Help Wanted: attorneys with Securities and Exchange Commission experience to help steer companies through maze of new regulations.
National and local law firms are going after lawyers with regulatory experience to help advise clients who might find themselves under the government’s microscope.
Many firms expect the SEC’s enforcement efforts to increase under the Obama administration, especially in the wake of what many called the failure of the SEC to avert massive fraud scandals.
“We see a more investigatory government in the next few years and more of our clients are asking us to help them through the process,” said Mike Flynn, chairman of the executive committee at Newport Beach-based Stradling Yocca Carlson & Rauth.
Law firms anticipate stricter penalties from government agencies, as well as new guidelines for businesses.
“There are literally hundreds of pages of proposed rules coming out to regulate security exchanges and other rules coming out of Congress and the SEC,” said Jeff Reeves, co-partner in charge of the Irvine office of Los Angeles-based Gibson, Dunn & Crutcher LLP.
Companies now are looking to their lawyers to help them avoid penalties via non-prosecution agreements—where a company pays a fine instead of admitting an illegal act—industrywide enforcement programs, programs tailored to specific companies and other efforts.
For many firms, having a former SEC lawyer on staff provides insight into how regulators think.
“Knowing how to react when the SEC makes a phone call or comes calling will become an invaluable asset for firms advising clients during these enforcement and government investigations,” Reeves said.
Many see the SEC continuing to look at issues related to the Foreign Corrupt Practices Act—which deals with accounting transparency and bribery of foreign officials—hedge funds, insider trading and allegations of financial fraud.
“With everything happening in the marketplace with Ponzi schemes, there is a spike in interest over security enforcement actions,” Reeves said. “Even if a company isn’t in breach of any guidelines and rules, they are trying to step more carefully.”
Between the Lines
Former SEC lawyers also help companies read between the lines of any given issue.
“What a former SEC lawyer brings to the table is an understanding of what is not written down,” Reeves said. “Former staff members know the law as much as the lore that accompanies the written law.”
There aren’t many of these lawyers to go around, sources said.
“There are maybe a handful of former senior officials at the SEC that leave every year,” Reeves said. “It’s not like they are leaving in large numbers.”
The interest in government lawyers, according to some, isn’t new. But the need for them is more pressing this year.
“We were interested in these folks before and we’ll be interested in them next year,” said Bill O’Hare, managing partner of the Costa Mesa office of Phoenix-based Snell & Wilmer LLP.
Several local law firms have recently added former SEC and government lawyers.
Los Angeles’ Gibson Dunn counts more than 20 former SEC senior officials in its ranks.
Most recently, the firm recruited George Curtis as a partner, who was the deputy director of the division of enforcement at the SEC. He will work from the firm’s Denver and Washington, D.C., offices.
“The firm has actively beefed up in the area of white collar and SEC work over the past few years,” Reeves said.
The Irvine office of Miami-based Greenberg Traurig LLP recently added Michael Piazza, a former regional trial counsel for the Los Angeles office of the SEC.
Piazza moved to Greenberg Traurig last July from Minneapolis-based Dorsey & Whitney LLP’s Irvine office, where he worked in its trial, regulatory and technology practices.
Greenberg Traurig also added former U.S. Attorney Wayne Gross.
“I can’t think of any firm in Orange County who has both an SEC lawyer and a U.S. Attorney under one roof,” Piazza said.
Former SEC Chairman Chris Cox joined the Costa Mesa office of Boston-based Bingham McCutchen LLP last year.
And Stradling Yocca hired Kathleen Marcus, former senior counsel with the SEC’s enforcement division in Washington, D.C., to its litigation department in Newport Beach in August.
Marcus has taught classes in SEC enforcement at Notre Dame Law School.
With more demand for SEC executives than law school graduates, some students are starting to look at the government job as a good stepping stone for their careers.
“The government is actually one of the few firms in the nation still hiring,” Snell & Wilmer’s O’Hare said. “For many years lawyers coming out of government agencies would be recruited by firms as part of the natural evolution in many people’s careers.”
