Blake L. Osborn

Managing Associate
Securities Litigation, Investigations and Enforcement
Read full biography at www.orrick.com

Blake Osborn, a managing associate in the Los Angeles office, is a member of the Litigation Division, particularly the Securities Litigation, Investigations and Enforcement Group. 

Mr. Osborn focuses his practice on complex commercial litigation matters, including the representation of United States and foreign public companies, directors and officers in securities class actions, SEC and DOJ investigations and enforcement actions, shareholder derivative actions, and private actions brought under federal and state securities laws. 

Significant recent engagements include the following:

  • Represented international trust entities and foreign public company in action alleging alter ego and RICO liability.
  • Represented former President and COO of Countrywide Financial Corp. in connection with various federal and state securities lawsuits. 
  • Represented founder and CEO of United Kingdom-based automobile service and repair business in shareholder litigation. 
  • Representing city employee in connection with SEC action over alleged misstatements in connection with the issuance of municipal bonds. 

Mr. Osborn has also dedicated significant time to pro bono representations in civil rights, unlawful detainer and domestic violence cases.

Before joining Orrick, Mr. Osborn worked as a Deputy Public Defender in Orange County. In that capacity, Mr. Osborn individually tried twelve misdemeanor cases, argued more than twenty motions, and managed an extensive case load by representing clients at pretrial conferences.

Blake Osborn

The SEC Critiques Itself – Could Changes to SEC Enforcement Investigations Be On The Way?

Last week, the SEC’s Office of Inspector General (“OIG”) released its semiannual report to Congress, which details the OIG’s independent and objective audits, evaluations, investigations and other reviews of the SEC’s programs and operations in order to prevent and detect fraud, waste and abuse in SEC programs and operations, and other vulnerabilities the SEC faces.  In the most recent report, the OIG was critical of various programs, but most notably: (1) recommended a new framework to increase the Office of Compliance Inspections and Examinations coverage of registered investment advisors, and (2) informed Congress it was conducting a further evaluation on the SEC’s enforcement investigations to ensure that investigations are coordinated internally and across SEC divisions and offices.

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SEC Chair Warns Silicon Valley That Unicorns Need To Be Watched and Monitored

Speaking last week at the SEC’s and Rock Center’s Silicon Valley Initiative at Stanford Law School, SEC Chair Mary Jo White cautioned Silicon Valley’s start-up companies regarding their potential lack of internal controls.  In particular, she warned that unicorns—nonpublic start-up companies valued north of one billion dollars—may warrant special scrutiny into whether their corporate governance and investor disclosures are keeping pace with their growing valuations.  Ms. White repeatedly warned that the prestige of obtaining “unicorn” status may drive companies to inflate their valuations.

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Mark Cuban Challenges the Referee: the Constitutionality of SEC In-House Courts

After the repeated challenges to the SEC’s in-house courts as previously reported, Mark Cuban joined the debate by filing an amicus curiae brief in support of petitioners Raymond J. Lucia Companies, Inc. and Raymond J. Lucia (collectively “Lucia”) in Lucia v. SEC.  Cuban, describing himself as a “first-hand witness to and victim of SEC overreach” in a 2013 insider trading case brought against him in an SEC court, argued that the D.C. Circuit should grant the petitioners’ appeal because SEC in-house judges are unconstitutionally appointed.

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Overstock Digital Wars: A New Market Awakens

On the eve of the much anticipated release of Star Wars: The Force Awakens, the SEC approved Overstock Inc.’s plan to issue digital shares.  The online retailer plans to issue company stock via bitcoin blockchain–an enormous database running across a global network of independent computers that tracks the exchange of money.  Just as the original Star Wars movies released in the late 1970s and early 1980s signaled a monumental shift in special effects in film, Overstock’s plan to issue digital shares may herald a significant shift in the way securities are distributed and traded in the future.

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Investing in the Next “Big Thing” Just Got Easier – SEC Promulgates New Crowdfunding Rules

On October 30, 2015, the United States Securities and Exchange Commission (“SEC”) moved forward in implementing Title III of the JOBS Act and adopted new rules permitting companies to offer and sell securities to all potential investors through crowdfunding.  Crowdfunding is the use of small amounts of capital from a large number of investors to finance new business ventures.  This method of investment, typically conducted over the internet, is aimed at assisting smaller companies with capital formation by accessing a greater pool of potential investors.  The SEC had previously opened crowdfunding investment to “accredited investors” (investors meeting certain net worth and/or investment experience criteria) but these rules permit non-accredited investors, i.e., everyone else, to participate while providing them with additional protection under the federal securities laws.  Title III and these rules come in response to the enormous growth of equity crowdfunding through financing platforms such as GoFundMe, Kickstarter or Indiegogo.

