William Alderman

Senior Counsel

San Francisco

Read full biography at www.orrick.com

Bill Alderman, a Senior Counsel in the San Francisco office, concentrates his practice on business litigation and dispute resolution. He has broad experience in matters involving federal and state securities, corporate governance, technology, trade secrets, business torts and international disputes.

Bill is additionally recognized for the results he has obtained in insurance coverage, employee benefits, and federal and state antitrust disputes. He commits a substantial part of his time to pro bono representation and to representation of the firm.

Representing clients in class and derivative actions, Bill's approach is to minimize his clients’ overall cost through careful strategic planning, dispositive motions and aggressive negotiation. Only three of the many securities class actions he has defended have resulted in any settlement payment by his client or its carrier. Of his nearly 100 motions to dismiss securities class, mass or derivative actions since 1996, more than 90 percent were granted in their entirety (most with prejudice), while others were granted in part or led to a successful motion for summary judgment.

Posts by: William Alderman

SEC Updates Revenue Recognition Guidance for Bill-and-Hold Arrangements

Danielle Van Wert and William AldermanPosted on August 24, 2017

Last Friday, the SEC issued two releases regarding guidance on revenue recognition, along with a related Staff Accounting Bulletin. These releases are notable for all SEC registrants, as they update prior revenue recognition guidance.

First, the SEC updated its guidance for criteria to be met in order to recognize revenue when delivery has not occurred, i.e., bill-and-hold arrangements. The SEC’s guidance now follows that of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenues from Contracts with Customers. Per ASC Topic 606, revenue may be recognized when or as the entity satisfies a performance obligation by transferring a promised good or service to a customer, and a good or service is transferred when the customer obtains control of that good or service. In the context of bill-and-hold arrangements, ASC Topic 606 provides specific guidance that certain indicators must be met to show that control has been transferred, including: (i) a substantive reason for such an arrangement where the customer has declined to exercise its right to take physical possession of that product; (ii) the product must be identified separately as belonging to the customer; (iii) the product currently must be ready for physical transfer to the customer; and (iv) the entity cannot have the ability to use the product or direct it to another customer. Until a registrant adopts ASC Topic 606, however, it should continue to follow the older guidance for revenue recognition. In conjunction with the SEC’s release, the SEC’s Office of the Chief Accountant and Division of Corporate Finance also released a bulletin that brings existing SEC staff guidance into conformity with ASC Topic 606.

The SEC also published new guidance with respect to accounting for sales of vaccines and bioterror countermeasures to the Federal Government for placement into the pediatric vaccine stockpile or the strategic national stockpile. In light of the updated ASC Topic 606 referenced above, the SEC states that vaccine manufacturers should now recognize revenue and provide disclosures when vaccines are placed into Federal Government stockpile programs because control of the enumerated vaccines (i.e., childhood disease, influenza and others) will have been transferred to the customer.

What to Watch for From the New SEC Chairman

Justin Giovannettone, Kevin Askew and William AldermanPosted on May 9, 2017

Last Thursday, Jay Clayton was officially sworn in as the new Chairman of the Securities and Exchange Commission. As the new Chairman takes office, here are a few things we’re keeping an eye on:

Will Chairman Clayton take a position on the recently introduced bipartisan bill that would increase civil monetary penalties in SEC enforcement actions? The “Stronger Enforcement of Civil Penalties Act of 2017” would significantly increase civil monetary penalties in enforcement actions to as much as $1 million per violation for individuals and $10 million per violation for entities, or three times the money gained in the violation or lost by the victims. The current maximum civil monetary penalties are $181,071 and $905,353 per violation for individuals and entities, respectively.

Will the new Chairman preserve the directive reportedly issued by former Acting Chairman Michael Piwowar to re-centralize authority to issue formal orders of investigation? In 2009, the SEC adopted a rule that delegated authority to issue formal orders initiating investigations to the Director of Enforcement, who then “sub-delegated” it to regional and associate directors and unit chiefs within the Enforcement Division. In February, Piwowar reportedly revoked the “sub-delegated” authority, ordering it re-centralized exclusively with the Director of Enforcement.

