Mr. Meyers, a partner in the Washington, D.C., office, is a member of the Securities Litigation and Regulatory Enforcement group. Mr. Meyers’ practice focuses on the full range of SEC enforcement matters, including alleged accounting and financial fraud, broker-dealer issues, insider trading, and alleged false statements or omissions in SEC filings and elsewhere. Mr. Meyers has also successfully represented clients in private securities litigation.
Mr. Meyers is recognized by Chambers USA 2012 in Band 2 for securities litigation. According to Chambers, Mr. Meyers "consistently achieve(s) successful results for clients in the full range of SEC, PCAOB and FINRA enforcement investigation and litigation matters."
Successful results include:
For Financial Institutions and Related Individuals
- SEC v. Mozilo, et al. Representation of former President and Chief Operating Officer of Countrywide Financial Corporation, in SEC enforcement action alleging disclosure fraud by three of Countrywide’s senior executives. The case settled with client consenting, without admitting the allegations of the complaint, to certain injunctive relief, an out-of-pocket payment of $520,000, and an agreement not to serve as a director or officer of a public company for three years.
- Representation of a Wall Street investment firm in numerous SEC and NASD investigations regarding a variety of issues. No enforcement action was taken against our client in any of these matters; however, three other major investment firms were fined and censured in at least one of the matters.
- Representation of a trader at a hedge fund in SEC investigation into possible market timing; no enforcement action taken against our client, though the hedge fund and the broker-dealer through which it traded agreed to a settled enforcement action.
- Representation of a former compliance officer of a major investment bank in SEC investigation into possible market manipulation; no enforcement action taken against our client.
- Representation of a floor trader for a major investment firm in SEC and DOJ investigations into possible insider trading; no enforcement action taken against our client.
For Other Public Companies and Related Individuals
- Representation of entities in several SEC accounting fraud investigations; no enforcement action taken.
- Representation of public companies and other entities in internal investigations, including investigations resulting from whistleblower allegations, regarding possible accounting and other issues.
- Representation of two public companies in SEC insider trading investigations of alleged insider trading with respect to those companies’ stocks.
- Representation of the former CFO of an insurance company in connection with the SEC’s omnibus investigation of accounting for finite reinsurance. Client received a Wells notice indicating the Staff’s intent to pursue fraud and other charges but, following receipt of our Wells submission, the Staff terminated the investigation without taking any enforcement action against our client, though the company did enter into a consent agreement with the Commission.
- Representation of a company and one of its officers in a SEC investigation of alleged accounting fraud in the oil and gas industry. Though the SEC staff issued Wells notices to the firm’s clients, it ultimately terminated the investigation without enforcement action against the clients, even though another company and several other individuals entered into consent agreements with the Commission.
- Drafted a Wells submission on behalf of client, the CEO of a public company, in an insider trading investigation; ten days after the Wells submission was made, the staff decided to terminate the investigation without taking any enforcement action.
- Representation of the former CFO of a company in the health care industry in a SEC investigation into possible accounting fraud. The SEC staff terminated the investigation without enforcement action against the firm’s client.
- SEC v. Berry. Representation of the former General Counsel of KLA-Tencor Corp. and Juniper Networks, Inc. in SEC and private litigation alleging unlawful stock options backdating. Achieved partial Rule 12(b)(6) dismissal of the SEC’s original and first amended complaints as well as the private plaintiffs’ complaint. The private action settled, with client paying no money. The SEC action settled pursuant to a consent order that did not include an injunction against scienter-based fraud violations, the first instance to our knowledge in which the Commission did not require such relief against a General Counsel in litigated or settled actions alleging unlawful options backdating.
- SEC v. Mercury Interactive, LLC, et al. Representation of the former General Counsel of Mercury Interactive, LLC in a federal court SEC enforcement action alleging unlawful stock options backdating. Achieved full dismissal (without prejudice) of the SEC’s first amended complaint and partial dismissal of the SEC’s original and second amended complaints. The case settled pursuant to a consent order that did not include an injunction against scienter-based fraud violations; this case and Berry are, to our knowledge, the only ones in which the Commission did not require such relief against a General Counsel in alleged options backdating cases.
