James E. Thompson, a senior associate in the San Francisco office, is a member of the Securities Litigation, Investigations and Enforcement Group. His practice focuses on defending companies and individuals in securities class actions, shareholder derivative suits, and SEC investigations and enforcement actions.

James has extensive experience litigating securities class actions, derivative suits (including M&A related litigation), and other complex commercial disputes in both state and federal courts across the country. He also has represented companies and board committees in numerous internal investigations and regularly advises companies on corporate governance, fiduciary duty and disclosure issues.

James's clients include NVIDIA Corporation, Oracle Corporation, Fisker Automotive, VantagePoint Venture Partners, Aruba Networks, and David Sambol.

James has also dedicated significant time to pro bono representations. Recently, he successfully tried a case before Judge Alsup in the Northern District of California on behalf of an inmate, demonstrating that the inmate had not received adequate due process.

James is a regular contributor to Orrick, Herrington & Sutcliffe’s Weekly Auditor Liability Bulletin, Securities Litigation & Regulatory Enforcement Blog and the Securities Reform Act Litigation Reporter.

James's significant recent engagements include the following:

  • In re NVIDIA Securities Litigation. Obtained dismissal with prejudice of securities fraud class action brought against NVIDIA and certain of its officers.
  • Countrywide Mortgage-Backed Securities Litigation. Representing former President and COO of Countrywide Financial Corp. in connection with state and federal litigation in numerous jurisdictions.
  • In re Intermix Securities Litigation. Obtained dismissal of federal and state actions stemming from NewsCorp.’s acquisition of Myspace on behalf of VantagePoint Venture Partners.
  • Oracle/Retek Merger Litigation. Obtained summary judgment on behalf of Retek Inc. in shareholder merger litigation arising from its acquisition by Oracle.
  • Represented Board of Directors of health care company in investigation of potential insider trading issues.
  • Represented Audit Committee of a technology company in investigation of revenue recognition issues in China.

Posts by: James Thompson

Keep Looking Forward: Federal Court Holds Company’s Bad Legal Predictions Protected by PSLRA’s Safe Harbor

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In a comprehensive tour of the Private Securities Litigation Reform Act’s (“PSLRA”) safe-harbor provisions, on November 22, 2016, a federal court in Massachusetts dismissed a shareholder class-action lawsuit against Neovasc, Inc.  In holding that Neovasc’s ultimately faulty predictions concerning the outcome of a trade secrets lawsuit fell within the PSLRA’s safe harbor, the court rejected the plaintiff’s attempts to import a scienter requirement into the safe-harbor inquiry, among other things, and dismissed the complaint without leave to amend.

This putative class-action came on the heels of a $70 million jury verdict against Neovasc in May 2016. In that case, a jury found that Neovasc misappropriated certain trade secrets from CardiAQ Valve Technologies after CardiAQ had severed its manufacturing relationship with Neovasc, and Neovasc had patented a competing product.  Neovasc’s stock price fell approximately 75 percent when the jury verdict was announced.  Shortly after the verdict and stock decline, shareholders filed the class action, alleging securities fraud under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  The plaintiff alleged, among other things, that prior to the verdict, Neovasc CEO Alexei Marko mischaracterized the lawsuit as “baseless,” and that Neovasc had misstated that the suit was “without merit” in the company’s SEC filings.

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It’s Hunting Season. For Unicorns? Lawsuit Against Theranos Signals Trend In Investors Going After Late-Stage Start-ups

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Last week brought more bad news for private blood testing company Theranos Inc., as San Francisco-based Partner Fund Management L.P. (“PFM”) launched a suit claiming that it was duped into making a $96.1 million investment in Theranos in February 2014.  The complaint, filed in Delaware Court of Chancery, alleges common law fraud, securities fraud under California’s Corporations Code, and violations of Delaware’s Consumer Fraud Act and Deceptive Trade Practices Act, among other things, against Theranos, its Chief Executive Officer, Elizabeth Holmes, and its former Chief Operating Officer, Ramesh Balwani.

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SEC Continues to Target Private Equity Firms, Entering Into $52 Million Settlement with Apollo Global Management

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On August 23, 2016, the SEC entered into a settlement that reflects a continuation of its recent trend of increasingly active pursuit of private equity firms, particularly for failing to disclose conflicts of interests and other material information to investors.  The SEC entered into a $52.5 million settlement with four private equity fund advisers affiliated with Apollo Global Management LLC (collectively “Apollo”) arising out of insufficient disclosures and supervisory failures.

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Shareholder Derivative Suit Following Data Breach Misses Target

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On July 7, 2016, Judge Paul A. Magnuson of the United States District Court for the District of Minnesota granted Defendants’ Motions to Dismiss a shareholder class action that had been initiated following a 2013 holiday season data breach involving customers of Target Corporation (“Target,” or “the Company”).  The data breach, which resulted in the release of information of approximately 70 million consumer credit and debit cards, made headlines as one of the biggest privacy hacks at the time.  Initially disclosed to the public in December 2013, with an estimated 40 million credit and debit cards affected, Target subsequently revealed a little less than a month later that additional consumer data, including customers’ names, mailing addresses, phone numbers and email addresses, were also stolen, and increased its initial estimate to 110 million.

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Pro-Golfer Phil Mickelson Pays $1M to SEC to Settle Civil Insider Trading Claims, But Escapes Criminal Charges in Light of Newman

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On Thursday, May 19, 2016, the U.S. Attorney’s Office for the Southern District of New York announced the arrest of renowned sports bettor William “Billy” T. Walters on an alleged years-long insider trading scheme conducted with his friend and business partner, Thomas C. Davis.  According to the indictment, from 2008 to 2014, Mr. Walters executed a series of profitable stock trades in Dean Foods and Darden Restaurants based on inside information repeatedly and systematically provided to him by Mr. Davis.  The U.S. Attorney’s Office alleges that these trades netted Mr. Walters over $40 million and charged him with conspiracy, securities fraud, and wire fraud.

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

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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

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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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Exchanges Prevail in Flash Boys-Inspired Suits

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The practice of high frequency trading has been a hot-button issue of late, thanks in part to Michael Lewis’ 2014 book Flash Boys: A Wall Street Revolt, which examines the rise of this phenomenon throughout U.S. markets.  Several class action lawsuits have alleged that various private and public stock and derivatives exchanges entered into agreements and received undisclosed fees to favor high frequency traders (“HFTs”), conferring timing advantages that damaged other market participants.  Two courts have recently addressed the merits of claims for damages against such exchanges and both ruled that plaintiffs failed to state a claim for relief.

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

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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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D.C. Circuit Court “Tunes In” To SEC Administrative Court Debate

Chairs Around a Table

On September 29, 2015, the D.C. Circuit, the second federal appellate court to recently weigh in on the ongoing debate over SEC administrative actions, ruled in favor of the SEC in Jarkesy v. SEC, holding that federal courts do not have subject matter jurisdiction over challenges to ongoing SEC administrative enforcement proceedings.  Notably, and in accord with the Seventh Circuit’s recent decision in Bebo v. SEC, the D.C. Circuit’s decision was narrowly tailored – focusing only on the issue of subject-matter jurisdiction – but not the substantive viability of Jarkesy’s constitutional challenges.  The three-judge panel unanimously held that a party to a pending administrative proceeding must first defend against that proceeding, and only once the SEC proceeding concludes may the party seek review by a federal court.

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