Will enforcement actions against public companies increase or decrease after hitting their highest level since 2009 last year? A recent report issued by the NYU Pollack Center for Law & Business and Cornerstone Research found that the 92 actions the SEC brought against public companies and their subsidiaries in 2016 is more than double the level of enforcement activity from just three years prior. READ MORE →

A Fraud By Any Other Name: Seventh Circuit Holds That SLUSA Extends to Class Actions That Could Be Pursued Under Federal Securities Fraud Laws

Christine Hanley and William AldermanPosted on February 1, 2017

A divided panel of the Seventh Circuit recently held that the Securities Litigation Uniform Standards Act (“SLUSA”) requires any covered class action that “could have been pursued under federal securities law” to be brought in federal court. The plaintiff maintained an investment account at LaSalle Bank, which was later acquired by Bank of America. Each night, LaSalle invested (“swept”) the account’s balance into a mutual fund approved by the plaintiff. Without the plaintiff’s knowledge, LaSalle also allegedly pocketed the fees that some of the mutual funds paid each time a balance was transferred. When the plaintiff found out, he brought a class action in state court, arguing that LaSalle had breached its contractual and fiduciary duties to its customers by secretly paying itself fees generated by their accounts.

LaSalle and Bank of America successfully argued before the district court that SLUSA required removal of the case to federal court. SLUSA authorizes defendants to demand removal of any class action with at least fifty members that alleges “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” Congress drafted SLUSA to force securities class actions out of state courts and into federal courts, where plaintiffs must clear higher pleading hurdles.

No Longer a Mirage: FCPA Compliance and Cooperation Has Its Benefits

M. Todd Scott and William AldermanPosted on September 28, 2016

On September 12, 2016, the SEC announced that it had reached a settlement with Jun Ping Zhang (“Ping”), a former executive of a Chinese subsidiary of Harris Corporation (“Harris”), regarding alleged violations of the Foreign Corrupt Practices Act (“FCPA”). The settlement was unusual, in that the SEC declined to also bring charges against Harris, an international communications and information technology company.

CDX Holdings, Inc. v. Fox: Chancery Court’s Decision Is Affirmed, But Dissent Blasts Use of “Hindsight Bias” Analysis

William Foley, M. Todd Scott and William AldermanPosted on June 14, 2016

On June 6, 2016, the Supreme Court of Delaware affirmed a decision of the Chancery Court finding that corporate directors and officers involved in a sales transaction breached a contract with option holders to fairly value their options (see here for a thorough explanation of the Chancery Court decision, and in particular, the Court’s criticism of the retained financial advisers that provided a valuation analysis). The Supreme Court decision also included a disproportionately lengthy dissent condemning both the Chancery Court’s findings and its reliance on “social science studies” to reach them.

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

William AldermanPosted on February 17, 2016

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.

Another Round of Favorable SEC Settlements, But Only for Underwriters that Self-Reported

William AldermanPosted on October 20, 2015

The SEC has rolled out its second wave of enforcement actions against 22 municipal underwriting firms for alleged securities violations in municipal bond offerings in connection with its Municipalities Continuing Disclosure Cooperation (MCDC) Initiative. As previously reported, the MCDC initiative was announced in March 2014 to address potential securities violations by municipal bond underwriters and issuers. Under this initiative, the SEC offered favorable settlement terms to those who self-reported by the end of 2014.

District Judge Takes Jab at SEC’s Home-Court Advantage in Administrative Proceedings, But Defense Bar May Not Have a Slam Dunk

William Alderman, Kevin Askew and Jennifer LeePosted on June 16, 2015

The defense bar recently won a significant victory in the battle to challenge the SEC’s expanded use of administrative proceedings, following the 2010 enactment of the Dodd-Frank Act, to seek penalties against unregulated individuals and entities. As we previously wrote in SEC’s Administrative Proceedings: Where One Stands Appears to Depend on Where One Sits and There’s No Place Like Home: The Constitutionality of the SEC’s In-House Courts, SEC administrative proceedings have recently faced growing scrutiny, including skepticism about whether the administrative law judges (ALJs) presiding over these cases are inherently biased in favor of the SEC’s Division of Enforcement. The Wall Street Journal recently reported that ALJs rule in favor of the SEC 90% of the time in administrative proceedings. Administrative proceedings have also been criticized for the ways in which they differ from federal court actions, including that respondents are generally barred from taking depositions, counterclaims are not permissible, there is no equivalent of Rule 12(b) motions to test the allegations’ sufficiency, and there is no right to a jury trial.

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

William AldermanPosted on February 18, 2015

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.

Keep Your Unreasonable Opinions to Yourselves: The Supreme Court Hears Argument in Omnicare

William AldermanPosted on November 11, 2014

On November 3, 2014, the U.S. Supreme Court held oral argument in Omnicare v. Laborers District Council Construction Industry Pension Fund. As discussed in earlier posts, from March 18, 2014 and July 22, 2014, the Supreme Court in Omnicare has been asked to resolve a circuit split regarding the scope of liability under Section 11 of the Securities Act: does an issuer violate Section 11 if it makes a statement of opinion that is objectively false, or must the issuer also have known that the statement was false when made?

Securities Litigation, Investigations and Enforcement