- SEC v. Espuelas, et al. Representation of the former Senior Vice President, Global Sales, of StarMedia Network, Inc. in a federal court SEC enforcement action alleging improper revenue recognition. The court dismissed the fraud and most of the other claims of the SEC’s original complaint as to the firm's client, and it dismissed the allegations of the first amended complaint as to the client based on one of the two sets of transactions. The case settled pursuant to a consent order that required no civil penalty, no disgorgement, and no officer-and-director bar.
For Auditing Firms and Related Individuals
- In re Doral Financial Corp. Sec. Litig., 563 F. Supp. 2d 461 (S.D.N.Y. 2008), aff’d, 2009 WL 2779119 (2d Cir. Sept. 3, 2009): obtained Rule 12(b)(6) dismissal with prejudice on the first motion to dismiss on behalf of PricewaterhouseCoopers LLP in a case alleging accounting fraud by a mortgage lender, and summary affirmance by Second Circuit.
- In re Acterna Corp. Securities Litigation, 378 F. Supp. 2d 561 (D. Md. 2005): on behalf of PricewaterhouseCoopers LLP, obtained Rule 12(b)(6) dismissal with prejudice of federal securities law and state common law claims alleging accounting fraud (alleged overstatement of company’s goodwill as a result of two acquisitions).
- In re Lawrence A. Stoler, CPA, Admin. Proc. File No. 3-12179 (July 31, 2006): representation of former engagement partner in SEC Rule 102(e) administrative proceeding with respect to audits of a defunct hedge fund; helped to negotiate consent order pursuant to which client agreed to cease and desist order and one year suspension from practice before the Commission, with right to reapply.
- Representation of a partner at a Big 4 accounting firm in a PCAOB investigation in connection with client’s receipt of the PCAOB equivalent of a Wells notice. Following receipt of our Wells submission, the Division of Enforcement and Investigations declined to recommend any enforcement action as to our client.
- Representation of individual auditor at a Big 4 accounting firm in the first-ever litigated PCAOB administrative proceeding. Matter is confidential.
Prior to joining the firm, Mr. Meyers served as Assistant Chief Litigation Counsel in the Securities and Exchange Commission’s Division of Enforcement. During his tenure, he received the Chairman's Award for Excellence and the Capital Markets Award. While at the SEC, Mr. Meyers handled the following matters that involved significant litigation or other work in the district court, and was also involved in other prominent matters that were brought as settled actions.
- The Global Research Analyst Settlement. Mr. Meyers was the SEC’s lead trial counsel in these path-breaking actions against 12 Wall Street investment banking firms and two individuals alleging conflicts of interest among research analysts, publication of fraudulent and/or misleading research and similar conduct at such firms. These actions resulted in a settlement exceeding $1.4 billion. Mr. Meyers’ primary responsibilities in this matter included negotiating certain settlement terms and the language of the complaints, drafting the final judgments and representing the Commission before the Court in obtaining approval of the proposed final judgments and responding to investors’ motion to intervene.
- SEC v. Breed. Mr. Meyers obtained a final judgment, including full disgorgement, injunctive relief and a three-time civil penalty, against a defendant for insider trading, and final judgments against three of his family members as relief defendants. He also obtained discovery sanctions, including attorneys’ fees and costs, jointly and severally against relief defendants and their counsel.
- SEC v. System Software Associates, Inc. Mr. Meyers obtained final judgments, including injunctions, disgorgement and a third tier civil penalty, in a financial fraud case alleging improper recognition of software license revenues. He also obtained a reported decision (145 F. Supp. 2d 954 (N.D. Ill. 2001)) denying defendants’ motion to dismiss.
- SEC v. Leach. In this case alleging fraud regarding mini-tender offers, Mr. Meyers obtained final judgments containing full injunctive relief, full disgorgement and third tier civil penalties against two individuals and a company wholly owned by one of the individuals.
- SEC v. Schiffer. Mr. Meyers obtained summary judgment for approximately $15 million in disgorgement (plus prejudgment interest) in this case involving material false and misleading statements, insider trading, market manipulation and sale of unregistered securities.
- SEC v. Midpoint Trading Corp. In this insider trading case, Mr. Meyers obtained a temporary restraining order and a preliminary injunction freezing assets and according other relief against foreign defendants.
Mr. Meyers has written numerous articles and has spoken frequently on a variety of topics involving SEC enforcement, antitrust and trade regulation.
