing a memo from the Division of Economic and Risk Analysis (DERA memo) that addresses questions about how that pay ratio will be calculated for the purposes of the law.