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Judge Berman Deflates SEC’s ALJ Appointment Process

United States District Court Judge Richard M. Berman of the Southern District of New York has been making headlines in recent weeks as he presides over the highly publicized case between the National Football League (“NFL”) and National Football League Players Association (“NFLPA”) regarding the suspension of New England Patriots star quarterback Tom Brady over his alleged role in “Deflategate.”  Taking a page from the Patriot’s playbook, Judge Berman recently deflated the United States Securities and Exchange Commission (“SEC”) and its controversial administrative court forum.

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The SEC Criticizes One of Its Own

Even with the SEC’s home-court advantage in bringing enforcement actions in its administrative court rather than in federal court, the SEC will still criticize its own administrative law judges (“ALJ”) when an ALJ’s decision falls short of established legal standards.  On April 23, 2015, the SEC found that an ALJ’s decision to bar Gary L. McDuff from associating with a broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent or nationally recognized statistical rating organization was insufficient because it lacked enough evidence to establish a statutory requirement to support a sanctions analysis.  The SEC then remanded the matter to the same ALJ – no doubt in an effort to encourage him to revise his initial opinion.

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Additional Avenues May Be Available for Federal Regulators to Curtail Deceptive Practices in High Frequency Trading

We first heard about the SEC’s increased focus on high-frequency trading in June 2014 when the SEC announced its desire to promulgate new rules on high frequency trading to address the lack of transparency in dark pools and alternative exchanges and to curtail the use of aggressive, destabilizing trading strategies in vulnerable market conditions.  However, the SEC and other regulators may not need to rely on new rules to regulate high frequency trading.  The United States Commodity Futures Trading Commission special counsel Greg Scopino recently published an article in the Connecticut Law Review arguing that certain high frequency trading tactics violate federal laws against spoofing and wash trading.

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For Now, The Broad Interpretation of “Foreign Officials” Under the FCPA Is Here to Stay

In recent years, the DOJ and SEC have significantly increased their Foreign Corrupt Practices Act (FCPA) enforcement efforts, and in the process, have successfully advocated the theory that state-owned or state-controlled entities should qualify as instrumentalities of a foreign government under the FCPA. The FCPA defines a foreign official as “any officer or employee of a foreign government or any department, agency or instrumentality thereof.” In August 2014, the government’s broad definition of who constitutes a “foreign official” came into question for the first time when two individuals (Joel Esquenazi and Carlos Rodriguez) filed a petition for writ of certiorari with the Supreme Court to challenge their convictions under the FCPA and argued for the high court to limit the FCPA’s definition of the term. However, on October 6, 2014, the Supreme Court declined to consider the potential landmark case effectively upholding the government’s broad view of the term “foreign official.” Read More

Flash Rules: Is A Wall Street Reform on the Horizon or is the SEC Merely Reacting to the Latest Media Headline?

Michael Lewis’ new book Flash Boys: A Wall Street Revolt has caused a commotion on Wall Street, on Capitol Hill, and with law enforcement agencies. The SEC is the latest government agency to examine and propose new rules on alternative exchanges and high-frequency trading. The SEC’s latest proposals and enforcement actions raise questions about the agency’s plans to effectively regulate and enforce these activities and its ability to do so.

In Flash Boys, Michael Lewis—author of Liar’s Poker, Moneyball, The Blind Side, and The Big Short—follows a “small group of Wall Street investors” who he says “have figured out that the U.S. stock market has been rigged for the benefit of insiders and that, post-financial crisis, the markets have become not more free but less, and more controlled by the Big Wall Street banks.” High frequency trading is a type of trading using sophisticated technological tools and computer algorithms to rapidly trade securities in fractions of a second to profit from the slightest market blips. High frequency trading is done over traditional exchanges. In contrast, dark pools are alternative electronic trading systems conducted outside traditional exchanges that institutional investors use, sometimes to hide their trading intentions or to move the market with large orders.

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