Orrick partner Jim Meyers provides his perspective to JD Supra in the May 14, 2013 article, “A Look Ahead at SEC Enforcement Actions – with Orrick’s Jim Meyers.” Jim comments on trends in Securities and Exchange Commission enforcement, the new arrivals of SEC chairwoman, Mary Jo White and Enforcement Unit co-head, Andrew Ceresney, the recent “Non-Prosecution Agreement” with Ralph Lauren, and more.
To read the full JD Supra article, please click here.
On April 24, 2013, the Public Company Accounting Oversight Board issued its inaugural “Policy Statement Regarding Credit for Extraordinary Cooperation in Connection with Board Investigations.” The Policy Statement reiterates many of the themes of the SEC’s “Seaboard Report,” and therefore many may view it as largely plowing over well-trodden ground. But, the Policy Statement merits close attention, because it is the first such statement the Board has issued since it was formed, it sets forth specific examples of conduct that is likely to earn credit for cooperation, and it focuses specifically on the auditing profession.
The Policy Statement identifies three forms of “extraordinary” cooperation that could result in audit firms and/or individuals receiving credit in enforcement investigations:
- remedial or corrective action; and
- substantial assistance.
According to the Board, “[a] firm or associated person may earn credit for self-reporting by making voluntary, timely and full disclosure of the facts relating to violations before the conduct comes to the attention of the Board or another regulator.” And, the sooner self-reporting is made, the more likely it will result in credit. The Board stressed, however, that self-reporting is “not eligible for cooperation credit” if it is “required by legal or regulatory obligations,” e.g., the auditor’s obligation under Section 10A of the Securities Exchange Act of 1934 to report a client’s illegal acts. Read More
Today, the Solicitor General filed a motion asking the Supreme Court to dismiss the Securities and Exchange Commission’s petition for a writ of certiorari in SEC v. Bartek. As noted in a previous blog post, the Bartek petition focused on when the limitations period under 28 U.S.C. § 2462 begins to accrues, a question that was answered in Gabelli.
However, the petition also presented a second question: whether director and officer bars and injunctive relief constituted penalties. Although the Supreme Court was unlikely to take up that question at this juncture, the government’s decision to dismiss the petition perhaps signals a view that Gabelli will not have a significant adverse impact on the SEC’s civil enforcement activities. Certainly, Gabelli’s impact can be minimized if, as expected, Mary Jo White is confirmed as the next SEC Chair and follows through on her commitment to the Senate Banking Committee to “aggressive” pursuit of wrongdoers.
Securities class action lawyers are looking to the U.S. Supreme Court this term to clear up an issue that has been at the center of several prominent securities class actions, specifically, what is the standard for class certification where the class members’ reliance on defendants’ alleged misstatements is presumed under the fraud-on-the-market theory of reliance. Last term, in a class action ruling in an employment case, Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 1541 (2011), the Court signaled that class certification may require “a preliminary inquiry into the merits of a suit,” singling out elements of the fraud-on-the-market theory as an example.
On November 5, the Supreme Court heard argument in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, a securities fraud putative shareholder class action presenting the question of how far a court should consider a merits issue when deciding whether to certify a class. The appeal in Amgen is from a Ninth Circuit decision that affirmed the district court’s order certifying a plaintiff class of purchasers of Amgen stock. Defendants opposed class certification on the ground that the rebuttable presumption of reliance under the fraud-on-the-market theory requires not only that the market for Amgen stock was efficient, but that the alleged misstatements were material. Defendants offered evidence that the alleged misstatements in the case were immaterial. Therefore, according to defendants, reliance could not be presumed, and the proposed plaintiff class could not be certified because common issues did not predominate. The Supreme Court took the case in order to determine whether the district court was correct to disregard defendants’ evidence of immateriality on the ground that materiality is an issue appropriately considered at trial or at summary judgment rather than at the class certification stage. Read More
A federal court jury in Manhattan returned verdicts on Monday, November 12, largely exonerating the two most senior Reserve Management Company executives in a Securities and Exchange Commission enforcement action accusing them of fraud.
The SEC alleged that Bruce R. Bent, the company’s CEO, and his son, Bruce R. Bent II, the company’s president, as well as their investment advisory firm Reserve Management Co. and Resrv Partners Inc., had defrauded investors and the fund’s trustees by falsely claiming they would support the fund financially when it faced a run by investors after Lehman Brothers’ bankruptcy (the fund held about $785 million in Lehman debt on the day it filed for bankruptcy). The bankruptcy announcement caused investors to flee the fund, leading the fund to “break the buck,” i.e., to have a net asset value (“NAV”) of less than $1 per share. The SEC alleged that, on the morning after Lehman announced its bankruptcy, the Bents falsely assured investors and the trustees that they would use money from their firm to support the $1 NAV.
Following a trial lasting approximately a month, the jury found the elder Bent not liable on all counts and the younger Bent not liable on six of seven counts. The only count on which Bent II was found liable was a negligence-based claim, not the more serious claims that he had “knowingly and recklessly” defrauded investors and the trustees. The jury found the Bents’ two entities liable for the more serious scienter-based fraud charges. The case will now proceed for United States District Judge Paul Gardephe to determine what relief and sanctions, if any, are warranted against the entities and against Bent II for the one negligence-based count on which the jury found him liable. Read More
Today, the Supreme Court granted a petition for certiorari in Gabelli v. Securities and Exchange Commission (11-1274). In the appeal from a Second Circuit opinion, the Court will decide whether a governmental claim for penalties accrues on the date that the underlying violation occurs, or when the SEC discovers (or reasonably could have discovered) the violation, for purposes of the 5-year statute of limitations for governmental penalty actions embodied in 28 U.S.C. s. 2462. The precise question presented is:
“When Congress has not enacted a separate controlling provision, does the government’s claim first accrue for purposes of applying the five-year limitations period under 28 U.S.C. s. 2462 when the government can first bring the action for a penalty?”
The Second Circuit, in an opinion adopting the SEC’s position, held that the discovery rule applies to SEC enforcement actions rooted in fraud. Under that rubric, the SEC could bring an enforcement action within five years of learning about a fraud, which, in many cases, can be far more than five years after the underlying violation occurred. The Supreme Court’s decision to take the case follows closely on the heels of the Fifth Circuit’s August 7, 2012 decision in SEC v. Bartek, previously discussed here. In Bartek, the Fifth Circuit held that the statute of limitations for penalties in SEC enforcement actions began to run on the date of the underlying in violation, and that the discovery rule does not apply to 28 U.S.C. s. 2462. The Bartek decision therefore created a clear Circuit split that the Supreme Court is poised to resolve next term.
On September 6, the Second Circuit expanded class standing in a mortgage-backed securities class action suit for alleged misrepresentations in a shelf registration statement. NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., No. 11-2763 (2d Cir. Sept. 6, 2012). The plaintiff, an investment fund, sued Goldman Sachs & Co. (“Goldman”) and GS Mortgage Securities Corp. (“GS”) alleging violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 on behalf of a putative class of persons who acquired mortgage-backed certificates underwritten by Goldman and issued by GS. The plaintiff alleged that a single shelf registration statement connected with 17 separate offerings sold by 17 separate trusts contained false and misleading statements concerning underwriting guidelines, property appraisals, and risks and that these alleged misstatements were repeated in prospectus supplements.
The lower court had granted the defendants’ motion to dismiss, holding that the plaintiff—who had purchased securities from only two of the seventeen trusts—lacked standing to bring claims on behalf of purchasers of securities of the other fifteen trusts.
The Second Circuit disagreed that the plaintiff lacked class standing. Although the plaintiff had individual standing only as to the securities it purchased from the two trusts, the court held that the analysis for class standing is different. According to the court, to assert class standing, a plaintiff has to allege (1) that he personally suffered an injury due to the defendant’s illegal conduct and (2) that the defendant’s conduct implicates the “same set of concerns” as the conduct that caused injury to other members of the putative class. Read More
On May 4, 2012, the Southern District of New York denied in part, and granted in part UBS’s motion to dismiss the Federal Housing Finance Agency’s (“FHFA”) federal securities and state law misrepresentation claims stemming from pre-2008 securitizations. This opinion is noteworthy because of its analysis regarding the Housing and Economic Recovery Act of 2008’s impact on the relevant statute of limitations.
In July 2011, FHFA, as Fannie Mae’s (“Fannie”) and Freddie Mac’s (“Freddie) federal conservator, sued UBS regarding $6.4 billion in residential mortgage-backed securities purchased by the two government sponsored entities between September of 2005 and August 2007. FHFA alleged that UBS violated, inter alia, Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (“33 Act”) by preparing and distributing offering documents which contained material misrepresentations regarding the securities underlying mortgage loans. Read More